LONDON--(BUSINESS WIRE)--Technavio market research analysts forecast the global nuclear decommissioning services market to grow at a CAGR of close to 35% during the forecast period, according to their latest report.
The report has further categorized the global nuclear decommissioning services market into different segments based on reactor type (pressurized water reactor and boiling water reactor) and geography (EMEA, APAC, and the Americas).
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Technavio analysts highlight the following three market drivers that are contributing to the growth of the global nuclear decommissioning services market:
- Worldwide shutdown of older reactors
- Shift in energy landscape
- Regulatory changes post nuclear plant accidents and the support of the government
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Worldwide shutdown of older reactors
During the recent years, there has been continuous decommissioning of nuclear power plants. One of the reasons for this decommissioning is non-economic viability. After the Fukushima plant disaster in 2011, nuclear power was phased out by a large extent in many countries such as Germany, Japan, France, and the US. For the old plants to continue operations, several safety norms and installation of equipment were made necessary. This was done to prevent incidents like the Fukushima accident. But, this investment led to closure of some of the plants as it was too expensive to operate.
According to Thanikachalam Chandrasekaran, a lead analyst at Technavio for power research, “By the end of 2016, about 163 nuclear power plants were under different phases of decommissioning. The decommissioning process of some plants started earlier than the scheduled end date. It is predicted that non-economic viability was the factor for the shutdown of 71% of the total number of plants. The technological learning curve in renewable and gas power plants has made them cheaper. This has made nuclear power unprofitable. Therefore, the global nuclear decommissioning services market is expected to be fueled by the closure of older nuclear reactors.”
Shift in energy landscape
There has been a tremendous growth in renewable energy capacity as it is supported by lucrative policies, incentives, and rebates. The shares of renewable and alternative sources of energy in the global energy market are rising continuously as significant investments have been made in low carbon technologies over the years. The continuous investment has generated advances in technology that are bringing renewable energy costs to competitive levels. In countries such as the US, old nuclear power plants are being phased out due to low profitability.
“The focus on renewables has increased and the focus on nuclear power has decreased because of the adoption of smart grid and energy storage, along with the reduction in renewable technology costs. Additionally, the growth of the global nuclear decommissioning services market in short to mid-term future is predicted to be fueled by the decommissioning of older unprofitable nuclear power plants,” says Thanikachalam.
Regulatory changes post nuclear plant accidents and the support of the government
Decommissioning is a process where a nuclear plant must be upgraded or shut down like other power plants as it wears out or the operating license expires. Nevertheless, the decommissioning of nuclear power plants gained high-interest post the fatal nuclear accidents such as the Chernobyl disaster in 1986 in Ukraine and the Fukushima accident in 2011.
According to the International Nuclear and Radiological Event Scale (INES) that was introduced by the International Atomic Energy Agency (IAEA), both accidents are classified as a level 7 incident because they released a high scale of radioactive material, thereby having a negative impact on the environment and humans.
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