20 Oct (NucNet): Renewable energy sources would have to increase at a level “hard to believe” to compensate fully for the use of nuclear energy in the fight against climate change, David Shropshire, head of the International Atomic Energy Agency’s planning and economic studies section said today.
Speaking to the press after the launch of the latest edition of the IAEA’s ‘Climate Change and Nuclear Power’ report, Mr Shropshire said the world needs to use “what works now” as opposed to investing huge amounts of money into “extreme” energy efficiency or new renewables infrastructure.
The report, updated every year, says nuclear power is economically competitive. Recent assessments indicate that the levelised cost of electricity (LCOE) from nuclear, ranging from $26-64 per megawatt hour, is less than that of coal ($65-95 per MW/h) and gas ($61-133 per MW/h) at a three percent discount rate. At a seven percent discount rate, coal and nuclear sources largely overlap at $75-100 per MW/h.
However, Mr Shropshire said upfront investment costs remain the “big challenge” for nuclear.
The levelised cost of electricity is the long-term price electricity produced by the nuclear plant will have to be sold at in order for the investor to cover all costs. The discount rate refers to the expected rate of return foregone by bypassing other potential investments. In other words, it is the rate of return investors could potentially earn in financial markets.
In terms of greenhouse gas emissions, since 1970 the use of nuclear energy avoided more than 65 gigatonnes of CO2 emissions, the report says. Greenhouse gas emissions from nuclear plants are negligible, and nuclear power, together with hydropower and wind-based electricity, is among the lowest CO2 emitters when emissions over the entire lifecycle of a facility are considered.
The report puts forward two scenarios for the future of nuclear energy. The first is to keep the world’s current nuclear generating capacity of about 379 GW stable until 2050. This will mean rebuilding a large portion of the existing reactor fleet because of plant retirements.
The second scenario sees a two-fold increase in capacity up to about 800 GW by 2040, meaning the construction of 10 to 20 reactors per year. This would require government policies and incentives to pay for the high capital costs, Mr Shropshire said.
In both cases there is a need to accelerate the rate of capacity growth over current levels, Mr Shropshire said.
Asked about the role of developing nations in the development of nuclear energy, Mr Shropshire said over 30 “newcomers” have expressed an interest in developing nuclear energy to the IAEA, even after the March 2011 Fukushima-Daiichi accident. Many developing countries are attracted by nuclear energy because of energy security and its low-carbon attributes, he said.
Mr Shropshire said small nuclear reactors (SMRs) are a good option for developing nations, but it will take at least another decade before they can be deployed.
Speaking at the same media briefing, Bertrand Magne, an energy economist working for the IAEA, said liberalised markets tend to be detrimental to nuclear. Growth for the next decade is expected to be in Asia where markets are heavily regulated, he said.
He said a set of policies could be implemented in order to support nuclear.
The report is online: http://bit.ly/1PE6pez
