Nuclear revival gathers momentum
Montreal, 14 September 2010: The world stands on the verge of the largest expansion of nuclear power since the 1980s, according to research by Ernst & Young, with 65 reactors under construction in 15 countries, a further 120 being actively pursued and many existing reactors being refurbished.
Ben van Gils, Ernst & Young Global Power and Utilities Leader comments: “Many countries stopped building new nuclear power stations after the Three Mile Island and Chernobyl disasters and lost the skills necessary for these big capital programs. Now, research shows a resurgence in nuclear construction across the globe driven by a need for more secure energy supplies, coupled with concern over climate change.”
Research shows that by the period 2015-2019, additions to nuclear capacity are likely to surpass those of the mid-1980s, at just short of 100 gigawatts electrical (GWe) over the five year period (planned and under construction). The Asia-Pacific region, which sustained nuclear build through the 1990s, will ramp up its additions in the 2010-2014 period, only to be overtaken by EMEIA in 2015-2019. Significantly, the Americas is expected to increase its rate of construction by over eight times from 2010-2014 to 2015-2019 (from 1869 megawatt electrical (MWe)) to 16,545 MWe).
However, many new projects are facing significant challenges – due to cost overruns, schedule delays and the withdrawal of political and financial support.
Ben van Gils adds: “it’s clear that a number of risks arise throughout the project life cycle. Planning has traditionally been an area of weakness, which needs to be addressed to ensure the long term viability of many planned nuclear projects. With more time dedicated to robust planning up-front and better project governance, owners can positively influence the project and avoid the more costly mistakes that occur once they’ve started construction.”
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Notes to editors:
Ernst & Young has identified 10 areas that project owners need to get right in order for their project to succeed:
1. Financial backing and loan guarantees
2. Proactive management of regulatory requirements
3. Formal risk management practices
4. Contingency management and business modeling
5. Risk-sharing agreements
6. Balanced contracting strategy and organizational capabilities
7. State-of-the-art governance practices
8. Mature project management practices
9. Quality and safety culture
10. Rigorous financial accounting and controls
For a copy of the full report, please contact Claire Vernon: Claire.vernon@uk.ey.com
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