Energy prices, including crude oil, continue to rise. The main reasons for this are the expansion of demand due to the global economic recovery and the increase in geopolitical risk, but the background is the lack of investment in resource development due to the trend of decarbonization. In response to the soaring energy prices, which can be said to be a side effect of decarbonization, there is increasing interest in low-cost and safe “small nuclear reactors (small module reactors / SMRs)”.
Sumitomo Mitsui DS Asset Management has recently compiled the following report on such a “small nuclear reactor”.
Soaring energy prices and return to nuclear power in Europe
The recent rise in energy prices, which is said to have been triggered by the lack of output of wind power generation in Northern Europe, does not seem to be settled at all. There are various backgrounds, but the most serious one is the imbalance between energy supply and demand.
Energy demand, which was sluggish due to the corona disaster, has been steadily recovering due to the subsequent economic recovery, but fossil fuel development investment has been sluggish due to the global decarbonization trend. As a result, US natural gas prices have tripled since early 2020, but the number of oil and gas fields in operation remains at just under 80% of what it was before the Corona disaster.
Due to the rise in energy prices, Japan’s fossil fuel import volume decreased slightly from the previous year, while the import value increased by about 50% to 16,919.8 billion yen.
Driven by these soaring global energy prices, the European Commission of the European Union (EU) announced in January this year that it would conditionally position nuclear power as “energy that contributes to decarbonization.” The EU has taken a major step toward promoting nuclear power development and investment in the future.
Safe and low cost “small reactor”
As the wind direction for nuclear power plant development changes, expectations are rising for the development of “small nuclear reactors” that are safe and inexpensive.
The first characteristic of “small reactors” is that the size of the reactor is small. Therefore, the surface area becomes large for the volume of the furnace, and theoretically, cooling becomes easy. For example, daikon radish and fried tofu in oden are difficult to cool, but thin kelp (which has a large surface area for its volume) cools quickly. For this reason, the “small reactor” is said to be excellent in safety because it facilitates cooling of the reactor in an emergency.
The construction of a “small nuclear reactor” takes a method of producing and assembling modularized parts at a factory. For this reason, quality control is easier and the construction period is shorter than existing nuclear power plants that are built from scratch at construction sites. Furthermore, since the structure is simple, maintenance costs can be kept low, and it is said that the total cost can be greatly reduced.
Accelerating competition for the development of “small nuclear reactors”, but issues remain
While investment in fossil fuels is tapering off, the shift to renewable energy is not progressing, so the competition for the development of “small nuclear reactors” will accelerate in the future as an entity that fills the gap. It looks like it will be.
There are 73 “small nuclear reactors” currently under development in the world, but the government is supporting the development in the United Kingdom and France, and in the United States, Microsoft founder Bill Gates and others are developing “small nuclear reactors”. We support companies that develop.
Also in Japan, Hitachi, Ltd. has received an order for the construction of a “small nuclear reactor” from a major Canadian electric power company as a joint venture with General Electric Company of the United States, and investment in the development of “small nuclear reactors” is becoming active in each country.
However, there are many unsolved issues surrounding nuclear power plants. Disposal of radioactive waste is a politically difficult issue, and the fact is that construction of final disposal sites is limited to some countries such as Finland.
Given this, Germany and Austria, which have already decided to eliminate nuclear power, are opposed to the new policy of the European Commission on sustainable energy, and it is hard to say that their stance on nuclear power in Europe is monolithic. In the situation. Depending on the supply and price of renewable energy and the urgency of geopolitical risks, there is a risk that the environment surrounding nuclear power plants will change, and it is likely that attention will be required to this trend.
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