Policy and Market Factors Shaping National Nuclear Strategies

OVERVIEW:  "Nuclear Energy Remains Vital to Urban Energy Reliability, amid "Pivot to Asia"

Expanding populations in Asia, high levels of economic growth, and increasing urbanization are combining to create demand for large amounts of reliable and affordable base-load electricity.  Governments in Asia and some in the Middle East have recognized this need and have made nuclear power a major part of the energy mix they are developing to meet this demand. China alone is expected to have eight mega-cities (population over ten million) and more than 200 cities with over one million residents by 2030.  Affordable baseload electricity is crucial for these countries to sustain the high level of economic growth they have experienced during the last decade.  Government support, via regulations and financing, has been pivotal to the accelerated growth of nuclear energy.  In China and India, as well as most of Asia and Europe, government enterprises are responsible for the construction and operation of nuclear power plants.  More than 70 GWe of nuclear construction is underway globally, 70% of it in Asia.  More than 200 GWe is in various planning stages, half of that in China or India. IAEA sees total world capacity touching 600 GWe by 2030, from 370 GWe today, but capacity in Europe (160 GWe today) will decline by then.

Initially, nuclear power was the sole province of the five post-WWII nuclear powers – USA, UK, France, Russia and China.  Each still uniquely holds a coveted permanent seat on the UN Security Council, the “P5”.  Back then nuclear energy and Eisenhower’s “Atoms for Peace” initiative supported a drive for broadening the impact of nuclear power from national security to domestic energy autonomy. The value of nuclear energy in curbing emissions was seen much later, in the 1990s, as national strategies emerged to deal with local pollution and carbon load in the atmosphere.  Eighty percent of new reactor construction worldwide is proceeding under the aegis of Sovereign Enterprises, rather than investor-owned utilities.  In its most recent “Redrawing the Energy Climate Map” report (June 2013), IEA states that nuclear energy remains a vital underpinning technology in the IEA's so-called 450ppm scenario, which seeks to limit global temperature increases to 2°C, especially vital to inhibit runaway glacier melting.  This scenario sees nuclear generation increasing by almost 1800 TWh in 2035 (or by about 40%) over the level achieved in the "4 policy measures - for - 2°C" [4-for-2] scenario.  But, energy demand in North America and Europe has largely crested, and can no longer sustain a nuclear industrial infrastructure based on domestic demand alone.  Three national strategies have emerged:  Renaissance, Restructuring and Rollback.

Clean, reliable electricity for major urban areas, particularly in Asia, poses the largest arena for development and deployment of reactors done right.  The US will need to team with prominent allies in Asia, particularly Japan and South Korea, and eventually India, to achieve its own geo-political and economic objectives (e.g., trade expansion, lower global pollution levels, retention of nuclear engineering expertise), and to maintain safety and non-proliferation practices in this critical sector.  Leadership in nuclear energy, and with nascent small modular reactors (SMRs), must now respond to a more intense demand-driven landscape via alliances in Asia, where the market is unfolding and where real progress can be made on global emissions and urban resilience.   Leadership in the global nuclear energy market and in safeguards and regulatory policy no longer means selling or operating more reactors than the next country.  Instead, leadership will increasingly be executed through international cooperative agreements and by multinational consortia and investments, supported by government policies mindful of long-term benefits, such as energy security, urban resilience for large cities, plus vital emissions reductions.

The USA cannot idly let its leadership position wither away in the global nuclear energy landscape, just as Britain did when it discovered “cheap North Sea gas” in the 1980s.  Britain used up its cheap gas over three decades and is now dependent once again on imported energy, and faces higher electricity prices.  In the nuclear arena, leadership cannot be simply “restored” based on the old “push” model of Supply-side dominance from the 20th Century.  Urban demand-side factors outside Europe and North America now are pulling nuclear power construction forward in the 21st Century to satisfy burgeoning electric demand, primarily in Asian cities, and for growing populations and water needs in the Middle East and Africa.  USA and allies must redefine leadership in nuclear energy via international partnerships and alliances that are unfolding now.
Andrew D. Paterson / Walter S. Howes

National Nuclear Energy Strategies - Part II May 12 pdf - ADP WSH.pdf1.97 MB