For those paying attention, it is clear that renewable energy is disrupting the global energy system. Smart energy policy means that countries no longer have to choose between electrification, health and environmental issues. Technological advancements and rapidly falling prices of renewable energy means coal-fired and nuclear power is increasingly becoming untenable.
These developments underscore what was a disastrous year for nuclear power sector over the past 12 months with delays and cost over-runs typical of nuclear power station builds.
So what does this mean for Bangladesh’s Rooppur nuclear power project?
Bangladesh sees Rooppur as a way of diversifying its electricity generation mix, thereby increasing energy security. It has a planned completion date in 2024. There is considerable doubt as to whether the current US$12.65 billion budget will represent the final bill. Russia, which is providing a loan covering most of the cost of the project, sees the deal as a way of propping up its nuclear industry in the face of the global decline of nuclear power.
A global stocktake of nuclear builds shows just how much trouble the industry is in.
French nuclear energy company AREVA is technically bankrupt after making a loss of US$12.6 billion over the last six years. AREVA is also contending with a major quality-control scandal which has seen a dozen French nuclear reactors taken offline for safety checks. The years of losses meant a US$5.3 billion bail-out was required from the French government.
Meanwhile EDF and Areva are struggling to complete two nuclear projects in Europe - Flamanville in France is seven years late and currently €7 billion over budget, Olkiluoto in Finland, is ten years behind schedule and is coming in at three times over budget.
Hinkley Point, the first nuclear plant to be built in the UK since 1995 will be the most expensive power plant in the world and may never actually become operational. Hinkley developer EDF has already admitted that the project is up to £2.2 billion over budget and running 15 months late.
In fact, of the 57 nuclear plants currently under construction globally, 37 are running behind schedule according to the 2017 World Nuclear Industry Status Report. The report also notes that the average construction time of a nuclear power plant over the last decade was more than ten years, making the schedule for Rooppur look highly ambitious for a country building its first ever reactor. So much for energy security.
Other countries that are new to nuclear power are not faring well with their projects. There are only two nuclear newcomers currently constructing; the UAE has announced it has had to delay start-up of its first unit due to a lack of trained and licensed domestic personnel. Meanwhile progress has been halted at the Ostrovets project in Belarus after the reactor pressure vessel was dropped during installation.
What’s more, it seems Bangladesh’s decision to stick to this whitest of elephants goes against the global trend. The new South Korean government has recently re-committed to a phase out of nuclear power with no more reactors to be planned. South Korea joins Taiwan which passed legislation in January 2017 which requires the end of nuclear power generation in that country by 2025. Vietnam had earlier abandoned plans to build two nuclear power plants citing rising costs and safety concerns. The plants were to be built by Russia’s Rosatom (the builder of Rooppur) and a consortium of Japanese firms.
This trend can be summed up with the observed decline in nuclear energy’s share of the global energy mix down to 10.5% from a peak of 17.5% in 1996, according to the 2017 World Nuclear Industry Status Report.
The picture couldn’t be more different when looking at renewable energy.
The International Renewable Energy Agency’s Director-General Adnan Z. Amin has said that “Turning to renewables for new power generation is not simply an environmentally conscious decision, it is now - overwhelmingly - a smart economic one. Governments around the world are recognizing this potential and forging ahead with low-carbon economic agendas underpinned by renewables-based energy systems. We expect the transition to gather further momentum, supporting jobs, growth, improved health, national resilience and climate mitigation around the world in 2018 and beyond.”
For Bangladesh, renewable energy can provide an alternative to nuclear in diversifying Bangladesh’s electricity system whilst decreasing reliance on fossil fuel and natural gas imports. As noted by Dipal Chandra Barua co-founder of the Grameen Bank and President of the South Asian Network for Clean Energy, “as of 2017, Bangladesh has the world’s largest SHS program with about 5 million SHS. Over 30 million people are benefiting directly from solar energy and over 100,000 new jobs have already been created”.
Although a densely populated country, Bangladesh has enough land to cater for a first wave of utility-scale solar plants. In its 2017 World Energy Outlook, Bloomberg New Energy Finance forecasts that US$10.2 trillion will be invested in power generation capacity globally through to 2040. Three-quarters of that investment is forecast to be made in renewable energy technology. Bangladesh needs to press on with this or be stuck holding out for out-dated, expensive, slow and dangerous technology.
Finally, renewable energy has a huge schedule advantage over nuclear; projects can be completed in perhaps 18 months rather than ten years.
The future economic growth, poverty reduction and security of Bangladesh, will rely on a rapidly growing and reliable electricity network. Renewable energy is now best placed to support this growth and it continues to gain momentum worldwide. Meanwhile the nuclear power industry is in decline - nothing is more clear.
*Simon Nicholas is energy finance analyst, Institute for Energy Economics and Financial Analysis