Analysis: Behind IEA Push for Nuclear as 'Clean Energy' Solution

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The International Energy Agency (IEA) warned this week that without a major shift in government policies, global nuclear power capacity will plunge in the coming decades, potentially contributing to a sharp increase in carbon dioxide emissions. The agency argued that reactor life extensions are "generally cost-competitive" with other power generation sources, including new wind and solar capacity, and that both these extensions and newbuilds should be encouraged by government policies. With no new investment in such capacities, nuclear output would drop by roughly two-thirds by 2040 and result in additional CO2 emissions of 4 billion metric tons by the same date, the IEA maintained. The report plunges the Paris-based agency into the furious debate over whether nuclear power can be considered a "clean" energy source alongside renewables such as wind and solar, and the extent to which its continued use should be encouraged in the battle against global climate change. The IEA is coming down clearly on the side of nuclear power as a clean source, and in its recommendations it advocated solutions -- such as redesigning electricity markets to benefit nuclear and other low-carbon power generators -- already being pushed by nuclear industry advocates, most notably in the US (related; NIW Apr.22'19). At the same time, the IEA recognizes that achieving sustainability targets requires an accelerated expansion of clean electricity -- with 85% of generation coming from such sources by 2040 compared to just 36% today. "Along with massive investments in efficiency and renewables, the trajectory would need an 80% increase in global nuclear power production by 2040," the report states. "Government policies have so far failed to value the low-carbon and energy security attributes of nuclear power, making even the continued operation of existing plants challenging," IEA Executive Director Fatih Birol said in a May 28 statement accompanying release of the agency's first nuclear-focused report in almost two decades (NIW May3'19). "If governments don't change their current policies, advanced economies will be on track to lose two-thirds of their current nuclear fleet, risking a huge increase in CO2 emissions." Founded in 1974 out of the Organization for Economic Cooperation and Development to coordinate a response to the 1973-74 oil supply crisis, the IEA has since become the premier source of global energy analysis, and expanded its focus to include both energy security and climate change. The agency's 30 member countries include the likes of Austria and Germany, both evermore skeptical of nuclear power, and the IEA emphasized in its report that it "makes no recommendations to countries that have chosen not to use nuclear power in their clean energy transition and respects their choice to do so." For those countries that have not made a categorical decision to avoid or phase out nuclear power, however, the agency argued that the energy source was critical to any effort to tackle climate change. Despite the huge growth of solar and wind power in recent decades, the IEA warned, "the overall share of clean energy sources in total electricity supply in 2018, at 36%, was the same as it was 20 years earlier because of the decline in nuclear." That decline has been most pronounced in Europe, North America and Japan, which have the oldest reactors, and is only slated to pick up in coming decades. The average reactor in the EU is 35 years old and in the US 39 years old, and with most reactors boasting original design lives of 40 years, considerable investment is required to extend these older reactor fleets over the coming decades. Japan's nuclear generation nosedived to zero after the 2011 Fukushima disaster, and the outlook for reactor restarts beyond the nine already now operating is uncertain (related). Contested Conclusions "I'm quite stunned about the level of the realistic assessment of the state of the industry, which is close to what we've been saying for years in the status report," longtime nuclear critic and independent analyst Mycle Schneider told Energy Intelligence, referring to the annual World Nuclear Industry Status Report he has coordinated for years (NIW Sep.15'17). Last year's status report noted that for three years running global nuclear power generation excluding China had declined, while newbuilds dropped to a decade low. But Schneider raised his eyebrows at the IEA's call for political action to stem the decline of nuclear power. "The industry's been trying, and governments of many countries have been trying, to get this industry off the ground with huge amounts of money, and it's failed. What's very strange [about the IEA report] is that after this rather sobering assessment, there's not a reality check on the options that are out there." The IEA recommends that policymakers establish "a level playing field" for nuclear power with other low-carbon energy sources and "remunerate it accordingly." That includes designing an electricity market that "properly values the system services needed to maintain electricity security including capacity availability and frequency control services." It also recommended establishing "risk management and financing frameworks" to attract capital for newbuilds and life extensions "at an acceptable cost, taking the risk profile and longtime horizons of nuclear projects into consideration." Jan Haverkamp, an energy expert with anti-nuclear Greenpeace, highlighted the IEA's advocacy of "market interference in the form of capacity markets and other forms of subsidies for nuclear lifetime extension. All in all, this is yet another rather blatant begging letter from an industry that is in decline." Haverkamp also contested the IEA's contention that reactor lifetime extensions are competitive with new renewables. There's a "logical mismatch" between that assertion and the fact that any such investment "has no chance on the market." The IEA points to the nature of these generation markets, which together with "regulatory systems ... often penalise nuclear power by not pricing in its value as a clean energy source and its contribution to electricity security. As a result, most nuclear power plants in advanced economies are at risk of closing prematurely." If such closures take place, the IEA's warning is stark: under current policy ambitions, "while renewable investment would continue to grow, gas and, to a lesser extent, coal would play significant roles in replacing nuclear." This would in turn result in cumulative CO2 emissions rising by 4 billion metric tons by 2040, and would increase investment needs "by almost $340 billion as new power generation capacity and supporting grid infrastructure is built to offset retiring nuclear plants." Achieving the "clean energy transition" with less nuclear power is possible, the IEA admitted, "but would require an extraordinary effort." The agency pointed out that over the past two decades "wind and solar photovoltaic capacity has increased by about 580 gigawatts in advanced economies. But in the next 20 years, nearly five times that much would need to be built to offset nuclear's decline." Phil Chaffee, London

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