North America’s nuclear industry received more bad news last week when Duke Energy scuttled a planned $24-billion nuclear project in central Florida, as competition from low-cost gas has cast a pall over a long-promised renaissance.
Duke is only the latest in a list of companies that have either cancelled construction plans or announced closure of reactors that had been scheduled for costly overhauls.
The industry has run into a number of problems including weak power demand and cost over-runs. But it has also become hard to justify new nuclear in the face of a shale gas boom that not only has brought low prices, but is expected to keep a lid on the fuel costs for decades to come.
Ontario is currently redrawing its long-term energy plan, and will be reviewing proposals from Westinghouse and Candu Energy to build two reactors to make up for the loss of capacity when older ones reach end of life in the next decade.
Nuclear looks more challenging in the short term because it has high upfront costs – and financiers are extremely risk averse – though operating costs are lower.
But the cost of gas-fired power depends greatly on the price of the fuel, which has proved volatile over the past decade. Given the long life expectancy of power plants, it is difficult to count on a low cost of gas not only a decade from now, but two or three decades in the future. The gas industry has ambitious plans to export large quantities and boost demand for gas in the transportation sector.
North Carolina-based Duke says it remains committed to its nuclear program, proclaiming the “importance of fuel diversity in creating a sustainable energy future.”