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S&P Global — 20 Apr, 2023 — Global

Daily Update: April 20, 2023

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By S&P Global

Start every business day with our analyses of the most pressing developments affecting markets today, alongside a curated selection of our latest and most important insights on the global economy.

Nuclear Energy, Back to the Future

Nuclear energy has had a tough run. Condemned by environmental activists as a disaster waiting to happen, rejected by local governments espousing NIMBY (“not in my backyard”) and derided in energy markets as too expensive, nuclear power plants were gradually aging out of the consumer energy grid. What a difference a year makes. Russia’s invasion of Ukraine created natural gas shortages that affected industry and energy markets in Europe. The passage of the Inflation Reduction Act by President Joe Biden created tax breaks for nuclear power in the US. The development of small modular reactors created an attractive market for countries, such as South Korea, that build plants for export. Nuclear power is back in the energy mix and in the discussion about the energy transition to a low-carbon economy.

S&P Global Commodity Insights published a two-part episode on nuclear power for its “Platts Future Energy” podcast. In the first episode, called “The state of nuclear energy,” and in the second, called “The future of nuclear energy,” experts from S&P Global discuss the global state of nuclear infrastructure and markets in 2023 and beyond as nuclear plants age and countries expand their use of the energy source.

In the US, the Inflation Reduction Act has changed the cost profile for nuclear power and lengthened the life of existing plants. Many plants in the US were reaching the end of their planned 40-year lifespan, but the tax incentives covered in the new legislation prompted many energy providers to apply to extend the lifespan of their nuclear plants to 60 years and even 80 years. The extension of the tax credits, from 2024 to 2032, has given operators and investors consistent long-term economic signals that support existing nuclear facilities.

In Europe and parts of Asia, shortages of natural gas supplies have led to a reexamination of nuclear power, particularly for industrial applications. France is performing maintenance on its extensive fleet of nuclear reactors to become a net energy exporter in Europe. However, maintenance activity has been delayed by ongoing strikes and civil unrest. Germany, where nuclear power has historically been politically unpopular, chose last year to extend the life of some nuclear plants slated for retirement, although the country’s three remaining reactors are still expected to close this month. Japan also reversed direction on nuclear energy, despite the Fukushima Dai-ichi disaster in March 2011.

New plant development is also underway in many countries, with China and, to a lesser extent, India leading the way. However, many of today’s plants look very different from the large-scale reactors of the past. Small modular reactors are being considered for consumer and industrial uses. The advantage of these reactors is they can be constructed in a modular way on existing brownfield sites. 

“Over the course of the 1970s and ’80s, nuclear reactors got ginormous,” Mason Lester, senior research analyst of North America power and renewables at S&P Global Commodity Insights, pointed out on the “Platts Future Energy” podcast. “And what happened was the financial risk to build these projects just grew and grew. This is a bit of a reset. These new designs are smaller. They can be connected to the grid easier. And they can be built in more of a factory setting. So, it’s building an airplane instead of an airport.”

Today is Thursday, April 20, 2023, and here is today’s essential intelligence.

Written by Nathan Hunt.


Emerging Markets Monthly Highlights: Some Bright Spots, Tough Crosscurrents

S&P Global Ratings slightly upgraded its projections and now expects average growth across emerging markets (EMs) to reach 4.3% in 2023 (up from 4.0% in our November forecast), mostly given improved forecasts for China and large LatAm economies, according to a report published titled "Emerging Market Monthly Highlights: Some Bright Spots, Tough Crosscurrents".

—Read the report from S&P Global Ratings

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Capital Markets

Congress Targets Bank Regulation, Deposit Insurance Limits In Wake Of Failures

Efforts by Democrats in the U.S. Congress to tackle controversial issues tied to recent bank failures will likely be thwarted by the Republican-controlled House. Democrats are looking to raise the Federal Deposit Insurance Corp.'s deposit insurance limit, as well as return capital, liquidity and stress-testing requirements to a higher standard for regional banks. However, those efforts will likely be met with stiff opposition by Republicans in the lower chamber, leaving it to the regulatory agencies to make major overhauls where they can, industry observers told S&P Global Market Intelligence.

—Read the article from S&P Global Market Intelligence

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Global Trade

Iron Ore Prices To Maintain Firm Footing Through Q2 Peak Demand Season

This report is part of the S&P Global Commodity Insights' Metals Trade Review series, where it digs through datasets and digest some of the key trends in iron ore, metallurgical coal, copper, alumina, cobalt, lithium and steel and scrap. It also explores what the next few months could bring, from supply and demand shifts, to new arbitrages and to quality spread fluctuations.

—Read the article from S&P Global Commodity Insights

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At Least 20 Hubs Submitted Final Applications For U.S. Hydrogen Hub Funding

At least 20 groups from across the U.S. have submitted final applications to the Department of Energy hoping to receive up to $1.25 billion in federal funding and become one of six to 10 clean hydrogen hubs, according to a survey conducted by S&P Global Commodity Insights. Following the DOE's April 7 application deadline, the agency declined to reveal any information on the applicant field — neither the identities of the groups that had submitted applications by the deadline nor the total number of applications received.

—Read the article from S&P Global Commodity Insights

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Energy & Commodities

Gas, Coal Demand In Focus As India Issues Heat Wave Warning

A harsh summer season and above normal maximum temperatures in parts of India has triggered expectations of increased fuel consumption with gas, coal and LNG likely to receive a boost to avert power outages, market sources told S&P Global Commodity Insights. The Indian Meteorological Department, or IMD, in a statement April 17 warned of heat wave conditions over East India were likely to continue for the next few days.

—Read the article from S&P Global Commodity Insights

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Technology & Media

U.K. Warns Of Growing Russian Cyber Threat, Europe's Energy Infrastructure On High Alert

Russia-aligned groups have stepped up the intensity and volume of cyberattacks aimed at disrupting and destroying critical infrastructure, a senior U.K. politician warned April 19, urging companies to bolster their cyber security and take action "to defend themselves and the country."

"These are the companies in charge of keeping our country running, of keeping the lights on... Our shared prosperity depends on them taking their own security seriously," the U.K.'s Secretary of State in the Cabinet Office, Oliver Dowden, said in a speech to the CYBERUK 2023 event April 19. "Disclosing this threat is not something we do lightly... These adversaries are ideologically motivated, rather than financially motivated."

—Read the article from S&P Global Commodity Insights

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