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Nuclear Power

Not on track
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In this report

In 2020, 6 GW of additional nuclear capacity were connected to the grid and 5.4 GW were permanently shut down, bringing global capacity to 415 GW. New projects were launched (~4.8 GW), and refurbishments are under way in many countries to ensure the long-term operations of the existing fleet. Nevertheless, while nuclear energy remains the world’s second most important low-carbon source of electricity, new nuclear construction is not on track with the Net Zero Emissions by 2050 Scenario.
According to current trends and policy targets, nuclear capacity in 2040 will amount to 582 GW – well below the level of 730 GW required in the Net Zero Emissions by 2050 Scenario. This gap widens even further after 2040, so long-term operation of the existing nuclear fleet and a near-doubling of the annual rate of capacity additions are required. While some of this additional nuclear capacity will not come online until the late 2030s, policy decisions are required now to put nuclear back on track.

Global nuclear power capacity in the Net Zero Scenario, 2005-2050

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Tracking progress

The 6 GW of new nuclear capacity brought online in 2020 was on a par with 2019 additions, but it was a sharp drop from 2018, when 11.2 GW were connected to the grid – the highest capacity additions since 1989.

China and Russia continue to lead in terms of new grid connections and construction launches. In fact, 22% of the nuclear reactors under construction globally are in China. 

Average yearly new nuclear capacity of 20 GW is required between 2020 and 2050 to meet Net Zero goals. This rate of construction is comparable with the pre-Fukushima period when, in 2010, construction began on 17 GW of nuclear capacity. Although 59 GW of new nuclear capacity were under construction at the end of 2020, the rate at which new projects are completed remains nearly half that required under the Net Zero Scenario, with the gap widening even further after 2035.

To accelerate new nuclear expansion to meet scenario requirements, timely policy decisions will have to be taken in the early 2020s to support commercial deployment of a range of complementary technologies at various technology readiness levels (TRLs):

  • Early 2020s: large Gen-III nuclear reactors that are reaching design maturity, building on lessons learned from first-of-a-kind projects.
  • Early 2030s: high-TRL small nuclear reactors (SMRs) making progress in licensing and demonstration units. These reactors are expected to provide a range of electricity and non-electricity applications, targeting new markets such as coal replacement and large-scale low-carbon hydrogen production, as well as providing electricity to remote communities.
  • Late 2030s: lower-TRL SMRs and Gen-IV nuclear reactors with a range of innovative reactor systems at the R&D and early demonstration stage. These reactors will be especially useful for decarbonising energy sectors in which emissions are difficult to abate, particularly industrial heat applications. High-temperature gas reactors and heat-pipe SMRs could be introduced for heavy industry applications in the late 2020s/early 2030s, and extensive commercial build-out could then be expected in the late 2030s.

The six nuclear reactors that ceased operations in 2020 were in France (2 units), the United States (2 units), Russia and Sweden (1 unit each), for a total of 5.4 GW. All these plants were more than 40 years old and were retired either because of national policy measures (France) or adverse market conditions combined with a lack of nuclear energy policy clarity (the United States and Sweden).

In the short term, all this low-carbon capacity is expected to be replaced primarily by fossil fuel technologies. In Russia, however, the shutdown of one reactor coincided with the commissioning of a new one at the same site as part of a long-term policy to gradually replace Gen-II RMBK reactors with Gen-III VVER designs.

Nuclear power construction starts and first grid connections, 2007-2020, compared with the Net Zero Scenario

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Only 4.8 GW of construction was launched in 2020, with three reactors in China and one in Turkey. The 58 GW of nuclear capacity under construction were primarily in non-OECD economies (17.4 GW), China (12 GW) and Russia (3.5 GW). The two OECD economies with the most capacity under construction are Korea (5.3 GW) and the United Kingdom (3.3 GW). Out of the 20.8 GW of capacity under construction in the rest of the world, the leading economies are India (4.8 GW) and the United Arab Emirates (4 GW).

Construction in the United Arab Emirates is progressing according to schedule, with the first unit commissioned in 2020. In OECD countries, Hinkley Point C is the largest ongoing new-build project and the first project for the United Kingdom since 1995. The Covid‑19 pandemic had some impact on this large infrastructure project, however, and the first unit will now be commissioned in June 2026 instead of late 2025.

Other new-build projects are in the preparation phase in Argentina, Brazil, Bulgaria, the Czech Republic, Egypt, France, Finland, Hungary, India, Kazakhstan, Poland, Saudi Arabia and Uzbekistan. These are typically large reactor projects (>1 GW) and, judging from current policies and ongoing projects, could amount to new additions of ~55 GW.

