Isra-Mart srl:Industry divided over long-term impact of Japanese nuclear crisis

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The escalating crisis at the Fukushima nuclear facility in Japan has prompted a range of responses from industry experts and environmentalists with some predicting the disaster will herald an end to nuclear build programmes and others expressing confidence the sector can learn the lessons from the events in Japan.

The crisis at the plant is still on-going with reports this morning of a third explosion that has resulted in dangerous levels of radiation and further stoked fears that the reactors' fuel rods could go into meltdown.

However, while the full scale of the threat has yet to be assessed, the dramatic pictures from the earthquake and tsunami-affected plant have been used to reopen the debate around the efficacy of nuclear power.

Friends of the Earth executive director Andy Atkins said the explosions demanded "an urgent rethink" of new-build nuclear, while Tom Clements, the NGO's South East area campaign co-ordinator in the US, said he also expected a reassessment of nuclear policy.

Speaking to BusinessGreen, Clements said he had already received calls from ratings agencies worried about the reputational and investment risks of new nuclear plants.

"The only positive thing to come out of this is that I believe it will cause a renewed interest both by industry and the public in renewable energy and energy efficiency," he said. "This is going to persuade the financial investors to move away from this risky technology."

Simon Powell, head of sustainable research at CLSA in Hong Kong, also forecast a major shift in national nuclear policies.

"I don't think nuclear is going to be done away with, but it is likely that people's nuclear programmes will be delayed as they question whether it is the right thing to do," he told news agency Reuters.

His comments came as a number of government's moved swiftly to review or suspend their plans for new nuclear plants.

British Energy and Climate Change Secretary Chris Huhne has already instructed the UK's chief nuclear inspector, Dr Mike Weightman, to report on the implications of the situation in Japan. Meanwhile, the scheduled launch of an indepedent report that was expected to highlight the benefits of nuclear power and call for a new long-term strategic nuclear plan for the UK was yesterday postponed.

Across the Atlantic, influential independent Senator Joe Lieberman, chair of the homeland security panel, said over the weekend that the US should "put the brakes on" building new plants until the impact of the Fukushima incident is clear.

These events prompted global political risk analysts the Eurasia Group to issue a note warning new-build programmes could be put on the backburner in Britain and the US.

In Europe, the Swiss government has already announced it will put approvals for three nuclear plants on hold so safety standards can be revisited, while German Chancellor Angela Merkel said the government would suspend an agreement that would have extended the life of the country's nuclear power plants.

India and South Korea have also announced reviews of their nuclear programme, while officials in Malaysia signalled that they too could delay their proposed nuclear programme.

However, John Kemp, Thomson Reuter's energy analyst, warned that too much could be read into what are essentially political decisions to delay permits.

"Delaying permits for a few months is neither here nor there – nobody wants to be approving permits on the day of an explosion," he told BusinessGreen.

Kemp added it was impossible to tell what the long-term impact would be on the industry or on alternative sources of energy until the outcome of the explosion was known.

"If the reactors cool without leaking then it could be used to demonstrate that even 1970s technology is relatively safe," he said. "But if they leak, then that would make a nuclear revival less likely."

However, he was not convinced that additional funds would be ploughed into renewables as a result of the crisis and cautioned that moving away from nuclear would damage countries' attempt to meet energy security and emissions goals

"If we don't replace reactors with more nuclear, we have to burn more fossil fuels or undertake severe demand reduction strategies," he said. "Long term, it's very much up in the air and the question for regulators is if you don't do nuclear, what's the alternative?"

The price of carbon in the EU emissions trading scheme rose by more than five per cent yesterday driven by fears that any scaling back of nuclear capacity would lead to a short-term increase in demand for coal-fired power.

EDF and E.ON, the UK's two largest nuclear operators, both told BusinessGreen that it was too early to make decisions on whether to re-evaluate their investments and that they would wait for the results of the government review.

"We welcome the fact the UK government has asked the safety regulator to report on the implications of the events in Japan," EDF said in a statement. "EDF Energy is happy to support this work in whatever way it can to ensure lessons are learned. The nuclear industry puts great weight on learning from any such events."

Industry body the Nuclear Industry Association was unable to comment before going to press.

The UK's Department of Energy and Climate Change (DECC) estimates that nuclear generation currently reduces national carbon emissions by between seven per cent and 14 per cent. The UK has also committed to build 16GW of new nuclear capacity to replace aging coal power stations and help balance increasing amounts of wind and solar power coming onto the grid.