The Outlook for Nuclear Power postFukushima: Challenges and Opportunities

Dr Ron Cameron Head, Nuclear Development Division OECD Nuclear Energy Agency (NEA)

Rio+20, Brazil, June 2012

Outline of talk
Energy today and in the future The case for nuclear Potential growth scenarios and their implications Impact of Fukushima on growth

UN HDI and electricity use (1997)

Rio+20, Brazil, June 2012

Historical world electricity consumption

TWh
20 000 16 000 Global credit crunch Dot-com bubble burst Asian economic crisis Black Monday stock market crash US recession nd oil price shock 2 st oil price shock 1 End of World War II 1960 1970 1980 1990 2000 2009*

12 000
8 000 4 000

0 1945 1950

Source: IEA World Energy Outlook 2010 Slide Library Energy demand has climbed consistently since 1945. The financial & economic crisis resulted in a drop in electricity demand in 2009 the first fall of any kind since the end of the 2nd World War , but it rebounded in 2010.

Source: WEO 2011

The 450 Scenario illustrates what the 2C goal will require

World energy-related CO2 emissions by scenario

Gt

45

40
35 30

OECD Non-OECD

Current Policies Scenario New Policies Scenario

28% 71% 33% 15 Gt 65% 7 Gt

25 450 Scenario

20 1990

2000

2010

2020

2030

2035

Restricting the greenhouse-gas concentration to 450 ppm would limit temperature increase to 2C, compared with 3.5C in the New Policies Scenario & 6C in the Current Policies Scenario

The door to 2C is closing, but will we be locked-in ?

World energy-related CO2 emissions in the Current Policies and 450 Scenarios and from locked-in infrastructure in 2010 and with delay
50 45 40 35 30 25 20 15 10 5 0 2010 Gt

6C trajectory

2C trajectory Delay until 2017 Delay until 2015 Emissions from existing infrastructure 2015 2020 2025 2030 2035

Without further action, by 2017 all CO2 emissions permitted in the 450 Scenario will be locked-in by existing power plants, factories, buildings, etc.

Delayed CCS or second thoughts on nuclear make 2C even harder

Source: WEO 2011

Cumulative share of abatement relative to the New Policies Scenario in the 450 Scenario, Delayed CCS 450 Case and Low Nuclear 450 Case
Trillion dollars (2010) Share of abatement 100% 17.0 Efficiency Renewables Biofuels Nuclear CCS Additional investment (right axis)

80%
60% 40%

16.5
16.0 15.5

20%
0% 450 Scenario Delayed CCS Low Nuclear 450 Case 450 Case

15.0
14.5

If CCS deployment was delayed or if less nuclear was deployed, mitigation costs would rise and put unprecedented pressure on other technologies

The energy trilemma

EQUILIBRIUM?

Affordability

Why Nuclear Power?

Nuclear new build motivated by:
Considerations of security of energy supply, driven by

dependencies on imports, concerns about instability and price variability;

Economic and population growth leading to increased

demand for energy in developing countries;

Concerns surrounding the contribution of carbon dioxide

to global climate change, given the increasing evidence of real effects; and
More attractive economic outcomes and projections

for nuclear electricity production.

The current contribution of nuclear power

In 2010, nuclear power produced 14% of global electricity (21% in OECD countries); If substituted by coal, global emissions would rise by 3 Gt; OECD power sector emissions would be up to 1/3 higher; For the period 1971 2004, cumulative emission savings were about 58 Gt from (compared to 218 Gt total OECD power sector emissions).

Source: NEA (2009b), Nuclear Energy and Addressing Climate Change

%
80

Nuclear Power Share of Total Electricity Production in OECD Countries (2009)

75,1

70

60
54,4 51,7 44,9 37,4 38,2 39,2

50

40
34,7 35,8

30
29,2

33,1

20
17,5 17,9 14,8

22,8 20,2

24,7 21,8 18,6

25,3

10
3,2 4,4

11

Contributions of nuclear to energy security

12

Generations of Nuclear Reactors

Generation IV Generation III+ Generation III Generation I Early Prototypes Reactors

