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Nuclear Power and Secure

Energy Transitions

From today’s challenges to tomorrow’s

clean energy systems

The IEA examines the

full spectrum

of energy issues

including oil, gas and

coal supply and

demand, renewable

energy technologies,

electricity markets,

energy efficiency,

access to energy,

demand side

management and

much more. Through

its work, the IEA

advocates policies that

will enhance the

reliability, affordability

and sustainability of

energy in its

31 member countries,

10 association

countries and beyond.

Please note that this

publication is subject to

specific restrictions that limit

its use and distribution. The

terms and conditions are

available online at

www.iea.org/t&c/

This publication and any

map included herein are

without prejudice to the

status of or sovereignty over

any territory, to the

delimitation of international

frontiers and boundaries and

to the name of any territory,

city or area.

Source: IEA. All rights

reserved.

International Energy Agency

Website: www.iea.org

IEA member

countries:

Australia

Austria

Belgium

Canada

Czech Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Japan

Korea

Lithuania

Luxembourg

Mexico

Netherlands

New Zealand

Norway

Poland

Portugal

Slovak Republic

Spain

Sweden

Switzerland

Republic of Türkiye

United Kingdom

United States

The European

Commission also

participates in the

work of the IEA

IEA association

countries:

Argentina

Brazil

China

Egypt

India

Indonesia

Morocco

Singapore

South Africa

Thailand

INTERNATIONAL ENERGY

AGENCY

Nuclear Power and Secure Energy Transitions Abstract

Page | 3

Abstract

Nuclear Power and Secure Energy Transitions: From Today’s Challenges to

Tomorrow’s Clean Energy Systems is a new report by the International Energy

Agency that looks at how nuclear energy could help address two major crises –

energy and climate – facing the world today. Russia’s invasion of Ukraine and the

disruptions in global energy supplies that it has fuelled have made governments

rethink their energy security strategies, putting a stronger focus on developing more

diverse and domestically based supplies. For multiple governments, nuclear energy

is among the options for achieving this. At the same time, many governments have in

recent years stepped up their ambitions and commitments to reach net zero

emissions. Nuclear Power and Secure Energy Transitions expands upon the IEA’s

landmark 2021 report, Net Zero by 2050: A Roadmap for the Global Energy Sector. It

does so by exploring in depth nuclear power’s potential role as a source of low

emissions electricity that is available on demand to complement the leading role of

renewables such as wind and solar in the transition to electricity systems with net zero

emissions.

In this context, the report examines the difficulties facing nuclear investment,

particularly in advanced economies, in the areas of cost, performance, safety and

waste management. It considers the additional challenge of meeting net zero targets

with less nuclear power than envisioned in the IEA Net Zero Roadmap, as well as

what kind of cost targets could enable nuclear power to play a larger role in energy

transitions. For countries where nuclear power is considered an acceptable part of

the future energy mix, the new report identifies the potential policy, regulatory and

market changes that could be implemented in order to create new investment

opportunities. It also looks at the role of new technologies, particularly small modular

reactors, and their potential development and deployment.

