The power sector is the key to the clean energy transition. It is the single largest source of global emissions because most electricity is generated from fossil fuels. By significantly expanding the amount of electricity produced from low-carbon sources, we can help to reduce emissions not only from power generation, but also from sectors like transport, where low-carbon electricity can now fuel cars, trucks and buses.
This is a major undertaking. Low-carbon electricity generation will need to triple by 2040 to put the world on track to reach energy and climate goals. That is the equivalent of adding Japan’s entire power system to the global grid every year. It is very difficult to see how this can be done without a considerable contribution from nuclear power.
Nuclear power generated a near-record amount of electricity in 2019, second only to 2006. But the nuclear power industry risks going into significant decline in the absence of further investment in new nuclear power plants and extending the lifetimes of existing ones.
Today, nuclear power plants generate 10% of the world’s electricity. But they produce almost a third of all low-carbon electricity. The steady flow of power they produce is vital for ensuring reliable energy supplies in many countries. That became clear during the recent lockdowns, when nuclear and renewables were the most resilient sources of power generation globally. No nuclear power plants had to shut down because of Covid-19.
Some nuclear projects in Europe and North America, where 20% of electricity comes from nuclear, have been plagued by financial and project management difficulties. But China, India and the United Arab Emirates are among countries with successful new-build programs. In some countries, nuclear power plants that could have operated for years to come were shut down because of policy decisions by governments or unfavorable market conditions. In many of those cases, fossil fuels filled a considerable part of the gap in the power supply, increasing the emissions challenge we now face.
Some countries have made the sovereign choice to refrain from using nuclear power. However, countries that envisage a role for nuclear in their clean-energy mix account for a large proportion of global energy use and emissions. For the governments of these countries, we recommend three main priorities:
Preserve: The reactor fleet in countries that were early adopters of nuclear power is aging, but the lifetimes of most reactors can be extended to 60 years, safely and cost effectively. Doing so would provide valuable time for scaling up new low-carbon electricity projects. Unfortunately, there is no guarantee that these lifetime extensions will happen. This is because regulations in many countries do not put a price on the value that clean energy technologies, including nuclear, provide in terms of both low-carbon power and electricity security.
Renew: Even with lifetime extensions for existing nuclear plants, new ones will need to be built. The most recent designs have superior operational and safety features, but they require major upfront investment that takes years to bear fruit. Governments could proactively support the financing of these high initial costs through long-term contracts, capital guarantees and even direct investment. Without jeopardizing safety, they should make sure that licensing procedures do not lead to unnecessary delays.
Innovate: New nuclear power technologies, such as small modular reactors and advanced large reactors, offer operational and safety advantages, require less upfront investment, and will be easier to integrate into electricity systems. The private sector is interested in these technologies, but government policies will be crucial for their development. While the main purpose of nuclear is power generation, the new technologies could enable it to play a wider role in clean energy transitions, such as producing low-carbon hydrogen for steel production, shipping and other industries.
Today’s historically low interest rates provide a unique opportunity for funding investment in nuclear power and other clean energy technologies. This opportunity should not be missed.
Nuclear power has a clear role to play in reducing global emissions. Challenges…