Twenty countries met at the end of September and committed to nuclear energy as part of the solution to reaching net zero emission targets, the largest shift toward a global accord on the technology in decades.
The ‘Roadmaps to New Nuclear’ conference, organized by the French Ministry for Energy Transition and the OECD-NEA in Paris, led to a joint communique calling for more nuclear power to meet global energy challenges.
“There’s been a pretty dramatic shift,” says Magwood who’s headed the NEA since 2014 following a four-year stint as one of the five Commissioners at the U.S. Nuclear Regulatory Commission (NRC).
The change began following the Paris climate deal in 2015 after countries agreed to submit their climate targets every five years, though Magwood believes talks really gained traction following the 2021 COP26 meet in Glasgow when countries were called on to show their plans for reaching net zero.
“That was clearly a wake-up call for a lot of capitals because … the numbers were not adding up and you were not seeing a convergence to net zero by 2050 by almost anybody, and that became glaringly clear in COP26,” he says.
Emphasis on 2030
Focus changed due to an increased emphasis on 2030 targets, Magwood says, goals he believes many will miss.
Politicians lost the opportunity to refer to the far-off future of 2050, after they had left office and future world-saving technologies had been invented, he says.
Following the 2021 COP26 meet, governments from Brazil, Ghana, Russia, and the United States announced plans to use nuclear to reduce emissions, French President Emmanuel Macron pledged to restart the construction of six new nuclear plants, Britain outlined plans to invest £210 million ($258 million) in small reactors, and the Netherlands announced plans for two new plants.
Since the start of the war in Ukraine, the conversation has evolved from solely mitigating CO2 emissions to energy security.
“Suddenly, you saw how vulnerable the energy infrastructure was to disruption and the reliance that European countries in particular had on imported gas from Russia. This completely changed the conversation internationally,” Magwood says.
“When you put those two pieces together, it really energized this whole nuclear discussion and fortunately for everyone, just as this is happening, we have an industry which is now being propelled forward by a lot of entrepreneurs and new thinking on a wide range of new technologies.”
The ‘Roadmaps to New Nuclear’ communique, and an adjoining communique from nine nuclear OECD-nation nuclear associations, appears to be timed to drum up support for nuclear power ahead of the COP28 meet November 30 in Dubai.
There has been a reluctance by leaders to bring nuclear power to the table as part of the COP talks since some countries’ rigid opposition means even the mention of the technology is enough to disrupt more general talks on climate change mitigation.
COP28, meanwhile, will be different, says Magwood, with conversations on nuclear power placed in greater prominence as part of the event than previous meetings.
“It’s just the reality. If you’re serious about reducing CO2 emissions to net zero by 2050, and if you’re not talking about nuclear, you’re not really having a serious conversation,” he says.
CHART: Nuclear capacity additions, retirements in Net Zero scenario
Key: Blue = G7 Countries; Green = Other Advanced economies; Yellow = China; Purple = Other emerging and developing countries. Source: International Energy Agency Acquire Licensing Rights
Too expensive
In addressing the most common criticism that the technology costs too much, changing attitudes are key.
The cost of financing can be as much as 67% of nuclear power’s levelized cost of electricity, assuming a discount rate of 9% and overnight construction costs of $4,500/kW, according to the NEA-OECD.
Some estimates suggest political and policy risk premium can add as much as two to three percentage points to a project’s discount rate.
In the past, financiers would stick high premiums on projects since they ran a risk of being dumped within one election cycle. Conservatives, often pro-nuclear, would greenlight projects that a left-leaning party, often anti-nuclear, would then mothball.
Lenders are increasingly willing to improve financing terms as parties at both end of the political spectrum embrace nuclear.
“Everyone’s talking about financing … It’s clear that that is the overwhelming issue of concern to everybody that was in the room, industry and ministries alike, was how do we finance it, what are the approaches available to us, and what makes sense to do?” says Magwood.
The current enthusiasm around small modular reactors (SMRs) feeds into these concerns, as a 300 MW SMR, which may cost $5 billion to build and run, is easier to finance than a 6-GW light water reactor (LWR), which needs over $30 billion.
Tripling capacity
The Net Zero Nuclear initiative, with backing from the World Nuclear Association and the International Atomic Energy Agency’s (IAEA’s) Atoms4NetZero, launched a campaign in September calling for global nuclear power capacity to triple by 2050, or the construction of some 40 GW of new nuclear per year.
If countries rise to this challenge, as France did after the 1973 oil crisis and the United States did in the 1970s and 1980s, financing would no longer be a concern as industry moves to building the third- and fourth-of-a-kind reactors in series and so costs come down.
“The bigger challenge then will be making sure that we have a quality supply chain and people who say yes, I can build this pump, yes, I can build this valve … yes, I can deliver quality parts on a consistent basis,” Magwood says.
“If countries are just bound and determined to meet those 2050 targets, I think that would power a very large investment in nuclear and make this within the realm of the possible.”
An increase in nuclear power capacity worldwide would not significantly raise proliferation concerns, he added, as long as participating countries stick to the so-called ‘Gold Standard’, in which a country announces plans to build a nuclear power plant but agrees to forego reprocessing or enrichment plants, essential for weapons-grade uranium.
Once that option was removed from the table, plans for the Barakah nuclear power plant in the United Arab Emirates were embraced by everyone and everyone wanted to help, Magwood says, making the four APR-1400 reactors, with a 5.38 GW capacity, one of the most successful nuclear builds in recent memory.
Recent cost overruns and missed schedules at new plants in the United States and Britain are to be expected, Magwood says.
“Building a nuclear power plant is a skill as much as it is engineering and science and if you haven’t built a nuclear power plant in 30 years, and you’re building your first one, don’t expect it to be easy,” he says.
“We learned that lesson, but I think going forward, it’ll be easier and better.”
Source: Reuters
