Editor's Comment: Nuclear future?
By Chris Sleight12 April 2011
The devastation caused by the March 11 earthquake off Japan's northeast coast will have huge consequences for the construction industry as its impacts begin to be understood and reconstruction work gets underway.
The cost of reconstruction can only be estimated at this point, and those guesses are likely to understate the true cost. As you will see in this month's news pages, initial estimates put the bill for rebuilding at around US$ 185 billion. That seems low when you consider that reconstruction following the smaller earthquake in Kobe in 1995 cost around US$ 200 billion, and took about five years.
But in many ways, that is a question for Japan alone. It is a famously impenetrable market for foreign companies, and there is not likely to be any significant involvement for foreign engineers or contractors in the reconstruction work.
The bigger question for the global construction industry centres around nuclear power. As iC went to press, the Daiichi nuclear power plant in Fukushima was still in a precarious state, and it remains to be seen how bad the radiation leaks from the plant will be.
Like the Three Mile Island and Chernobyl disasters before it, the Fukushima accident is bound to reopen the debate about the safety of nuclear energy. It is a debate that can be driven more by emotion and ideology then cool analysis of the facts, and this is understandable given the horrifying consequences of nuclear accidents. But it would be a blow if the world's governments suddenly went cold on nuclear power for the wrong reasons, especially given that the industry has been gradually returning to favour due to its low carbon emissions.
According to the International Atomic Energy Agency there are currently 65 nuclear power plants under construction around the world, including 27 in China and 11 in Russia. Even the most modern nuclear power plants cost at least US$ 1 billion per GW to build, and each of these 65 projects is a multi-GW scheme. That gives some indication of the size and value of the market.
There is no suggestion at the moment that any will be stopped mid-construction, there must surely be concerns over the future pipeline of projects. In the broadest sense and in the long term, this should not be a problem for the construction industry - the world still needs energy, and the construction sector will build the generation capacity whether it is in the form of nuclear plants, fossil fuel power stations or renewables such as hydroelectric, wind, solar or tidal power.
However, if there is a sudden lurch away from nuclear power, there will undoubtedly be a hiatus in construction programmes as alternative energy sources are developed and planned. Given the long lead times for power plants, it could be a lengthy delay, and that would be bad for the world in general, not just the construction industry.
Many developing markets are already struggling to put enough generating capacity in place to keep up with current demand, and if the ability to generate electricity in the future were to be hampered by taking nuclear power off the menu, economic growth would certainly suffer.
The other point is that if nuclear energy was to be cut back or even phased out around the world, we would undoubtedly have to burn more fossil fuels. That would mean more CO2 in the atmosphere, and perhaps accelerated climate change as a result.
The debate about nuclear safety after Fukushima needs to happen, but it needs to be a 'big picture' debate, driven by facts not emotions.