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Argentina nuclear industry sees big promise in its small reactors

Argentina nuclear industry sees big promise in its small reactors

Reclusive German scientist’s legacy has created a potentially bright future

Argentina’s long-established nuclear power industry is facing financial difficulties as the government seeks to balance the budget. This could delay important projects, not least as Argentina aims to be a player in what may well develop into a growing global market for small-scale reactors.

The national industry began much thanks to a German scientist described by some as a fantasist and a scammer. In the late 1940s, Ronald Richter convinced Argentina’s President Juan Domingo Perón to underwrite research, at a secret lab in Patagonia, into building what he called a Thermotron.

After three years and spending about $410m in today’s money, the project proved a failure that eventually landed Richter in jail for fraud.

Even so, the flop laid the foundations for growth. A team of Argentine scientists used Richter’s facilities in the Patagonian mountain resort of Bariloche to build a research reactor in 1957, the first in Latin America.

The efforts continued and Latin America’s first nuclear power plant, Atucha I, began construction in 1968. The 362MW plant entered operation in 1974 near Buenos Aires. A second was built in the central province of Cordoba, the 648MW Embalse plant that went into commercial operation in 1984. Embalse is being revamped to add 35MW more capacity and extend its life.

Both Atucha I and Embalse were built on time and budget, says Jorge Lapeña, president of the Argentine General Mosconi energy institute and a former national energy minister. But a third project, he adds, “failed”.

Construction of the 745MW Atucha II started in 1982, he notes, but was suspended for a lack of funds 12 years later. Works resumed in 2006 but much of the equipment was obsolete and a main supplier, Germany’s Siemens, had pulled out of the reactor business, delaying operation until 2014.

Néstor Kirchner, Argentina’s Peronist president from 2003 to 2007, revived the nuclear programme after a plunge in natural gas production left factories and power plants with energy shortages.

Later, in 2015, deals were made to build three more nuclear plants, one with Russia and two with China. The plan was to build 3,000MW of capacity by 2025 for a total cost of $30bn.

That has since been scaled back to 2,000MW, with only two of the plants scheduled to enter operation between 2024 and 2027, according to an energy secretariat forecast. This is to take nuclear’s share of power generation from 6 per cent in 2016 to about 14 per cent in 2030, which, with an expansion of hydroelectric and other renewable power capacity, would halve thermal’s 66 per cent share of generation, the energy secretariat’s forecast adds.

The big problem is funding. “Argentina does not have capital to finance these plants,” says Alieto Guadagni, an economist and another former energy minister. He estimates the cost of each installed kilowatt of nuclear capacity at $7,000, compared with $900 for thermal power. A recovery in gas output thanks to the Vaca Muerta shale play has reduced concerns about shortages, and an incipient expansion of wind and solar capacity could thwart the advance of nuclear, Mr Guadagni says.

Argentina’s finances took a turn for the worse this year, leading the government of President Mauricio Macri to take a $50bn credit line from the International Monetary Fund and target balancing the budget by 2019.

Julián Gadano, deputy nuclear energy secretary, says the government is working on alternatives to fund the construction of more nuclear plant without “impacting negatively” on the budget.

He says sustaining nuclear’s share in the electricity system is key for meeting demand. “We must install more solar panels, more wind turbines and, of course, more nuclear power plants,” Mr Gadano says. “In the construction of a diversified, sustainable and safe energy matrix”, all are needed, he argues.

Arguably Argentina’s key nuclear objective is that of building a prototype Carem, a small modular reactor, which could provide big opportunities for export. In 2014, the Argentine national atomic energy commission began the project, with plans for the Carem to operate from 2022 or 2023.

Argentina is among several countries (others include China and Russia) working on such a reactor, Mr Gadano says. The aim, he adds, is to win a significant part of future demand for Carems, a global market projected to reach $400bn by the International Atomic Energy Agency. “We hope to capture between 15 and 20 per cent of this market,” he says.

Carems have low capital costs in nuclear industry terms and can be transported by truck to remote areas off the main electricity grid. Argentina’s 32MW prototype could supply a city of 100,000 people, while the commercial version could reach 120MW, Mr Gadano says. “It is the biggest technological bet that our country has today.”

Argentina has also developed a reputation for making nuclear research reactors, often used by industry as a neutron source and, mostly in diagnosis, by medicine. Sales have been made to such as Australia and Egypt, and a deal was struck this year with the Netherlands.

State company Invap makes the research reactors. Vicente Campenni, its chief executive, says Argentina’s financial difficulties are just another obstacle in the industry’s volatile history. “We have a way of facing problems with a spirit of survival,” he adds.

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