By Cary Springfield, International Banker
On December 2, at the United Nations Climate Change Conference in Dubai, the United Arab Emirates (commonly known as COP28), 22 nations signed the Declaration to Triple Nuclear Energy, pledging to increase nuclear-generation capacity threefold by 2050 from 2020 levels. It represents a landmark moment for nuclear energy as it continues its dramatic renaissance after experiencing decades of being shunned in favour of other energy sources. As the world’s need for clean energy intensifies, and the West seeks to wean itself off of Russian uranium exports and compete with Moscow and Beijing as a source of nuclear capacity, the nuclear revival is projected to gather steam over the coming years.
The International Energy Agency (IEA) predicted in January that by 2025, nuclear-power generation would “reach an all-time high globally as output from France climbs, several plants in Japan come back online, and new reactors begin commercial operations in many markets, including in China, India, Korea and Europe.” Indeed, the Declaration confirms the signatories’ commitments to support the development and construction of nuclear reactors “such as small modular [reactors] [SMRs] and other advanced reactors for power generation as well as wider industrial applications for decarbonisation, such as for hydrogen or synthetic fuels production”.
So, why the improved outlook? A handful of factors are chiefly responsible, none more so than nuclear power’s growing reputation as a clean and reliable energy source. “No other source, renewable or otherwise, contributes as much to meeting US energy demand without emissions as nuclear,” according to the Nuclear Energy Institute (NEI), a United States-based trade association for the industry. “Every year, nuclear-generated electricity saves our atmosphere from more than 470 million metric tons of carbon dioxide emissions that would otherwise come from fossil fuels. That’s the same as taking nearly 100 million passenger vehicles off the road.”
Indeed, the U.S. Department of Energy (DOE) hailed the COP28 Declaration because it “recognizes the key role of nuclear energy in achieving global net-zero greenhouse gas emissions by 2050 and keeping the 1.5-degree goal within reach”. As such, the US has emerged as one of the most fervent champions of SMRs (small modular reactors) as the future of nuclear, thanks largely to their smaller scale and affordability compared to traditional, large-scale reactors. Although nuclear power accounts for around 18 percent of US power generation today, interest in the sector has waned considerably in recent decades, with just three new reactors coming online since 1996 and costing tens of billions of dollars to build. Today, however, US start-ups are exploring SMR technology to enable new reactors to be built at a fraction of this cost.
Underscoring this resurgent support in the United States for nuclear power, moreover, the Atomic Energy Advancement Act was comfortably passed in the lower chamber of the U.S. Congress in late February. The bill seeks to “advance the benefits of nuclear energy by enabling efficient, timely, and predictable licensing, regulation, and deployment of nuclear energy technologies, and for other purposes”. If passed, it will require the national nuclear-industry watchdog, the Nuclear Regulatory Commission (NRC), to streamline the process for approving new reactors, lower application fees for reactor licences, incentivise nuclear-plant development at locations of retired coal plants and encourage the development of new types of reactors—again, the exploration of SMR technology is supported here.
The bill has received strong bipartisan favour, with Democrats championing nuclear energy as a clean-energy source that can do much to lower climate risks and Republicans focusing on nuclear power as a robust source of economic growth and energy security. “Tackling the climate crisis means we must modernize our approach to all clean energy sources, including nuclear,” according to Rep. Diana DeGette (D-CO), who co-sponsored the bill. “From enhancing our energy supply chain to recruiting a highly trained and skilled workforce, this bill makes critical updates to improve safety and ensure our nuclear regulations are up to date, pushing us closer to a carbon-free energy future.”
Asia and Europe are similarly demonstrating their own lofty nuclear ambitions as a wave of new reactors continues to be built across the globe. According to figures to March from the World Nuclear Association, about 60 reactors were under construction globally, most in Asia, while a further 110 were planned. And despite nuclear energy experiencing a massive reputational blow, as well as more than a decade of significant underinvestment, due to Japan’s 2011 Fukushima disaster—which saw a devastating earthquake and tsunami crash into the Fukushima Daiichi nuclear power plant and spawn the worst nuclear-related catastrophe since Chernobyl in 1986—Japan, one of the 22 signatories to sign the Declaration to Triple Nuclear Energy at COP28, is seeking to return to nuclear energy.
That said, Tokyo faces a steep uphill battle to realise such aspirations, not least due to lacklustre public support for the strategy and severe supply constraints. “Japan’s fleet of commercial nuclear reactors, once the third largest in the world at 54 units, has diminished to 33 plus two units currently under construction. Restarting these 35 reactors would barely be enough to meet the government’s 2030 targets,” Florentine Koppenborg, author of the book Japan’s Nuclear Disaster and the Politics of Safety Governance, wrote in an article for The Diplomat on March 8. “However, only 27 reactors are undergoing the safety reviews required for a restart permit. If successful, they can provide about 14 percent of Japan’s electricity mix by 2030, far from the government’s goals.”
Nonetheless, as memories of Fukushima fade and the need for carbon-free energy becomes critical, nuclear energy’s credibility will continue to grow. As such, it could play an increasing role in meeting the world’s growing energy demands whilst combatting the climate threat. “Climate change is a big driver, but so is [the] security of [the] energy supply,” the International Atomic Energy Agency’s (IAEA’s) director general, Rafael Mariano Grossi, stated on October 9. “Many countries are extending the lifetime of their existing reactors, considering or launching construction of advanced reactor designs and looking into small modular reactors, including for applications beyond the production of electricity.”
The nuclear resurgence can also be partly explained as a response to rising geopolitical tensions among the world’s major powers. In particular, the US-led West is now seeking to lower its reliance on imports of Russian uranium dramatically. While the war in Ukraine has seen a substantial number of economic sanctions imposed on Russian oil and gas imports, a lack of viable alternatives to Russian uranium has meant that sanctions on Russia’s nuclear exports have been far lighter. Indeed, with European Union (EU) countries such as the Czech Republic and Slovakia continuing to service their Soviet-era plants with Russian uranium, the Bellona Foundation recently found that a more than twofold increase in imports of fresh Russian nuclear fuel to EU countries was recorded in 2023. “If EU countries paid a total of €280 million for Russian nuclear fuel in 2022, that more than doubled to €686 million for last year,” the think tank’s analysis published on March 15 found. “In physical terms, this represents an increase from 314 tons of nuclear fuel to 573 tons.”
With such concerns in mind, Western countries such as the United Kingdom have become rather explicit about their intentions for their nuclear industries over the coming decades. “As part of a massive investment in home-produced clean energy, nuclear will offer the reliable, resilient, and low-carbon power we need to reach net zero by 2050, and ensure our energy security, so we’re never dependent on the likes of Putin again,” Claire Coutinho, the UK’s secretary of state for energy security and net zero, wrote in the “Civil Nuclear: Roadmap to 2050”, published in January. “In the UK, we have set an ambition for up to 24 Gigawatts (GW) of nuclear capacity by 2050, which would cover up to a quarter of the country’s projected electricity demand.”
Such targets bode well for the future of nuclear-power generation. According to an analysis published in December 2023 by S&P Global Commodity Insights, global nuclear capacity will grow by 58 percent by 2050, with the total installed capacity of around 375 gigawatts (GW) in 2020 expected to rise to 458 GW in 2030, 549 GW in 2040 and 631 GW in 2050. China and the US will make up more than half of the global total by then, S&P also noted. The IAEA’s nuclear-power outlook, meanwhile, sees installed nuclear capacity more than doubling by 2050 to 890 GW in its “high case” projection, while in its “low case,” capacity will increase to 458 GW.