The Asia-Pacific nuclear reactor construction market is expected to decline at a CAGR of around 6% during the forecast period of 2020 - 2025. Factors such as a large number of reactors with age exceeding 30 years and shift of energy generation from oil and gas towards nuclear energy are expected to be major drivers driving the market. Also, advancement in technology, leading to an increase in efficiency and reliability of modern nuclear power plants, has been a significant factor for the growth of the Asia-Pacific nuclear reactor construction market. However, renewable sources of energy making nuclear power uneconomical has somewhat hampered the growth of the market.
Key Highlights
- The pressurized water reactor has dominated the market in recent years and is expected to dominate the market in the forecast period, owing to factors like low cost operating reactor, as both the coolant and the moderator used in the reactor is light water and relatively higher controllable and safer nature of the reactor.
- The increase in electricity demand in the region is expected to provide an excellent opportunity for the Asia-Pacific nuclear reactor construction market in the forecast period.
- China is expected to dominate the market, over rising concerns over pollution from energy plants based on coal and rising electricity demand. The country is the largest electricity generator from nuclear power plants in the region and produced 294.4 TWh of electricity from its nuclear power plants, an increase of over 16% from 2017.
Key Market Trends
Pressurized Water Reactor to Dominate the Market
- The pressurized water reactor (PWR) nuclear reactor sector has dominated the market in the past and is expected to do so in the forecast period too. The reactor is the most popular form of the nuclear reactor due to its higher control and safety compared to other forms of reactors.
- PWR has some advantages over other reactors that make it the most used nuclear reactor in the globe. PWR reactors are low cost operating reactor, as both the coolant and the moderator used in the reactor is light water, which is cheaper than other kinds of coolant, like heavy water.
- With less fissile material in the core reactor, chances of additional fission reaction reduce, that makes the reactors to have only the required temperature and reduce the chances of facing any kind of unfavorable conditions, thus making the reactor safer and controllable. Lastly, PWR has separate loops for water and nuclear reaction. This reduces the chances of water contamination with radioactive material.
- In 2018-19 six pressurized water reactors were added to the grid in China and one in South Korea. Aside from these, a number of pressurized water reactors are planned in the region.
- Therefore, the aforementioned factors are expected to drive the market in the forecast period.
China to Dominate the Market
- China has dominated the nuclear reactor construction market in 2018 in the region and is expected to continue its dominance in the coming years as well. The country has been very active in the sector in recent years in a bid to reduce dependence on coal-based power plants. In 2018 China produced over 66% of its electricity from coal.
- China has the largest new-build program for nuclear power in the world. The strong project pipeline strengthens the outlook for the Chinese nuclear industry, which has previously suffered from regulatory headwinds, stemming from the decision by the government to suspend approvals for nuclear reactors until a re-examination of plans has been concluded after the 2011 Japanese Fukushima Disaster.
- China is projected to be the second-largest nuclear market in the world, by capacity, in 2027, only marginally smaller than the leader, the United States. Although China's nuclear policy has undoubtedly been toned down in the aftermath of Fukushima, China remains the global frontrunner in terms of its nuclear ambitions. The government targets to have 58GW of nuclear capacity operating by 2020-2021, and 150GW by 2030.
- Moreover, it is estimated that nuclear power is likely to remain an integral part of the Chinese energy policy, as the country tries to meet rising power demand, while also tackling emissions.
Competitive Landscape
The Asia-Pacific nuclear reactor construction market is moderately consolidated. Some of the major companies are Rosatom State Nuclear Energy Corporation, Westinghouse Electric Company LLC (Toshiba), Larsen & Toubro Limited, Mitsubishi Heavy Industries Ltd, China National Nuclear Corporation among others.
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