Ad hoc Expert Group on Market Competition in the Nuclear Industry

Building, operating and fuelling nuclear power plants requires their owners to procure a variety of specialised nuclear equipment, materials and services. The markets to provide these have changed substantially over time as they have evolved from the government-led early stages of the nuclear industry.

Since the 1980s, there has been much consolidation and retrenchment in the nuclear industry which in many sectors has resulted in the emergence of a small number of large global players. This partly reflects special factors in the nuclear industry, but also the more general trend towards globalisation of major industrial activities. Further consolidation and restructuring may take place in response to market changes.

Meanwhile, electricity market deregulation in many OECD countries has changed the business environment for nuclear power plant (NPP) owners and operators. Utilities that were once state-owned or price-regulated monopolies have been exposed to competition. This has forced them to improve their business performance at all levels, making them more cost-conscious while freeing them from some government-imposed restraints.

Thus there have been major structural changes in both the producer and consumer sides of the nuclear fuel and nuclear design and engineering markets since the major expansion of nuclear power in the 1970s and 1980s. With renewed expansion of nuclear power expected over the coming years, the NEA is studying how the major market sectors are performing at present and how they can be expected to change with a significant upturn in demand.

Objectives and scope

The study will cover market competition in the supply of goods, materials and services for the entire nuclear fuel cycle, for the design and construction of new NPPs and for the maintenance, back-fitting and upgrading of existing NPPs. From this broad scope, the key markets will be identified for in-depth assessment.

Analysis will be conducted to determine if effective competition exists in these markets and to assess the various constraints which may limit it. These constraints may include: import tariffs and other trade barriers; non-proliferation controls; other national and international regulations; limitations on the transport of nuclear materials; restricted or proprietary designs and technologies; and other barriers to market entry. The historical development of these markets will be outlined in order to put these considerations in context.

Given the renewed interest in expanding nuclear capacity in several OECD countries, the study will assess possible future trends in response to likely increases in demand over the next 10 years and beyond. In particular, the report will aim to identify any market sectors where constraints may prevent the supply of certain goods and services increasing in line with demand and where supply problems and/or price shocks could occur as a result. In such cases, a policy response may be required if these markets are to work efficiently.

An ad-hoc group of experts has been convened to carry out the study. The group plans to publish its report in 2008.

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Last updated: 30 July 2008