China began construction on three new nuclear reactors in 2020, and in the next several years it is expected to launch a number of new projects to reach a total capacity of 110 GW by 2030. This plan capitalises on the commissioning of several Gen-III reactor designs, including the 2020 introduction of the first Hualong One reactor, based on a domestic Gen-III design.

These trends in new nuclear construction in non-OECD economies (particularly China) are expected to continue into the coming decades. As an increasing number of nuclear power plants will have reached 60 years of age in OECD economies by 2040, a gradual shift towards nuclear energy in non-OECD economies can be expected. In fact, the share of installed nuclear capacity in non-OECD economies could increase from 25% in 2020 to nearly 50% by 2040.

Installed nuclear capacity by region in the Net Zero Scenario, 2020-2040

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In addition to new-build projects, refurbishments are ongoing in several countries to extend the service lifetimes of their nuclear fleets.

Canada’s Darlington and Bruce nuclear units in Ontario are undergoing a multi-year, CAD 26 ‑billion refurbishment that will allow the plants to operate well beyond mid-century. This project’s refurbishment activities – as well as the continued operation of these plants – offer significant local economic spillovers and employment opportunities.

In France, the utility EDF is continuing its long-term operation (LTO) programme to extend the lifetime of the French nuclear fleet beyond 40 years. The French Safety Authority issued a generic regulatory approval for the 900‑MWe series in early 2021.

In the United States, 89 of its 94 operating units have been granted a licence to operate for 60 years in total, and eight applications for a second 20-year extension (subsequent licence renewals) have been submitted. Of these eight, four were approved in 2019 and 2020.

Other countries with LTO projects include Armenia, Argentina, Brazil, the Czech Republic, Mexico, Romania, Russia and Ukraine.

The UK Energy White Paper of December 2020 highlights the role of nuclear in the United Kingdom’s 2050 climate neutrality pledge. At least one additional nuclear power plant is to be built by 2024, and support is offered for SMRs and advanced reactors, as well as for nuclear fusion. This policy document describes the complementarities of these nuclear technologies’ deployment timelines and applications, with nuclear capacity rising to 40 GW by 2050.

In 2020, France published its strategies on mid-term energy planning and long-term decarbonisation. The energy planning strategy involves closing all remaining fossil fuel-fired power plants; ensuring the long-term operation of some existing reactors while spreading out the closure of others for smooth decommissioning; and developing renewable energy. Nuclear remains the energy strategy’s backbone at a 50% share of the 2035 power mix, and renewable energy makes up the other half. To rely on nuclear beyond 2035 and retain it as a viable option, in 2020 the French government launched several preliminary studies on the potential construction of six European Power Reactors 2 (EPR2). A final investment decision is expected in 2022.

Canada’s 2020 climate plan provides broad support for nuclear to help the country meet its long-term climate goals, building on the 2018 SMR Roadmap. The federal and provincial governments are endorsing several projects; for instance, in March 2021 the Government of Canada announced funding of CAD 56 million for Moltex Energy to develop SMRs in Atlantic Canada.

The new US administration continues to support nuclear power as a clean energy source, though state-level policies are not all currently aligned with this definition. At the federal level, in 2020 the United States launched its Advanced Reactor Demonstration Program (ARDP) to support the construction of two demonstration advanced reactors that can be operational in five to seven years. The programme is providing a total of USD 160 million in initial funding to X-energy and Natrium. In parallel, Nuscale received its Standard Design Approval from the US Nuclear Regulatory Commission (NRC), for the first light-water SMR to be licensed in the United States. This milestone allows the project to move into the demonstration phase, with the first module to be operational by 2029.

Japan has confirmed its objective to raise the share of nuclear power to 20-22% by 2030 and has stressed the role nuclear will play in meeting the country’s 2050 climate neutrality pledge. However, the process to restart reactors shut down after the Fukushima Daiichi accident remains slow. Nine reactors had returned to operation as of April 2021, and the remaining 14 operable reactors are at various stages of the Nuclear Regulation Authority (NRA) review process. Two additional reactors that were under construction prior to the Fukushima Daiichi accident have been delayed and are yet to be commissioned.

Belgium plans to phase out its seven nuclear power plants by 2025 (representing 50% of the country’s electricity mix) and replace them with new gas-fired power plants. While extending the operations of two of the seven beyond 2025 remains an option, Engie announced in late 2020 that the absence of a policy decision means the company will not invest further in these reactors.

In early 2021, Poland's Council of Ministers approved an energy policy to 2040 (PEP2040), reaffirming its plans to develop 6‑9 GW of nuclear energy as part of a diverse energy portfolio, rendering the country less heavily dependent on coal and imported gas. Poland’s first nuclear power plant could come online in 2033, with another five expected by 2043.

