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Market

A growing market

Most of the income is generated by the commercial nuclear­ power industry, which includes nuclear power plants in opera­tion, under construction and in process of decommissioning, as well as reactor and fuel manufacturers. The market­ is in a long-term growth phase as a consequence of several factors:

  • The building of new reactors
  • The modernization of existing reactors
  • The decommissioning of older reactors
  • The shortage of storage facilities for low and intermediate level waste and high storage costs
  • The management of waste and facilities left behind from civil and military research programs

Efforts to reduce dependency on fossil sources of energy such as oil, coal and gas, in combination with an attractive climate profile, have brought about a nuclear power renaissance. At present 56 new reactors are being built around the world and many are also investing in raising the capacity and extending the life of existing nuclear power plants. The new reactors are expected to increase the total nuclear power capacity by about 52 GW or 14 per cent. Most new construction is in Asia, where growth countries such as China­, India and South Korea have a growing demand for electric power. Of the eleven reactors on which building was started in 2009, nine are in China. In the West, Finland, France and the USA are each building a reactor while several­ of the former East European bloc countries are building new nuclear power.

Apart from the 56 reactors being built, just over 100 new reactors are at the planning stage and another 250 have been proposed. Most of them are in Asia, but there are also considerable initiatives in the West. The USA has well-­advanced plans to build up to 20 new reactors, while the UK government has pointed out ten sites as suitable for new reactors.

Studsvik is favored by the new construction plans, partly­ through its Global Services operations, and partly through the nuclear engineering services offered by all the geographical segments. Global Services carries out tests of material­ and fuels when new reactors are being designed and the demand for software is growing at the same time. Engineers carry out safety and radiological studies for the planned nuclear power plants and draw up the waste and decommissioning plans that must be in place before building starts. In total engineering services are estimated to account­ for about 10 per cent of the cost of a new nuclear power plant.

The positive development also means that older reactors are being upgraded. Around one third of the world's 436 reactors that are currently in operation are over 30 years old. Wear and tear mean that components and materials need to be replaced to maintain good safety levels and efficient operation. It is not unusual that capacity is increased in connec­tion with more extensive modernization, which is the path that Sweden, among others, has chosen.

There are plans to close about ten reactors in the next few years. Many countries have also started to deal with facilities­ and waste from the 1950s and 1960s, when the first power-generating reactor types were developed and military use of nuclear energy increased. In the infancy of nuclear power the view of waste management was less devel­oped than it is now, which means that management of part of this waste is a challenge even with current technology.

Operation and decommissioning of nuclear power plants and other nuclear facilities is constantly giving rise to waste. This waste can either be deposited directly or treated­ before it is sent for disposal. Treatment of waste reduces the waste volume and stabilizes it chemically, which reduces storage costs and contributes to safer storage.

Nuclear waste is stored in the country that produces it, but some countries allow the waste to be sent abroad for treatment. In Europe there are now indications from an increas­ing number of countries that they accept such a procedure. In 2008 Finland gave the all-clear to treat low and inter­mediate level waste outside its borders and in France there is also a clear interest in treating such waste abroad. An Italian­ nuclear power company decided in 2009 for the first time to send low-level waste to Sweden for treatment.

The recession slowed demand in the short term in the UK and US markets in 2009, while the German and Swedish markets were only marginally affected. The UK market is to a great extent dependent on government funding and the tight situation of central government finances meant that the market contracted, despite unchanged appropriations to the sector. The budget cuts expected in 2010 have thus, at least partly, already had an impact. In the long term the UK market is expected to return to the vigorous growth that was in evidence in the mid-2000s. In the USA demand fell as a consequence of customers deciding to reduce their expenditure by temporarily storing waste on their own sites. That business tactic is creating a pent-up need that may, however, continue for a certain period.

 

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Studsvik occupies a unique position as an independent player

Studsvik is one of very few independent players offering variou­s forms of processing of radioactive waste. The most common alternative to treating waste is direct disposal. In the USA EnergySolutions handles low-level waste by offering direct disposal. For large components, such as steam generators, heat exchangers and reactor pressure vessel heads, Studsvik is alone in treating the material so that substantial volumes can be free released and reused.

In 2008 the US repository for class B and C low-level waste in South Carolina was closed to as good as all the US players. Studsvik launched an alternative solution, with treatment of waste at Erwin and storage with Waste Control­ Specialists (WCS) in Texas and since then about half of the nuclear power plants in the USA have associated themselves with this business model. Studsvik's model is the only alternative that has been offered so far for this type of waste.

When upgrading reactors, Studsvik can offer the same type of engineering services as for new construction. When a nuclear power plant is to be decommissioned the work needs to be planned carefully, and different types of calcula­tions and analyses carried out. In engineering services Studsvik competes mainly with consultants that do not specialize­ in nuclear technology, such as the Swedish companies Sweco, ÅF, Vattenfall Power Consultants and the British­ Aker Solutions and AMEC. Consultants specializing in nuclear­ engineering are often small companies.

In most of the operating efficiency area of opera­tions within Global Services customers often run their own opera­tions and some research institutions also offer this type of ser­vice. There are, however, no commercially operating competitors, which, combined with an international circle of customers and specialized contracts, puts Studsvik in a unique position in the market. The operations conducted by the segment cover the entire nuclear power lifecycle. Consequently, the market is currently favored both by new construction plans and upgrades.

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