Tracking Progress: Nuclear power
In 2016, nuclear power saw the highest capacity additions since 1990 (10 GW gross). New construction continued to fluctuate, with 3.2 GW commencing in 2016, down from 8.8 GW during the previous year, and averaging 8.5 GW over the past ten years. Capacity additions of 20 GW per year are needed to meet the 2DS targets.
Nuclear power accounts for approximately 11% of total electricity production and one-third of electricity from low-carbon sources. While the Paris Agreement is not technology specific, out of the 163 Intended Nationally Determined Contributions (INDCs) submitted by the end of 2016, only ten countries explicitly mentioned nuclear energy in their national strategies. These include countries with ambitious nuclear development programmes (China and India, for example). Premature closure of operational nuclear power plants (NPPs)1 remains a major threat to meeting 2DS targets. A number of reactors in the United States are in jeopardy of shutting down in liberalised markets dominated by low natural gas prices, with nuclear largely excluded from financial incentives to other low-carbon generation technologies. In 2016, a considerable part of French nuclear capacity was offline owing to safety reviews.2
Projected nuclear growth remains strongest in Asia, as China released a new five year plan to more than double its 2015 capacity to 58 GW (net) by 2020, with an additional 30 GW (net) under construction at that time. However, with 31.4 GW (net) in operation at the end of 2016 and 21.5 GW (net) under construction, China will likely miss that target by a year or two. Korea also projects considerable growth – from 23 GW in 2016 to 38 GW by 2029. The Russian Federation (Russia) reduced its projections during 2016, noting that the reductions were to better align with reduced projections of electricity demand. In the United Kingdom, final approvals were given for the Hinkley Point C Contract for Difference after a government review of the entire project, and EDF Energy made the final investment decision in July 2016. Poland delayed a decision on its nuclear programme until mid-2017, citing the need to find a suitable financing model for the country, and Viet Nam abandoned plans to build two reactors due to lower electricity demand and the cost of nuclear technology compared with coal.
In terms of technology, the majority of reactors under construction today are Generation III/III+ designs. The first APR1400 and VVER1200 (Novovoronezh 2 in Russia) were connected to the grid in 2016. Efforts to develop and deploy small modular reactor (SMR) designs continued, with Argentina’s CAREM reactor and Russia’s and China’s floating NPPs. In the United States, NuScale Power submitted the first-ever design certification application for an SMR to the US Nuclear Regulatory Commission. All of these SMRs are 100 megawatts electrical (MWe) or smaller.
According to the most recent Red Book (NEA and IAEA, 2016), gross installed capacity is projected to be 402 GW to 535 GW by 2025; in the 2DS, global nuclear capacity would need to reach 529 GW by that time. Considering currently installed capacity of 413 GW and new capacity under construction of 66 GW, progress towards near-term targets has been positive. With another 20 GW of planned construction in the next three to four years, the remaining gap to the 2025 2DS target would be approximately 30 GW, which could be met if construction starts were sustained at the levels of 2009-10. However, retirements due to phase-out policies in some countries, long-term operation limitations in others or loss of competitiveness against other technologies could offset these gains. Up to 50 GW could be lost by 2025. Without action to address these reductions due to non-technical factors, the capacity will more likely be 70 GW to 90 GW short of the 2025 2DS target, unless annual grid connections double compared with the 2016 rate.
Increasing nuclear capacity deployment could help bridge the 2DS gap and fulfil the recognised potential of nuclear energy to contribute significantly to global decarbonisation. This requires clear and consistent policy support for existing and new capacity, including clean energy incentive schemes for development of nuclear alongside other clean forms of energy. In addition, efforts are needed to reduce the investment risk due to uncertainties, such as licensing and siting processes that have clear requirements and that do not require significant capital expenditure prior to receiving a final approval or decision. Industry must take all actions possible to reduce construction and financing costs in order to maintain economic competitiveness.
Published: 16 May 2017Download Full Report