Generation II
Commercial Power Reactors Advanced Power Reactors

Evolutionary Designs

Revolutionary Designs

Shippingport Dresden Magnox

PWRs BWRs CANDU

CANDU 6 System 80+ AP600

ABWR ACR1000 AP1000 APWR EPR ESBWR

Enhanced safety Minimization of waste and better use of natural resources More economical Improved proliferation resistance and physical protection

1950

1960

1970

1980

1990

2000

2010

2020

2030

Gen I

Gen II

Gen III

Gen III+

Gen IV

The decarbonisation challenge

Current energy supply and demand is unsustainable The response to climate change must be to decarbonise the economies of the world. The WEO discusses various scenarios that lead to levels of CO2 emissions and concomittant temperature rises

The 450 Scenario sets out an energy pathway consistent with limiting the increase in temperature to 2C.

Nuclear is Already a Widely Used Low-Carbon Technology

World Total: 20130 TWh

1,5% 0,3% 2,4%

OECD Total: 10468 TWh

0,4%

13,4% 40,3% 16,5% Coal Oil 21,4% 34,6% Coal Oil Natural gas Biomass & waste Hydro Nuclear 13,2% 3,1% 2,3% 5,1% 22,6% Solar & wind Other

Natural gas
Biomass & waste Hydro Nuclear Solar & wind 1,4% 21,4%

Other

Source: based on data from: Electricity information 2011

Potential Growth of Nuclear Capacity and Electricity Generation to 2050

1400 40%

ETP 2010
1200 35% 30% 25% 800 20% 600
15%

Africa & Middle East

Economies in Transition

Share of global electricity production

1000

ETP 2012

Other Developing Asia

Installed capacity GW

OECD Pacific

OECD Europe

Latin America

US & Canada

400

10% 5% 0% 2010 2020 2030 2040 2050

India

200

China

BLUE Map

BLUE High Nuclear

IEA 2010

Range of projected installed nuclear capacity in 2030 (GWe)

WNA 2011

IAEA RDS 2011

NEA/IAEA RedBook 2009

NEA NEO 2008

IEA WEO 2011

100

200

300

400

500

600

700

800

Range of projected installed nuclear capacity in 2050 (GWe)

Range of projected installed nuclear capacity in 2050 (GWe)

IPCC

IAEA RDS 2011

NEA NEO 2008

IEA ETP 2010

500

1000

1500

2000

2500

3000

Nuclear power plant construction starts, 1955 to 2011

Nuclear Construction - Annual Starts

50 45 Annual Construction Starts 1979, TMI 1986, Chernobyl 2011, Fukushima

40
35 30 25 20

Rate required

15
10 5 0 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

REACTORS UNDER CONSTRUCTION end 2011 Source: IAEA PRIS.

30 25 20
GWe

26
Total of 63

15 10

10 5
0 1 1 2 1 1

6 2

5 1 2 2 2 1

Is Nuclear Competitive? (1)

Levelised Cost of Electricity Generation by Region (5% Discount Rate)
250
Median Line

200

USD/MWh

150

100

50

Nuclear Coal

Gas

Wind Onshore

Nuclear Coal

Gas

Wind Onshore

Nuclear Coal

Gas

Wind Onshore

N. America

Europe

Asia Pacific

Nuclear is already a very cost competitive technology

Source: Projected Costs of Generating Electricity, IEA/NEA 2010

Is Nuclear Competitive? (2)

Levelised Cost of Electricity Generation by Region (10% Discount Rate)
250
Median Line

200

USD/MWh

150

100

50

Nuclear Coal

Gas

Wind Onshore

Nuclear Coal

Gas

Wind Onshore

Nuclear Coal

Gas

Wind Onshore

N. America

Europe

Asia Pacific

But nuclear costs depend strongly on the discount rate

Source: Projected Costs of Generating Electricity, IEA/NEA 2010

SYSTEM COSTS OF ELECTRICITY the total costs above plant-level costs to supply electricity at a given load and given level of security of supply. Primarily these are grid costs which consist of additional costs: required for expanding the network for transport and distribution, balancing the network in the short-term and providing adequate back-up capacity in the long-term.

