Nuclear power and its background economics

By Desmond Wen Yida

In the roundtable discussion, a spirited debate has been spirited upon which generation ⅵ reactor is the best one. From this discussion, I have not only expanded my knowledge but broaden my horizon. And I can also realize an energy revolution is being happened in near future.

However, when we check out the background economics of nuclear power, we may find sometimes it is not rational to construct nuclear power plants extensively and overdepend on nuclear energy.

In order to meet increasing demands of energy and estimate side effects to the environments, recently many countries accelerate the pace of developing nuclear energy. From the green energy infrastructure report from World Economic Forum 2009, the 2008 global net investment of clean energy has peaked 155 billion U.S. dollars, while in 2004 this figure was only 30 billion U.S. dollars, which means that from 2005 to the end of 2008, the global clean energy investment within four years turned five times.

So the future would be predicted. The nuclear power would be developed and invested dramatically. However, same as all non-renewable energy sources, the prerequisite for the development of nuclear power - uranium mining, is scarce and unevenly distributed, which means that, if there is a global short supply of uranium, the prices would rise up sufficiently just like the soaring of oil price in 2008.

The uranium sources are highly concentrated. The world's major uranium producing countries are Canada, Australia and Kazakhstan, which accounts for 23.0%, 20.9% and 16.1%, together accounted for 60.0% of the world uranium output. However, the production of uranium fuel for nuclear reactors can only meet the world's demand by 60%. In 2007 the uranium produced was 41,279 tons, growing 4.7% compared with 2006. And by 2007, there are only 18 countries mining the uranium resources in total.

Uranium prices have already staged a new peak. From the end of 2006, the global uranium price was going up sustainably, from December 2006 72.00 U.S. dollars / lb to June 2007 138 U.S. dollars / lb. a monthly average increase even reached 10 U.S. dollars / lb and over.

So the hunting for the nuclear fuel will become a tough job for most countries. At present, a million-kilowatt-class nuclear power generating units required every year 27 tons of uranium fuel, which means 160 tons of natural uranium ore. As for China, annual uranium production of uranium is about 700 million tons, which means about 50% of fuel need to be imported. By 2020, with the completion of new mega nuclear plants, this figure will become 90%. So once the imports disrupted, the nuclear security would be challenged and even the national economy would be dampened in a devastating way.

The cost of nuclear waste treatments is also likely to affect the competitiveness of nuclear power. Since the treatment of nuclear waste require advanced technologies, a lot of money need to be consumed to ensure the environmental safety. And it is also a universal formidable problem of how to prevent the nuclear leak from violent earthquake or some exogenic actions.

To summarize, the nuclear energy may not have distinct advantage of price. The constructions of nuclear plants are advised to be carefully considered and calculated instead of following the trend of new energy blindly by governments. And it is also wisely for the governments to invest in more Uranium when it is at low prices and make a shortage in case of being controlled by others. On the other hand, the technical improvements of nuclear waste treatments and thermal efficiency may also cost a multitude of capital, which requires governments to tradeoff carefully and act according to the nation’s capability.