Outside of OECD countries, China’s 13th Five-Year Plan has been the core stimulus of its national nuclear programme, connecting more than 30 GWe of nuclear capacity to the grid in the past decade. This means the country came close to meeting its ambitious target of 58 GW of installed nuclear capacity by the end of 2020. Furthermore, publication of the 14th Five-Year Plan in 2021 has given the country’s domestic nuclear programme new momentum, with six to eight new constructions per year envisioned, and medium-term plans to construct 110 GW by 2030.

In India, new-build activity has been limited in the last few years, but the country aims to construct 21 new nuclear power plants by 2030, relying on both domestic and international technologies. Early in 2021, Unit 3 of the Kakrapar nuclear power plant was connected to the electricity grid. The reactor is based on the country's first domestically designed 700‑MWe pressurised heavy water reactor.

SMRs continue to attract interest around the globe, and are nearing commercial deployment in a number of countries where nuclear generation is well established, such as Canada and the United States, as well as in newcomer countries in Europe, the Middle East, Africa and Southeast Asia. RD&D and investment in SMRs and other advanced reactors are being encouraged through public-private partnerships.

In the United States, the 2021 Infrastructure Bill includes provisions for advanced nuclear reactor demonstration project investments and for a clean electricity standard to leverage and incentivise more efficient use of the country’s existing nuclear fleet.

Meanwhile, SMR design certification by nuclear safety authorities is progressing. In 2020, the US NRC certified NuScale’s design for its 12x60 MWe SMR. Plans to construct the first modules of a new plant in Idaho have advanced, with the manufacturers having been chosen and further support confirmed by the US DOE. In March 2020, Oklo submitted the first combined licence application for an advanced reactor technology to the NRC. Oklo is developing a 1.5 MW micro-reactor to supply energy at remote sites.

The Canadian government released its SMR roadmap in December 2018 and encouraged SMR vendors to take advantage of the opportunities offered to build and demonstrate their technologies. This was followed by the 2020 publication of an SMR Action Plan that lays out the next steps for developing, demonstrating and deploying SMRs for multiple applications at home and abroad. The CNSC (Canada’s federal regulator) is currently reviewing ten SMR designs and received an application to build a micro modular reactor in 2019. Both the federal and provincial governments have announced financial support for several SMR projects.

In August 2019, the CNSC and the US NRC signed a memorandum of co‑operation to collaboratively develop the infrastructure needed to share and evaluate advanced reactor and SMR designs.

In addition, Russia connected its floating nuclear power plant Akademik Lomonosov to the grid in late 2019. In 2021, the country approved plans to build a fleet of floating SMRs to power extractive industries in the Russian Far East. Several other countries such as Argentina, China, France and Korea are also developing SMR technologies.

Newcomer countries such as Poland, Indonesia and Jordan continue to design feasibility studies for the development of high-temperature reactors, the latter two in co‑operation with China. Saudi Arabia is also studying nuclear desalination using SMRs.

The Generation IV International Forum, an international R&D initiative that assembles the most advanced nuclear countries, is strengthening its engagement with various private sector companies, particularly to explore the potential of nuclear heat applications in various industries.

Overall, global investments in nuclear capacity continue to be insufficient, as testified by the small number of new projects being launched. According to the World Energy Outlook, USD 1.18 trillion in investment would be required between 2020 and 2040 to get on track with the SDS – 12% more than under the Stated Policies Scenario (STEPS).

In 2020, investments in nuclear reached USD 37 billion, which is a 5% reduction from 2019 but includes similar proportions of LTO and new-build funding. This demonstrates that LTO investments are attractive despite policy and market uncertainties.

Nuclear policy uncertainty in a number of countries is preventing utilities from making investment decisions. This is partly the result of inconsistencies between stated policy goals – such as climate change mitigation – and policy actions or energy market frameworks.

Forthright recognition of nuclear energy’s valuable attributes and its importance in decarbonising the world’s energy systems would encourage policymakers to explicitly include nuclear in their long-term energy plans and NDCs under the Paris Agreement.

While some countries maintain they can meet decarbonisation objectives while phasing out nuclear (Belgium, Germany, Spain and Switzerland) or reducing its share (France), others continue to recognise the need to foster its use in decarbonisation strategies: China, Russia, India, Argentina, Brazil, Bulgaria, the Czech Republic, Egypt, Finland, Hungary, Poland, Saudi Arabia, the United Arab Emirates, the United Kingdom and Uzbekistan.

