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Can Nuclear Power Charge Forward Amid Ample Competition?

Heidi Vella

Nuclear power generation is decreasing globally due to ongoing market challenges and stiff competition. What can be done to help revive the industry?

Nuclear power generation is cost-effective in the long term. But due to the high capital required for new projects, the sector is struggling to win investment in energy markets, where low-priced natural gas and renewable energy are its biggest competitors.

As such, total global electricity generation from nuclear decreased for the tenth year in a row to almost 11 percent in 2015, according to a report published in 2017 by the International Atomic Energy Agency (IAEA).

Despite this fall, installed capacity reached the highest level ever reported at the end of 2016, with activity picking up in Asia. The sector, however, faces many challenges going forward. Considering the energy needs of developing and emerging markets and a drive for carbon-free energy sources, especially in China, is it possible for nuclear power to keep up?

What Are Nuclear's Big Challenges?

In the previously mentioned report, the IAEA outlines high and low future demand scenarios for global nuclear power capacity from the present until 2050. In the low-demand scenario, capacity decreases by 12 percent by 2030 and a further 15 percent by 2040 before recovering to present levels in 2050.

If current market and regulatory trends continue, and if not all national targets are met, the IAEA states that it is "conservative but plausible" that its low-demand energy scenario will occur.

The agency says that, most likely, capacity will fall in North America and northern, western, and southern Europe.

In Europe, like America, there is a downward trend for nuclear, with Germany, Belgium, Spain and Switzerland looking to phase out nuclear completely. France is working to decrease its share, currently at 75 percent of national electricity generation, to 50 percent in the mid-2020s, according to Reuters.

A major problem for the sector is that Western liberalized energy markets tend to favor investment in gas-fired power generation, because it's less expensive and quicker to build. Furthermore, subsidies and other support mechanisms for renewables have significantly boosted this industry. The same has not been provided to nuclear, putting it at a disadvantage.

Furthermore, more than half of the 447 reactors currently in operation globally are over 30 years old; in the US, this is the average age of a reactor. At the beginning of January, the US Federal Energy Regulatory Commission (FERC) rejected a plan to boost nuclear plants and help them avoid closure.

In September 2017, addressing these problems, the World Nuclear Association (WNA) issued a call to action to halt the decline of nuclear. In the statement, the WNA calls on governments, expert bodies, and the nuclear industry to do more to ensure that the sector can make "the full contribution that society requires to meet its future clean-energy needs."

New Capacity in the Asian Market

According to the IAEA report, of the 60 new reactors under construction worldwide, 39 are in Asia. The region has accounted for 85 of the 105 construction starts since 2000 and 63 of the 78 new reactors connected to the grid. Could Asia be a new nuclear hub?

To meet the IAEA's high-demand scenario, where power generation from nuclear would increase from 2016 levels by 42 percent in 2030, 83 percent in 2040, and 123 percent in 2050, there will need to be significant activity in the Asian nuclear market.

The IAEA predicts significant nuclear energy growth in central and eastern Asia, expecting capacity to undergo an increase of 43 percent by 2050, according to the IAEA.

Some larger developing countries, including China and India, already include nuclear in their generation mix. Their regulated markets and strong energy policies could mean that installing new nuclear capacity will be easier than in some developed states.

Furthermore, China's plan to create a carbon price would boost the long-term affordability of nuclear power, especially if the scheme is a catalyst for an international carbon-trading scheme. China is also looking to build floating nuclear reactors, with the first to come online as early as 2019.

There is an expectation that significant population growth in developing countries will be a factor in boosting electricity capacity needs. However, for developing nations wanting to build nuclear power plants, finance and local expertise do pose a problem.

"There is a need to build up national expertise, both in nuclear plant construction and operation, but also to establish national regulatory bodies," Dr. Jonathan Cobb, senior communication manager at the WNA, told Transform. "Universities need to provide suitable courses to help develop graduates with the right skills to work in the nuclear industry."

Nevertheless, Dr. Cobb believes the IAEA's high-demand scenario is achievable and would require build rates no higher than those recorded in the mid-1980s. To replicate this, however, immediate action must be taken. This is because the median construction time for reactors coming online in 2016 was 74 months; so to have reactors in 2025, building needs to start now.

How to Boost Nuclear's Prospects

The WNA wants nuclear to account for 25 percent of global energy supply by 2050 — this means the construction of 1,000 GW of new capacity. Presently, there are 447 operational reactors in 30 countries, and 60 are under construction in 15 countries

What can be done now to support more generation of this carbon-free energy source in the future?

For starters, when looking to build new nuclear capacity, choosing the most cost-efficient technology on the market and investing in a holistic, predictive maintenance approach can keep operating costs down and boost a plant's possibility of being approved for operational regulatory extensions near its end of life.

Furthermore, the director general of the WNA, Agneta Rising, has said there are three key areas that need addressing to shore up the future of nuclear. These are:

  • An effective safety paradigm, where the environmental benefits of nuclear are valued when compared with other energy sources
  • Harmonized regulatory processes to provide a more internationally consistent, efficient, and predictable nuclear licensing regime, allowing for standardized solutions
  • A level playing field in energy markets that utilizes existing low-carbon energy resources already in place and drives investment in additional clean-energy resources

"Without these changes, the world will not be able to take full advantage of the contribution that nuclear energy should make to address the energy transition to a low-carbon economy," Rising said.

She also said that meeting the WNA's 2050 target would not be that difficult, because it would only require annual nuclear new-build rates to increase by three to four times the current levels. This is "much lower than the scale of expansion needed for other low-carbon generation options," she said, adding: "However, the main challenges are not in production, but in securing policy support."

Although changes need to happen for steady future nuclear growth, even in the IAEA's low-demand scenario some 320 GW of new capacity is expected to be installed by 2050 (not necessarily in the same regions). This will make up for some of the loss caused by retiring reactors and show that there is definitely a future for nuclear in the global energy mix.

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