Nuclear renaissance melts down over Japan disaster

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After more than two decades of stagnation, the global nuclear power industry was just coming back to life. Power utilities had launched proposals for more than 300 new reactors, most of them in Asia, and dozens were under construction.

Then came the Japanese nuclear disaster, shocking the world with images of two explosions at the Fukushima Daiichi nuclear plant in northeast Japan, near the epicentre of Friday's earthquake. The disaster threatens to end the nuclear renaissance. A slowdown has already begun.

On Monday, two days after thousands of nuclear protesters gathered in Stuttgart, German Chancellor Angela Merkel announced a suspension of her coalition government's decision to extend the lifespan of her country's aging nuclear power stations. Investors hammered the shares of utilities with nuclear-energy exposure, among them French nuclear development giant Areva, and energy consultants and analysts predicted hard times ahead for the industry.

"The severe nuclear incident in Japan has put a global nuclear renaissance into question," Bernstein International analyst Alex Barnett said in a research note.

"This should slow the development of nuclear power," said Ira Helfand, a member of the board of Physicians for Social Responsibility in the United States. "These reactors are inherently dangerous. They contain the equivalent of 1,000 nuclear bombs."

The Japanese disaster "will put new nuclear development on ice," said Toronto energy consultant Tom Adams, the former executive director of Energy Probe. He said the nuclear industry was already facing challenges, noting that vast shale gas resources in North America and other parts of the world were starting to make cheaper gas-fired plants the electricity generators of choice.

The 8.9 magnitude Japanese earthquake was many thousands of times more powerful than the one that hit Christchurch, New Zealand, last month. It severely damaged the Fukushima reactor complex, operated by Tokyo Electric Power Co. (Tepco). The site's three operating reactors shut down as planned when their motion detectors sensed the shock, but the cooling systems designed to remove heat from the core failed.

In Austria, Environment Minister Nikolaus Berlakovich urged "stress tests" on the European Union's power plants. In Germany, Ms. Merkel announced a three-month suspension of plans to extend the lives of her country's 17 nuclear reactors while her government fast-tracks a review of nuclear safety and policy. France, the biggest user of nuclear power, urged calm along with Britain, arguing that nuclear safety standards have increased and that most of Europe is not geologically prone to earthquakes.

Decades after the Three Mile Island accident and the Chernobyl disaster, memories of the incidents had faded and nuclear power was making a comeback. The revival was driven by soaring fossil-fuel prices and the scientific acceptance that carbon dioxide output, a notable byproduct of coal-fired plants, was accelerating the pace of global warming. Countries that had slowed or ended nuclear development, including Sweden and Finland, reversed course. In the United States, 16 new plants are in the proposal stage, according to the World Nuclear Association, though only two are under construction.

The nuclear revival seemed assured, as billions of dollars of investments in design, engineering and construction were committed. In an interview in Moscow in February, Russian billionaire industrialist Oleg Deripaska said he saw a bright future for nuclear development "because only nuclear could provide a real solution" to global warming.

But nuclear energy and emerging alternative sources of energy carry high costs, critics point out.

"Neither new nuclear, coal with carbon capture and sequestration, wind nor solar are economic," said John Rowe, CEO of Exelon, in a speech on March 8 in Washington. One of the biggest U.S. power companies, with 17 nuclear plants and a broad portfolio of hydro, wind and solar facilities, Exelon says gas plants are the future.

"Natural gas is queen. It is domestically abundant and is the bridge to the future," Mr. Rowe said. He noted that new conventional and shale gas discoveries have increased U.S. gas supplies by about 60 per cent, making the United States the world's third largest gas producer, after the Middle East and Russia.

Shale gas could alter the European energy mix, too. Shale gas has been found in Poland, Germany, Ukraine and a few other countries. Exxon Mobil, ConocoPhillips and Chevron are working on shale exploration projects in southeast Poland.