Antony Froggatt
Senior Research Fellow, Energy, Environment and Resources

With the ongoing actions to control the radiological and engineering problems at the Fukushima nuclear power plant in Japan, it is too early to gauge the full environmental and societal costs. There is however no doubt that this nuclear accident has already affected the outlook for the global nuclear industry.

Safety first

Japan's nuclear crisis has renewed concerns over the safety implications of older operating reactors, as those at Fukushima are 40 years old. The German government has already announced the temporary closure of its seven oldest reactors together with a national review. The EU as a whole will undergo a 'stress test' on all nuclear facilities during 2011. Countries like China, India and Russia will review the future of both their current and planned programmes.

In the coming months, there will undoubtedly be heated debates over the siting of nuclear power plants, especially the wisdom of building them in seismically active regions. But greater attention should also be given to the threats to energy infrastructure posed by other natural disasters such as flooding, storms and droughts - the frequency of which is expected to increase as a result of climate change.

One unique characteristic of Fukushima has been the cascading interactions between the reactors and the fuel cycle facilities, as explosions and fires in one facility caused damage to others. This chain of events was not seen in other major nuclear accidents like Chernobyl in 1986. Critical damage to the spent nuclear fuel storage pools in Fukushima also highlighted the fact that they are not designed to withstand the same external or internal impacts as the reactors themselves. As problems in the spent fuel storage facilities has significantly contributed to the complexity and severity of Japan's nuclear crisis, a review of this storage policy, with potential requirements for away-from-reactors storage, is likely to follow suit.

The likely impacts on the so-called global nuclear 'renaissance'

What matters more to the prospect for new build (than government reviews) is the view of the financial community. Nuclear power, with relatively large upfront costs and longer construction and planning times, is already regarded as a greater investment risk than other electricity sources, particularly natural gas.

The key question is the extent to which the prospect of regulatory response to nuclear risks will lead to higher financial costs and whether, with potential additional engineering requirements, this will render nuclear power less economically attractive. Will these rising cost considerations affect both the timing and the volume of orders for new reactors? Most commentators are of the view that a delay in orders for new reactors is inevitable, raising questions about which energy source will fill the gap. There will be climatic and/or energy-price implications if this delay results in the increased use of coal in Germany or China, and higher volumes of liquid natural gas imports into Japan.

All these critical questions on the future of nuclear energy are coming at a time when concerns about global security of supply are also heightened by the ongoing problems in the Middle East and North Africa region. As energy availability and price is critical to society, governments must work with businesses and consumers to build a joint vision for a sustainable and secure energy future. The cheapest and quickest route is more efficient use of energy, but this requires greater transparency and almost certainly more regulation.

Renewable energy can meet the demand

The other underutilised resource is renewable energy. Despite its tremendous growth in the last few years across all regions of the world, some still regard renewables as a costly irrelevance. Studies increasingly show that renewable energy can meet the rising global energy demand, but is only possible with radical reforms of the energy sector - including how energy is used and managed and not just supply security.

Engineering reviews of nuclear safety are critical but insufficient. Governments, businesses and other stakeholders should also use this opportunity to conduct broader assessments of the nuclear risks and energy needs, and to create a joint vision for a sustainable and secure electricity and energy future.