Next Generation of Nuclear Reactors Could Extend Uranium Bull Market
By: James Finch | Posted: 08th June 2006
Nearly 80 percent of the world's operating commercial reactors were built more than 15 years ago. The nuclear renaissance, since 2002, has been driven by the anticipated evolutionary shift from one reactor design to a later generation. Most of the world's nuclear reactors are the second generation.
In 1996, Japan became the first country to begin using the third generation of reactors. This transitory third generation could dominate nuclear reactor designs for the next two to three decades. The one exception, the Pebble Bed Modular Reactor (PBMR), could revolutionize the entire nuclear energy field and accelerate the global demand for uranium.
Newer, more high-tech designs have been selected to launch the Generation IV nuclear reactors as early as by 2020. The preponderance of such reactors would not likely arrive until after 2030. Subsequently, our forecasts of a sustained bull market in uranium, one which might last through 2015, could result in an understatement. As nuclear countries convert over to the next generation of reactors, during the coming two decades, there should be several significant growth spurts, within this super bull uranium cycle of this sector.
Several countries are building new reactors to replace their aged fleet. New reactors will have to replace decommissioned ones, said the International Energy Agency. The hope is to maintain nuclear energy's percentage in the overall energy source mix. Otherwise, air-polluting coal will fill the gap. Ontario's Bruce Power plans to rebuild two nuclear reactors, which have remained idle for the past decade. Canada's Ontario Power Authority announced plans to build twelve new plants in place electricity-generating coal plants. More importantly, as many as 20 of Ontario's AECL-designed CANDU reactors may be retired. This opens the door for nuclear reactor vendors to replace the CANDU with a third generation reactor.
Finland's Teoliisuuden Voima' (TVO) utility company should have its third reactor powered up on Olkiluoto island in western Finland by 2010. The 1600 MW pressurized water reactor, aptly named Olkiluoto 3, will join two reactors built in the 1970s. With the addition of the third, much larger reactor, Finland will derive about 30 percent of electricity of nuclear energy. Finland moved forward in building Europe's first nuclear reactor since 1991 because of worries about energy supplies. They depend for 100 percent of their natural gas supplies from Russia. Many Finns are concerned about rising natural gas prices and availability of supply. This will be the world debut of the EPR (European Pressurized Reactor) which is being built by the joint venture of Areva's Framatome and Siemens AG.
A second EPR is expected to be operational by 2012. France is adding more nuclear to its existing infrastructure by constructing its 1600 MW reactor for the power utility Electricite de France in western France at Flamanville. As we were going to press, the French Prime Minister had approved a plan to build the country's second nuclear plant using third generation technology.
By the end of the second decade, China, India, Pakistan, Iran, Russia, Argentina, Brazil, Bulgaria, Chile Turkey, the Czech Republic, South Korea, Taiwan and South Africa each hope to have built one or more reactors to keep up with electricity growth in their countries. For example, South Korea currently has four reactors under construction and a further eight planned by 2015. By then, the country hopes to have boosted its total capacity of nuclear energy production to 13,000 MW. Korea's electric company, KEPCO, maintains some of the world's operational ratios with its twelve reactors. Russia is constructing six nuclear plants and hopes to build eight more. China, India, Japan, South Korea and Taiwan combined could account for another 85 to 100 new nuclear plants over the next two to three decades.
There could be many surprises, especially in South America. During the last uranium bull market, several southern hemisphere countries had announced great expectations. Brazil hoped to build as many as 30 new reactors, Argentina aimed for six, Venezuela for as many as three, Mexico for between two and ten, and Chile, Peru and Colombia for as many as two. Those are the wild cards, which might benefit from the more advanced smaller scale commercial reactors, such as the Pebble Bed Modular Reactor. New engineering designs will spur demand for nuclear energy as fossil-based energy prices continue to remain high.
About the Author
Occupation: Writer
James Finch is a contributing editor for StockInterview.com and other publications. http://www.stockinterview.com
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Tags: three decades, energy source, third generation, preponderance, energy field, global demand, nuclear reactor, growth spurts