In late 2018, the EU long-term energy strategy clearly stated that nuclear power – together with renewables – will form the backbone of the EU power system to reach carbon neutrality by 2050. At the same time, ongoing EU sustainable financing taxonomy discussions highlight the difficulties in establishing science-led policies that recognise the contribution that nuclear energy makes to climate change mitigation and sustainable development goals.

In 2021, the European Commission Joint Research Council (JRC) supported the inclusion of nuclear in the EU taxonomy based on an extensive review of the scientific literature. Including it in future taxonomies is very important to provide nuclear projects access to clean energy financing and to a range of other public funding mechanisms aligned with the EU taxonomy.

Electricity market uncertainty makes it difficult for investors to predict the amount of revenue a nuclear power plant could generate over several decades.

Regulators could reduce this uncertainty by improving electricity market designs to assign an appropriate value to the clean, dispatchable energy nuclear power plants provide. It is particularly important to develop long-term contract schemes to reduce the exposure of long-lived nuclear assets to short-term market risks.

Nowadays, most power plants, regardless of their technology, get most of their revenues from wholesale energy markets. However, additional regulations may be necessary, particularly to reconcile low emissions with affordability and electricity system capacity adequacy in the long term. In fact, there is growing consensus that current electricity markets fail to provide long-term price signals to encourage investment in low-carbon capacity.

Electricity market reforms also need to address the impacts of greater variable renewable source integration and the associated system costs. A considerable proportion of costs for all low-carbon technologies are fixed, while marginal costs are relatively low – a cost structure that is not well suited to withstand the volatility of future electricity markets with large shares of variable renewables. More generally, decarbonising the electricity sector in a cost-effective manner while maintaining a high level of electricity security requires that policymakers recognise and equitably allocate system costs to the responsible technologies. 

Share of long-run generation costs covered by markets in the European Union, 2010-2030

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Building on lessons learnt from recent Gen-III first-of-a-kind projects, policymakers could support rapid construction cost reductions by making timely decisions on new-build projects. Taking these decisions as soon as possible should put nuclear back on the Net Zero track and would also provide considerable economic stimulus in the short term through job creation.

The overall governance of new-build nuclear projects will remain critical for the effective allocation and mitigation of construction and market-related risks. Considering the impact of the cost of capital on the levelised cost, and the positive externalities associated with nuclear power, there is clear rationale for governments to directly or indirectly support financing – especially to address risk perception and build-up capabilities when nuclear programmes are initiated.

Positive externalities include environmental, societal and economic factors. Environmental ones concern contributions to climate change mitigation, the absence of local air pollution (NOx and SOx), and minimal land footprints thanks to nuclear’s high energy density. Meanwhile, societal and economic externalities include job creation, greater innovation and economic growth.

Regulatory approaches that have been employed successfully for other infrastructure projects – such as the Regulatory Asset Base (RAB) model in the United Kingdom – are gaining renewed interest from policymakers to finance future nuclear new-build projects at a lower cost of capital.

Given the positive, long-lasting and deep impacts of a nuclear programme on a country’s economy and electricity system, governments must consider nuclear projects as national infrastructure projects of strategic importance. Nuclear new-build programmes in Korea and France offer prime evidence of the positive long-term impacts a nuclear programme can have on a country’s economy. Furthermore, strategic decisions concerning nuclear energy could be particularly critical in this post-COVID‑19 period as part of long-term strategic growth plans. Strong and clear government leadership is essential to unite various stakeholders, including the public at large.

As illustrated by the UK government’s 2018 Nuclear Sector Deal that aims to reduce the cost of new builds by 30% by 2030, concerted government and industry efforts are necessary. Canada’s recent SMR roadmap and its action plan also provide relevant examples of effective government leadership at both the federal and provincial levels, along with strong industry involvement, to drive technology selection. 

No regional or global licensing framework exists for nuclear power technologies, which means vendors have to repeat the certification process and adapt to national codes and standards in every country, lengthening the duration of projects and raising costs and uncertainty.

More efforts to harmonise regulatory requirements and promote design standardisation are therefore needed. This could be achieved through information- and experience-sharing among regulators, including for the more novel designs, and through more effective global industry initiatives to harmonise engineering standards. It is critical that governments enable these efforts, building on recent bilateral and multilateral initiatives.

The IAEA SMR Regulators’ Forum provides support by enabling discussions among Member States and other stakeholders to share SMR regulatory knowledge and experience. The Forum’s core objectives are to address common safety issues that may challenge regulatory reviews associated with SMRs and to facilitate robust and thorough regulatory decision-making.

Resources
Acknowledgements

Henri Paillère, Head, Planning and Economic Studies Section, IAEA 

This section was authored by the OECD Nuclear Energy Agency, Division of Nuclear Technology Development and Economics (NTE).

Analysis