While momentum is gathering in the nuclear energy sector, with the growth of policies, projects and tech advancements, there are critical challenges to be overcome if this clean energy source is to reach its full potential.
This was highlighted in the latest report published by the International Energy Agency, The Path to a New Era for Nuclear Energy.
“It’s clear today that the strong comeback for nuclear energy that the IEA predicted several years ago is well underway, with nuclear set to generate a record level of electricity in 2025,” said IEA executive director Fatih Birol. “In addition to this, more than 70GW of new nuclear capacity is under construction globally, one of the highest levels in the last 30 years, and more than 40 countries around the world have plans to expand nuclear’s role in their energy systems.”
According to the IEA’s report, the growth of nuclear is driven by the increased demand for electricity, as electrification strategies gear up and data centers and artificial intelligence requirements rise. To meet the increasing power requirements, many tech giants have signed power purchase agreements with nuclear developers, a noteworthy trend states the report.
Nuclear hotspots
The IEA’s report highlights that the global nuclear map is changing. In the past, nuclear power plants were built mainly in developed economies such as the US, Europe and Japan.
These days, Russia and China are dominating in terms of project construction and technology development. Of the 52 reactors that have started construction worldwide since 2017, 25 are of Chinese design and another 23 are of Russian design.
Said Birol: “In five years, China will overtake Europe and the US and will be the number one nuclear power in the world – this is important to note.”
And Russia is leading in more than project builds. The report also emphasizes that the production and enrichment of uranium is concentrated in specific regions, namely Russia, which could pose a risk to the development of the sector evenly across the globe.
“Today, more than 99% of the enrichment capacity takes place in four supplier countries, with Russia accounting for 40% of global capacity, the single largest share,” Dr Birol said. “Highly concentrated markets for nuclear technologies, as well as for uranium production and enrichment, represent a risk factor for the future and underscore the need for greater diversity in supply chains.”
Keisuke Sadamori, director of energy markets and security for the IEA, added in a press briefing: “France is now dependent on Russian uranium, it’s an important issue that requires attention. Efforts are ongoing for investing in this area to expand enrichment capacity.”
Nuclear energy innovation and investment
One of the key innovations taking the sector by storm is small modular reactors or SMRs, a topic that received a lot of attention in the IEA’s report. Its modular, more standardized design, means that projects can be built more quickly, at reduced cost and close to the point of need making it a viable solution, especially for emerging economies.
With the right support, SMR installations could reach 80GW by 2040, accounting for 10% of overall nuclear capacity globally.
Added Birol: “SMRs in particular offer exciting growth potential. However, governments and industry must still overcome some significant hurdles on the path to a new era for nuclear energy, starting with delivering new projects on time and on budget – but also in terms of financing and supply chains.”
To achieve the speed and scale of SMR adoption required, the IEA stressed that the industry will need to bring down costs to make it more competitive with large-scale hydro and offshore wind power.
According to Birol, while the IEA paints a less rosy picture than SMR developers, they believe SMRs will be commercially operational in the 2030s, with cost parity with offshore wind and large-scale hydro achievable by 2040.
The success of a new nuclear energy era will depend on whether the large-scale infrastructure requirements can be realized. This, in turn, will depend largely on whether the right amount of investment can be unleashed.
The report notes that annual investment would need to double to $120 billion already by 2030. Public and private capital will be required to drive sector development and predictable future cash flows will be critical to attract this investment. Incentives will also help to attract investment and stable regulatory frameworks will provide the confidence needed for private sector commitment.
Originally published by Pamela Largue in Power Engineering International.