Plant-level costs

Grid-level costs

Total system costs

Germany
System Costs at the Grid-Level [USD/MWh]
Technology Penetration level Total plant level costs Back-up Costs (Adequacy) Balancing Costs Grid Connection Grid Reinforcement and Extension Total Grid-Level Costs Total system costs 0,00 0,52 1,90 0,00 2,42 70,25 Nuclear 10% 67,82 0,00 0,35 1,90 0,00 2,25 70,07 0,10 0,00 0,93 0,00 1,03 86,69 30% 10% 85,66 0,10 0,00 0,93 0,00 1,03 86,69 0,00 0,00 0,54 0,00 0,54 87,84 Coal 30% 10% 87,30 0,00 0,00 0,54 0,00 0,54 87,84 Gas 30% Onshore wind 10% 21,28 3,30 6,37 1,73 32,68 152,18 30% 23,63 6,41 6,37 21,12 57,52 177,02 119,50 Offshore wind 10% 21,28 3,30 38,13 0,92 63,63 222,05 30% 23,63 6,41 38,13 11,30 79,46 237,87 10% 29,69 3,30 14,06 40,68 87,73 538,87 158,41 Solar 30% 30,42 6,41 14,06 40,68 91,57 542,71 451,14

Changes after Fukushima Daiichi Accident

Policy Reaction of the International Community
Political reaction announced by most countries: recognition of the severity of the situation and need to assure safety Domestic in-depth safety reviews (stress tests) of national nuclear fleet, from China, European Union, Korea, Russia, USA, others

Political decisions by some countries to shutdown their nuclear reactors: Germany To phase out gradually: Switzerland. Not to proceed: Italy. Many others confirmed their intentions.

25

Concerns of the Public after Fukushima Dai-ichi

Can nuclear power be safe? How to ensure a better nuclear safety. Waste disposal still unresolved. Non proliferation regime is it tough enough? Life extension of the existing fleet. Independence and toughness of national nuclear safety authorities.

26

Impact of Accident on Development of Nuclear Power In the medium term, the accident will slow the development of nuclear power : public opinion has been strongly affected;
Lessons need to be integrated in design and siting of new and existing plants; external hazards need additional treatment. Electricity demand expected to triple by 2050; CO2 emissions will have to decrease (80%?); Nuclear energy has saved 65 Gt of CO2 emissions from 1971 to 2007; Renewables still expensive especially at full cost; Geopolitical risks remain high for oil and potentially gas (MENA) Most of nuclear development will take place in Asia and specifically in China and India; these countries have maintained their objective of a wide deployment of nuclear reactors and have few other choices Gen III reactors have enhanced and some more passive safety; technical lessons to be learnt will increase even more their safety and that of the existing fleet.
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In the long term, several factors support nuclear power:

Conclusions
Demand for energy will continue to grow, especially in the developing world Nuclear power is attractive for security of supply, GHG reductions and economic competitiveness. Under reasonable conditions, nuclear is the most competitive technology on a lifetime basis. Up to March 2011, there was a growing consensus on the need to expand nuclear power. The recent accident has caused a reconsideration in many countries but those without alternative energy sources are likely to continue this path Concerns over safety, waste and non-proliferation will continue to need addressing, both technically, politically and socially. Public confidence was the greatest impact of Fukushima Dai-ichi and trust will only be rebuilt slowly.

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Conclusions
Nuclear is a proven technology and is a least cost option for a low-carbon strategy provided financial costs are contained Most energy studies recognise nuclears role. The IEA/NEA roadmap in 2010 indicated that installed capacity should reach 1 200 GW and supply 24% of the worlds electricity in 2050 under the sustainable growth scenario. However: Governments need to make long term commitments Industry needs to demonstrate building to time and budget Repositories for HLW need to be built The public need to be involved meaningfully Financing, skilled workforce and nuclear capacities must be addressed While no major technology breakthroughs are needed immediately, deployment of Generation IV technologies and advanced fuel cycle technologies are needed for nuclear to remain competitive. The impact of Fukushima will be to slow the rate of nuclear growth. Two major challenges must be addressed how to finance nuclear power in liberalised markets and how to restore public trust.