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Growth in the Nuclear Energy Industry Will Continue To Be Driven by Developing Countries
The global Nuclear energy industry saw a slight decline in 2011 following the response to the Fukushima disaster which has seen several nations, including Japan, move away from investment in nuclear technology. Despite the ongoing financial difficulties that persist across many nations around the world nuclear energy still forms a prominent part of the energy plans of many nations, meaning that the industry will experience major rates of growth in terms of revenue as a result of increasing prices.
The global Nuclear Energy industry declined by -1.1% in 2011 and reached a value of $193.4 billion, representing a compound annual growth rate (CAGR) of 0.1% for the period spanning 2007-2011. Volumes also declined in 2011, by -4.3% to reach a volume of 2,429.9 thousand gigawatts; representing a CAGR of -1.1%.
Europe continues to have a significant industry share of 54.5% in 2011 with a value of $105.4 billion, representing a CAGR of 6% between 2007 and 2011; with France being the largest regional market. Nuclear power is the primary source of electric power in France and its electricity price is among the lowest in Europe. The French government’s aim in increasing the share of total power generated from nuclear to 25% by 2020 is an example of the investment and commitment to nuclear energy that many governments hold. On the other hand some of the European markets have struggled in recent years with Germany’s being particularly affected following its decision, after the Fukushima nuclear disaster, to shut down eight of its reactors. However Europe’s position has been fortified somewhat by the strongly developing industry’s in Eastern Europe with Romania and Russia exhibiting strong growth.
The Asia- Pacific industry is lagging behind its main rivals in terms of industry share which comes in at 21.4% in 2011 to reach a value of $41.3 billion, representing a CAGR of -4.2% between 2007-2011. Much of this is due to the Japanese market, which came in at -16.1% over the same period. The decline in this market is almost solely a result of the Fukushima nuclear disaster in 2011 which has totally obliterated the reputation of nuclear energy within Japan. Since then only one nuclear reactor remained in operation; however the last of the reactors went offline in May 2012 leaving the future of Japans nuclear energy unclear and uncertain. However, the South Korean market has increased over recent years with a CAGR of 11.9% between 2007-2011 and along with India and China offers; future potential for growth in Asia Pacific.
The Americas nuclear energy industry is also behind its main rivals in terms of industry share, at 23.9% in 2011 to reach a value of $46.3 billion, representing a CAGR of -6.3% between 2007 and 2011. Much of this has to do with the lack of growth in the United States which came in at a CAGR of -8.0% over the same period. Following the Fukushima nuclear disaster, there has been a decline in the public support for building nuclear power plants in the United States. However, the region’s position has been strengthened somewhat by strong growth in South America, with Brazil exhibiting a CAGR of 19.9% between 2007 and 2011 in revenue terms.
Growth in the nuclear energy industry will continue to be driven by developing countries such as China, India and Russia. Before the Fukushima disaster, Japan was the third largest provider of nuclear energy in the world; however there has been a decline in the market as a result of nuclear reactors being decommissioned. The nuclear disaster in Japan has also had a profound effect on countries such as Germany and Switzerland who have followed the Japanese example in downsizing their nuclear industries.
Other nations such as South Korea, South Africa, Ukraine, Brazil, Canada, France and the United Kingdom and many other countries in Central and Eastern Europe; are increasing nuclear energy in their economies and government initiatives have been put in place to achieve this. Despite recent setbacks the future for nuclear energy in many countries remains positive with strong growth expected.