New-Build Nuclear Is Dead: Morningstar

Nuclear reactors are not a viable source of new power in the West, Morningstar analysts conclude in a report this month to institutional investors.
Nuclear's "enormous costs, political and popular opposition, and regulatory uncertainty" render new reactors infeasible even in regions where they make economic sense, according to Morningstar's Utilities Observer report for November.
"Aside from the two new nuclear projects in the U.S., one in France, and a possible one in the U.K., we think new-build nuclear in the West is dead," Morningstar analysts Mark Barnett and Travis Miller say in the report.
This view puts Morningstar on the same page as former Exelon CEO John Rowe, who said in early 2012 that new nuclear plants "don't make any sense right now" and won't become economically viable for the forseeable future.
Some nuclear cheerleaders continue to champion reactors as a source of new power, like members of an industry panel I covered last year who declared a renaissance of the nuclear renaissance and predicted nuclear plants would replace aging fossil fuel plants. They include the executive director of Exelon Nuclear Partners, who said, “The future of nuclear is looking pretty good.”
The Morningstar analysts call the nuclear renaissnace a "fiction" and a "fantasy," at least in the West.
"The economies of scale experienced in France during its initial build-out and the related strength of supply chain and labor pool were imagined by the dreamers who have coined the term 'nuclear renaissance' for the rest of the world. But outside of China and possibly South Korea this concept seems a fantasy, as should become clearer examining even theoretical projections for new nuclear build today."
South Korea is in the midst of an economy-wide build out of third-generation nuclear reactors. China has 17 reactors now, 30 under construction, and many more planned.
While nuclear development in Asia is good news for nuclear equipment suppliers, the analysts say, it could ultimately lead to bad news.
"China in particular is building reactors at a pace that should raise concerns about safety and construction quality regardless of the sophistication of developers."
The Morningstar analysts considered conditions about a decade ahead, Miller told me, or until the energy markets change significantly from today’s environment.
"That obviously could mean decades if we continue to be in an environment with low gas prices, slow-growth power demand and environmental opposition," Miller said via email.
They considered traditional forms of nuclear generation—pressurized water reactors, boiling water reactors—and did not consider the small modular reactors championed by the Obama Administration, the depleted-uranium reactors championed by Bill Gates, or other next-generation designs.
In the Morningstar report, only Exelon earns the analysts' wide-moat rating for its economic position.
Read More: