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Nuclear: Set Back by Disaster, but Still Set for Revival

nuclear plantsBecause of events in Japan, the nuclear renaissance has suffered setbacks on implementation of some projects, but the movement as a whole is alive and poised for growth in many areas, according to Daniel Magnarelli, manager of Construction & Commissioning, Areva Inc. Areva builds a fourth of the world’s reactors and Magnarelli says the company has not stopped construction, which is a good sign for those industries that supply to nuclear.

While not much is happening currently in the U.S., “nuclear is a global industry and there is a revival underway,” he said.

Worldwide, there are 60 plants under construction; however, about 50 of them are in China, India, Russia and South Korea, he said. In general “the plants under construction are still under construction”—not defaulting, he said. But plans have changed worldwide.

In Finland, for example, Areva is continuing construction of a huge 16,000 megawatt pressurized water reactor plant; however, a second plant that had already been approved at the same site is being reconsidered by the Finnish government.

In the UK, Russia, Sweden, Poland and Spain, the countries are taking a stay-the-course position—looking at lessons learned from the Japanese crisis while trying not to surf the wave of emotion.

In other parts of Europe, however, “you get the real knee-jerk reaction,” Magnarelli said. For example, Italy, which had signed up for four new units, has completely suspended new build ambitions. And in Germany and Switzerland, the countries have announced phase-out of their nuclear programs. Meanwhile, Austria announced it is creating “stress tests” to weigh the healthy of each nuclear reactor, in a manner similar to the banking industry testing conducted after European and American banking crises. South Africa had significant plans for a nuclear build, but is now rethinking its plans because Japan’s crisis raised concerns about radioactivity.

Still, in Asia, plans “are full steam ahead,” Magnarelli said. That part of the world is factoring in lessons learned from the crisis, but “has not seen a slowdown in construction or development,” he said.

Both India and China’s government and customers have confirmed their willingness to continue with nuclear new-builds. In Taiwan, the government has launched an investigation, and in Korea, a safety review is underway, but, as Korea’s administration pointed out, what is built today is “100 times safer than what was built in Japan 20 years before,” Magnarelli said.

Meanwhile, on this side of the ocean, Canada has said it does not want a slowdown in nuclear, and in the U.S., the president has given cautious support to the industry. Both countries are greatly affected by the fact they seek less dependence on foreign oil as a fuel source, Magnarelli said.

nuclear set back by disaster but still set for revivalWhat has happened here, however, is that the timeline “has shifted to the right,” he said, in some cases from the 2014 to 2020 timeframe to as far out as 2040. “That gives you [suppliers] more time to plan, but it’s not something you wanted to see,” Magnarelli added. Compounding the situation here is that gas prices remain under $8. To be competitive with nuclear, they must be in the $8 to $9 range, he said.

Also, while the Japanese crisis has scaled back efforts and created uncertainty in general, “what we are seeing is a number of utilities are consolidating. That’s good for nuclear because the decisions in the U.S. [in the power industry] are largely utility decisions, not government decisions,” he said. The merged utility companies are stronger, have improved financial performance, synergy in savings and increased access to capital for potential large future projects, which means that when nuclear gets back on track, they will be ready to make it a major part of their power programs and will have the capital for new building.

Magnarelli said suppliers that want to deal in the new nuclear build market need to remember that:

  • Safety is the number one priority both in terms of operations and public and health safety.
  • Skills and experience in the nuclear field are a top priority to those who deal with the supplier base to the industry.
  • Also being sought are key partnerships for preferred suppliers. Areva, for example, has set up these preferred partnerships even in fields like forging, which has a long lead time, because they don’t want to get caught in a situation where they are seeking a product/service but are caught in the back of the queue.
  • Each project is unique and requires a tailored approach to meet prior cost, financing, delivery, strategic and operational concerns.

To deal with his company, for example, Magnarelli suggested getting on the approved supplier list; registering to become a certified supplier; joining the Clean Energy Supplier Network, the Nuclear Energy Institution and the Nuclear Fabrication Consortium; attending one of the supplier day events and checking the company out online at:

Genilee Parente is managing editor of Valve Magazine. Reach her at This email address is being protected from spambots. You need JavaScript enabled to view it.. This article is based on remarks made by Magnarelli at the VMA Market Outlook Workshop, held Aug. 11-12, 2011.

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