Nuclear Power- Global Prospects

Despite its economic problems, construction delays and cost overshoots, the prospect for nuclear power have been talked up of late. It is being portrayed as a way to respond to climate change and ensure continued energy security in a world where energy demand continues to rise, the use of fossil fuels is increasingly reduced and the use of variable renewables increases. The global lobby group, the World Nuclear Association, says that nuclear generation globally will grow by 2.6% annually, reaching 615 GWe by 2040, up from 394 GW now. Indeed, its upper scenario sees nuclear capacity growing faster, to 839 GWe in 2040. Even under the Lower Scenario, a steady increase is seen over the entire reporting period. 

That is all very optimistic judging by the views presented in the latest edition of the independent World Nuclear Industry Status Report, which assesses the status and trends of the international nuclear industry. It reports that, in 2020, nuclear power generation output  plunged by around 100 TWh, while net nuclear capacity additions (new startups minus closures), declined to 0.4 GW- compared to a net rise of over 150 GW for renewables.  It also didn’t see things improving much. Small Modular Reactors (SMRs) were so far unavailable commercially and would not be for another 10-15 years, ‘if ever’. So overall WNISR says ‘nuclear is irrelevant in today’s electricity capacity new-build market’.

By contrast, non-hydro renewables, mainly wind, solar and biomass, out-performed nuclear plants in electricity generation on a global scale. Hydro alone has been generating more power than nuclear for most of the past three decades. And now, for the first time, non-hydro renewables generated more power in the European Union than nuclear, while renewables, including hydro, generated more power than all fossil fuels combined.

WNISR notes that the IEA assumes that nuclear will maintain its share of the global power market at about 10%, but says ‘this would require an increase in output (from 2,698 to 5,497 TWh) due to the overall growth in energy demand and the continued electrification of the transport and heating sector. Given the developments of nuclear power over the past 30 years, with only very limited increases in use - in 1990 nuclear produced about 2,000 TWh and 2,553 TWh in 2020 - it would require a sea-change in the fortunes of the technology. Rather, there is growing recognition that even with a rapid increase in the global use of electricity, renewables, primarily solar and wind, will do the “heavy lifting”.’ 

That does seem likely to be the way ahead. However, it has been a long, hard slog for renewables, with breakthrough years being 2015 and 2016 when wind and then PV, separately, overtook nuclear in capacity terms.  Crucially, they have now more less both separately also equaled it in output terms. If you add in the world’s 1.2 TW of hydro and also biomass, then of course renewables wipe nuclear out completely. WNISR leaves those two out in most of its comparisons, presumably on the view that they can have negative eco-impacts. But of course nuclear can also have bad impacts, as WNISR’s sub-reports on Fukushima and Chernobyl indicate.

What next? 

Overall it seems clear that renewables are beating nuclear hands down, mainly on the basis of cost. Views differ, but, for some, it’s hard to find reasons for much enthusiasm for new nuclear, certainly for large plants. Some enthusiasts hope Small Modular Reactors (SMRs) will be more economic, but as yet that’s just speculation for maybe 10 or 15 years ahead, whereas renewable costs are mostly lower, for wind and PV especially, and are still falling fast, in the here and now.  

Some look to nuclear playing an ancillary role, backing up variable renewables, but arguably it is not well suited to that. Certainly, large inflexible nuclear plants are not what is now needed. Whether SMR’s can find a local role for power balancing, or perhaps hydrogen or heat supply, remains to be seen. SMR programmes have been backed by some governments, for example in the US, Canada and the UK, and some quite exotic designs have been proposed with private sector backing, but it will be a while before test projects emerge, even for the more conventional mini-PWR systems.

While there is still strong support for conventional nuclear in some countries, notably of late the UK and France, and also Russia, it often gets a bad press globally, with the influential international journal Foreign Affairs publishing a review saying ‘Nuclear energy will not be the solution to Climate Change’. Indeed, Forbes has carried what’s almost an obituary, saying ‘lets leave nuclear in the past’. That may be overstating it. There’s life in nuclear yet! Although there is also a sense of decline in parts of it, with, in some cases, only waste management and decommissioning being left as a sinecure. 

However, whether contracting or expanding, there is always a lot of money involved, and, judging by a new section in this years WNISR, looking at the prevalence of crime in the industry, the nuclear sector has had its fair share of corporate and financial corruption and fraud. It says ‘huge contract size and multiple layers of subcontractors make the sector attractive for people with malicious intentions’ and it reports on cases of ‘bribery and corruption, counterfeit and fraud in manufacturing and quality control’, the latter being particularly sensitive given the safety risks involved with nuclear plants and wastes. While there are obviously cases of fraud and corruption in other sectors with large infrastructure investments, WNISR suggest that ‘in the past decade, there has been growing evidence of criminality in the nuclear industry’. As well as cases of sabotage via internal and external action. Not a happy thought.

Regardless, large amounts of financing support still seems to be available in some countries. The recent UK budget announced ‘up to £1.7 billion of direct government funding to enable a large-scale nuclear project to reach a final investment decision this parliament, subject to value for money & approvals’, and it noted that ‘the government is in active negotiations with EDF over the Sizewell C project.’ £1.7bn is about 8.5% of its total likely cost. Much more would be needed just to replace China’s proposed stake in the full project. The government seem to favour the RAB approach, putting a pre-construction surcharge on existing electricity consumers’ bills to pay for building the plant.  Consumers may not be so happy with that….