The nuclear industry takes center stage at COP 28, with discussions on the goal of tripling global nuclear power by 2050. Small modular reactors (SMRs) receive attention and support from the US export-import bank. The challenges and successes of nuclear power are explored, including competition from renewables. SMRs are positioned as a key player in the future of nuclear energy, with potential applications in replacing coal power plants. Financing and regulatory challenges are discussed, with emphasis on investor expectations and collaboration with the finance community.
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Quick takeaways
Nuclear power has gained significant prominence at the COP 28 climate talks, with discussions and commitments highlighting its importance in addressing climate change.
The goal of tripling global nuclear power capacity by 2050 is achievable with strategic planning and investments, including the utilization of small modular reactors (SMRs) with their potential for replacing coal plants and powering energy-intensive industries.
Deep dives
Growing Prominence of Nuclear Power at COP 28
Nuclear power has gained significant prominence at the COP 28 climate talks, with discussions and commitments highlighting its importance in addressing climate change. The United Arab Emirates' pioneering efforts in nuclear power and the construction of four reactors to meet 25% of its electricity demand have contributed to this increased attention. Notably, 24 governments, including France, Japan, the US, and the UK, have set a goal to triple worldwide nuclear power generation capacity by 2050. This commitment demonstrates a growing recognition of nuclear energy's central role in achieving net-zero emissions. Moreover, the nuclear industry is seeking international investments and financial support to meet these objectives.
Challenges and Realism of Tripling Nuclear Power Capacity
Although the goal of tripling global nuclear power capacity by 2050 is ambitious, experts believe it is achievable with strategic planning and investments. The International Atomic Energy Agency's projections estimate around 890 gigawatts of nuclear capacity by 2050, which represents more than a doubling of the current capacity. While challenges such as construction delays and cost overruns have affected projects in some regions, other countries like China and Russia have shown success in building reactors on time and within budget. Tripling nuclear capacity will likely involve a combination of large reactors and small modular reactors (SMRs). Additionally, utilizing nuclear power for industrial heat applications and exploring options for financing nuclear projects will be crucial.
Importance of Financing and Market Recognition for Nuclear Power
One of the critical aspects for nuclear power's future is financing. Historically, financing nuclear projects has been challenging due to long construction times and large initial investments. To advance nuclear power's growth, it is crucial to align the expectations of investors with the long-term benefits of nuclear projects. Establishing markets that recognize the value of nuclear energy and its 24/7 reliable power generation will be essential. Additionally, securing affordable and accessible financial means for nuclear projects comparable to other low-carbon energy sources will have a significant impact. Encouraging policy support, enhancing market visibility, and fostering partnerships with the finance community are crucial steps to drive nuclear power investments.
Small Modular Reactors (SMRs) and the Future of the Nuclear Industry
Small modular reactors (SMRs) are expected to play a key role in the future of nuclear energy. These scalable and flexible reactors offer applications for replacing coal plants, providing district heating, and powering energy-intensive industries. While there is a mix of reactor technologies, including large reactors, SMRs, with their potential for easy replacement of existing coal plants and suitability for specific applications, are gaining attention. Financing and regulatory support will be instrumental in realizing the potential of SMRs. With the involvement of private equity, venture capitalists, asset managers, and sovereign wealth funds, the expansion of financing options can boost the deployment of SMRs and other nuclear technologies.
Nuclear energy has been in the headlines more in Dubai, than at any previous COP.
Nuclear power has had more prominence at this year’s climate talks than at any previous COP. In fact, some people have even been calling it “the nuclear COP”.
That’s partly because the hosts, the United Arab Emirates, have been a pioneer of nuclear power in the Gulf region, building four reactors to meet 25 per cent of its electricity demand. At this year’s COP, 24 governments set a goal to triple worldwide nuclear power generation capacity by 2050. To discuss the implications of this pledge, and analyse the current state of the nuclear industry globally, Ed Crooks is joined by Henri Paillere, who is head of the planning and economic studies section at the International Atomic Agency. He says there is now a much wider appreciation of the central role that nuclear power can play in tackling climate change.
Nuclear technology is also seen as offering some big commercial opportunities. The EX-IM Bank, the US export – import bank, recently launched a package of measures intended to support sales of US Small Modular reactors – SMRs. Reta Lewis, chair of the Ex-Im bank came to the COP and spoke to the Energy Gang, to highlight the bank’s support for SMR investment around the world.
SMRs are expected to play a key role in the future of nuclear energy, as Dr Sama Bilbao y Leon, who is the director-general of the World Nuclear Association, which represents the international nuclear industry, said when she joined Ed in the studio.
We’ll be following the latest developments from COP28 right to the end of the summit, so subscribe and join the conversation – we’re @theenergygang.