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NuclearPowerandSecureEnergyTransitionsFromtoday’schallengestotomorrow’scleanenergysystemsTheIEAexaminesthefullspectrumofenergyissuesincludingoil,gasandcoalsupplyanddemand,renewableenergytechnologies,electricitymarkets,energyefficiency,accesstoenergy,demandsidemanagementandmuchmore.Throughitswork,theIEAadvocatespoliciesthatwillenhancethereliability,affordabilityandsustainabilityofenergyinits31membercountries,10associationcountriesandbeyond.Pleasenotethatthispublicationissubjecttospecificrestrictionsthatlimititsuseanddistribution.Thetermsandconditionsareavailableonlineatwww.iea.org/t&c/Thispublicationandanymapincludedhereinarewithoutprejudicetothestatusoforsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundariesandtothenameofanyterritory,cityorarea.Source:IEA.Allrightsreserved.InternationalEnergyAgencyWebsite:www.iea.orgIEAmembercountries:AustraliaAustriaBelgiumCanadaCzechRepublicDenmarkEstoniaFinlandFranceGermanyGreeceHungaryIrelandItalyJapanKoreaLithuaniaLuxembourgMexicoNetherlandsNewZealandNorwayPolandPortugalSlovakRepublicSpainSwedenSwitzerlandRepublicofTürkiyeUnitedKingdomUnitedStatesTheEuropeanCommissionalsoparticipatesintheworkoftheIEAIEAassociationcountries:ArgentinaBrazilChinaEgyptIndiaIndonesiaMoroccoSingaporeSouthAfricaThailandINTERNATIONALENERGYAGENCYNuclearPowerandSecureEnergyTransitionsAbstractPage3IEA.Allrightsreserved.AbstractNuclearPowerandSecureEnergyTransitions:FromToday’sChallengestoTomorrow’sCleanEnergySystemsisanewreportbytheInternationalEnergyAgencythatlooksathownuclearenergycouldhelpaddresstwomajorcrises–energyandclimate–facingtheworldtoday.Russia’sinvasionofUkraineandthedisruptionsinglobalenergysuppliesthatithasfuelledhavemadegovernmentsrethinktheirenergysecuritystrategies,puttingastrongerfocusondevelopingmorediverseanddomesticallybasedsupplies.Formultiplegovernments,nuclearenergyisamongtheoptionsforachievingthis.Atthesametime,manygovernmentshaveinrecentyearssteppeduptheirambitionsandcommitmentstoreachnetzeroemissions.NuclearPowerandSecureEnergyTransitionsexpandsupontheIEA’slandmark2021report,NetZeroby2050:ARoadmapfortheGlobalEnergySector.Itdoessobyexploringindepthnuclearpower’spotentialroleasasourceoflowemissionselectricitythatisavailableondemandtocomplementtheleadingroleofrenewablessuchaswindandsolarinthetransitiontoelectricitysystemswithnetzeroemissions.Inthiscontext,thereportexaminesthedifficultiesfacingnuclearinvestment,particularlyinadvancedeconomies,intheareasofcost,performance,safetyandwastemanagement.ItconsiderstheadditionalchallengeofmeetingnetzerotargetswithlessnuclearpowerthanenvisionedintheIEANetZeroRoadmap,aswellaswhatkindofcosttargetscouldenablenuclearpowertoplayalargerroleinenergytransitions.Forcountrieswherenuclearpowerisconsideredanacceptablepartofthefutureenergymix,thenewreportidentifiesthepotentialpolicy,regulatoryandmarketchangesthatcouldbeimplementedinordertocreatenewinvestmentopportunities.Italsolooksattheroleofnewtechnologies,particularlysmallmodularreactors,andtheirpotentialdevelopmentanddeployment.NuclearPowerandSecureEnergyTransitionsAcknowledgementsPage4IEA.Allrightsreserved.Acknowledgements,contributorsandcreditsThestudywasdesignedanddirectedbyKeisukeSadamori,DirectorofEnergyMarketsandSecurity.ThemainauthorsofthestudyarePeterFraser,BrentWanner,KeithEverhartandAntoineHerzog.LuisLopez,ZoeHungerford,MaxSchoenfischandYunyouChenweretheotherprincipalcontributorstothisreport.ValuablecommentsandfeedbackwereprovidedbyseniormanagementandnumerousothercolleaguesattheIEAand,inparticular,LauraCozzi,TimGould,TimurGül,AmosBromhead,AlessandroBlasi,AlejandroHernandez,FengquanAn,BrianMotherway,HiroyasuSakaguchi,RebeccaGaghenandNickJohnstone.ThanksgototheIEA’sCommunicationsandDigitalOfficefortheirhelpinproducingthefinalreportandwebsitematerials,particularlytoJadMouawad,ThereseWalsh,JethroMullen,AstridDumondandAllisonLeacu.Fortheireditingsupport,wethankTrevorMorgan(principal)andAdamMajoe(copy-editor).Additionally,thestudyteambenefittedfrommeetingswithspecialists,includingthosefromtheOECDNuclearEnergyAgency,andparticularlyMichelBerthélemy,whoprovidedinsightsandhelpfulinformation.WealsoheldusefuldiscussionswithWeiHuang,HenriPaillèreandcolleaguesattheInternationalAtomicEnergyAgency,SamaBilbaoyLeónandcolleaguesattheWorldNuclearAssociation,andKirstyGoganandEricIngersollofTerrapraxis.Specialthanksgotothosewhowereinterviewedonthetopicofsmallmodularreactors,includingChrisLevesque(Terrapower),RenaudCrassous(Nuward),DominiqueMinière(OntarioPowerGeneration),CosminGhita(Nuclearelectrica),JohnParsons(MassachusettsInstituteofTechnology),RuminaVelshi(CanadianNuclearSafetyCommission),DeclanBurke(DepartmentofBusiness,EnergyandIndustrialStrategy,UnitedKingdom),BruceSmith(EmiratesWaterandElectricityCompany),ShengZhou(TsinghuaUniversity),YasuharuKimuraandIkuoHoshino(JGC),andAlastairEvans(Rolls-Royce).Wewouldalsoliketothanktheexternalreviewers,including:DanielBalogMinistryofForeignAffairs,HungaryMarcoBaroniIndependentconsultantNuclearPowerandSecureEnergyTransitionsAcknowledgementsPage5IEA.Allrightsreserved.MaximilianBarthGermanCorporationforInternationalCooperationJean-PaulBouttesIndependentconsultantDianeCameronNuclearEnergyAgencyJuanIgnaciodelCastilloCamposMinistryofIndustry,TradeandTourism,SpainEwaChmura-GolonkaMinistryofClimateandEnvironment,PolandGwangjunChoiMinistryofForeignAffairs,RepublicofKoreaRussellConklinUnitedStatesDepartmentofEnergyRenaudCrassousÉlectricitédeFranceFrançoisDassaÉlectricitédeFranceJacGoodmanUnitedStatesDepartmentofEnergyHiroyukiGotoNuclearEnergyAgencyVolkerHolubetzFederalMinistryforClimateAction,Environment,Energy,Mobility,InnovationandTechnology,AustriaEsaHyvarinenFortumJanHorstKepplerNuclearEnergyAgencyKenKoyamaInstituteofEnergyEconomics,JapanKingLeeWorldNuclearAssociationFrançoisLévêqueÉcoleNationaleSupérieuredesMinesdeParisWilliamD.MagwoodIVNuclearEnergyAgencyKrisMcCoyMinistryofIndustry,AustraliaManabuNabashimaMinistryofForeignAffairs,JapanRitikaNandekeolyarGlobalAffairsCanadaDavidNewberyUniversityofCambridge,UnitedKingdomTomaszNowackiMinistryofClimateandEnvironment,PolandReelikaRunnelMinistryoftheEnvironment,EstoniaBarışSanliMinistryofEnergyandNaturalResources,TürkiyeAntoniaVayaSolerNuclearEnergyAgencyNuclearPowerandSecureEnergyTransitionsAcknowledgementsPage6IEA.Allrightsreserved.MarkusWrakeEnergiforskShengZhouTsinghuaUniversity,ChinaTheindividualsandorganisationsthatcontributedtothisstudyarenotresponsibleforanyopinionsorjudgmentsitcontains.AllerrorsandomissionsaresolelytheresponsibilityoftheIEA.NuclearPowerandSecureEnergyTransitionsExecutivesummaryPage7IEA.Allrightsreserved.ExecutiveSummaryAnewdawnfornuclearenergy?Nuclearenergycanhelpmaketheenergysector'sjourneyawayfromunabatedfossilfuelsfasterandmoresecure.Amidtoday’sglobalenergycrisis,reducingrelianceonimportedfossilfuelshasbecomethetopenergysecuritypriority.Nolessimportantistheclimatecrisis:reachingnetzeroemissionsofgreenhousegasesbymid-centuryrequiresarapidandcompletedecarbonisationofelectricitygenerationandheatproduction.Nuclearenergy,withits413gigawatts(GW)ofcapacityoperatingin32countries,contributestobothgoalsbyavoiding1.5gigatonnes(Gt)ofglobalemissionsand180billioncubicmetres(bcm)ofglobalgasdemandayear.WhilewindandsolarPVareexpectedtoleadthepushtoreplacefossilfuels,theyneedtobecomplementedbydispatchableresources.Astoday’ssecondlargestsourceoflowemissionspowerafterhydropower,andwithitsdispatchabilityandgrowthpotential,nuclear–incountrieswhereitisaccepted–canhelpensuresecure,diverselowemissionselectricitysystems.Advancedeconomieshavelostmarketleadership.Althoughadvancedeconomieshavenearly70%ofglobalnuclearcapacity,investmenthasstalledandthelatestprojectshaverunfaroverbudgetandbehindschedule.Asaresult,theprojectpipelinesandpreferreddesignshaveshifted.Ofthe31reactorsthatbeganconstructionsincethebeginningof2017,allbut4areofRussianorChinesedesign.Restrictionsonnuclearpowerremainincertaincountries,drivenbyconcernsaboutsafetyandwaste.The2011accidentattheFukushima-DaiichiplantinJapanfollowingamajorearthquakeunderminedpublictrustinnuclearpower,underscoringtheneedforrobust,independentregulatoryoversight.Accidentrisksareoneofthemainfactorsbehindbansonnuclearpowerorpoliciestophaseitout.Whilethereisprogressondisposingofhigh-levelnuclearwaste,withthreecountrieshavingapprovedsites,gainingpublicandpoliticalacceptancehasbeenchallenging.Thepolicylandscapeischanging,openingupopportunitiesforanuclearcomeback.Morethan70countries,coveringthree-quartersofenergy-relatedgreenhousegasemissions,havepledgedtocuttheiremissionstonetzero.Whilerenewableswouldprovidethelargestshareoflowemissionselectricityandmanycountrieseitherdonotforeseetheneedordonotwantarolefornuclearpower,agrowingnumberofcountrieshavealsoannouncedplanstoinvestinnuclear.TheUnitedKingdom,France,China,PolandandIndiahaverecentlyannouncedenergystrategiesthatincludesubstantialrolesfornuclearpower.TheUnitedStatesisinvestinginadvancedreactordesigns.NuclearPowerandSecureEnergyTransitionsExecutivesummaryPage8IEA.Allrightsreserved.Energysecurityconcernsandtherecentsurgeinenergyprices,notablyinthewakeofRussia’sinvasionofUkraine,havehighlightedthevalueofadiversemixofnon-fossilanddomesticenergysources.BelgiumandKoreahaverecentlyscaledbackplanstophaseoutexistingnuclearplants.TheUKEnergySecurityStrategyincludesplansforeightnewlargereactors.FasterrestartsofJapanesenuclearreactorsthathavereceivedsafetyapprovalscouldfreeupliquefiednaturalgas(LNG)cargoesdesperatelyneededinEuropeorothermarketsinAsia.Inthedecadefollowingthe1973oilshock,constructionstartedonalmost170GWofnuclearpowerplants.Theseplantsstillrepresent40%oftoday’snuclearcapacity.Nuclearadditionsinthelastdecadereachedonly56GW.Withpolicysupportandtightcostcontrols,today’senergycrisiscouldleadtoasimilarrevivalfornuclearenergy.AchievingnetzerogloballywillbeharderwithoutnuclearAsanestablishedlarge-scalelowemissionsenergysource,nucleariswellplacedtohelpdecarboniseelectricitysupply.IntheIEA’sNetZeroEmissionsby2050Scenario(NZE),energysectoremissionsfallbyabout40%from2020to2030,andthendeclinetozeroonanetbasisby2050.Whilerenewablesourcesdominateandrisetonearly90%ofelectricitysupplyintheNZE,nuclearenergyplaysasignificantrole.Thisnarrowbutachievablepathwayrequiresrigorousandimmediatepolicyactionbygovernmentsaroundtheworldtoreshapeenergysystemsonmanyfronts.Extendingnuclearplants’lifetimesisanindispensablepartofacost-effectivepathtonetzeroby2050.About260GW,or63%,oftoday’snuclearplantsareover30yearsoldandnearingtheendoftheirinitialoperatinglicences.Despitemovesinthepastthreeyearstoextendthelifetimesofplantsrepresentingabout10%oftheworldwidefleet,thenuclearfleetoperatinginadvancedeconomiescouldshrinkbyone-thirdby2030.IntheNZE,thelivesofoverhalfoftheseplantsareextended,cuttingtheneedforotherlowemissionsoptionsbyalmost200GW.ThecapitalcostformostextensionsisaboutUSD500toUSD1100perkilowatt(kW)in2030,yieldingalevelisedcostofelectricitygenerallywellbelowUSD40permegawatt-hour(MWh),makingthemcompetitiveevenwithsolarandwindinmostregions.Nuclearpowerplaysasignificantroleinasecureglobalpathwaytonetzero.Nuclearpowerdoublesfrom413GWinearly2022to812GWin2050intheNZE.Annualnuclearcapacityadditionsreach27GWperyearinthe2030s,higherthananydecadebefore.Evenso,theglobalshareofnuclearintotalgenerationfallsslightlyto8%.Emerginganddevelopingeconomiesaccountformorethan90%ofglobalgrowth,withChinasettobecometheleadingnuclearpowerproducerbefore2030.Advancedeconomiescollectivelyseea10%increaseinnuclear,asretirementsareoffsetbynewplants,mainlyintheUnitedStates,France,theUnitedKingdomandNuclearPowerandSecureEnergyTransitionsExecutivesummaryPage9IEA.Allrightsreserved.Canada.AnnualglobalinvestmentinnuclearpowerrisesfromUSD30billionduringthe2010stooverUSD100billionby2030andremainsaboveUSD80billionto2050.Lessnuclearpowerwouldmakenetzeroambitionsharderandmoreexpensive.TheLowNuclearCasevariantoftheNZEconsiderstheimpactoffailingtoacceleratenuclearconstructionandextendlifetimes.Inthiscase,nuclear’sshareoftotalgenerationdeclinesfrom10%in2020to3%in2050.Solarandwindwouldneedtofillthegap,pushingthefrontiersofintegratinghighsharesofvariablerenewables.Moreenergystorageandfossilfuelplantsfittedwithcarboncapture,utilisationandstorage(CCUS)wouldbeneeded.Asaresult,theNZE’sLowNuclearCasewouldrequireUSD500billionmoreinvestmentandraiseconsumerelectricitybillsonaveragebyUSD20billionayearto2050.NuclearhastoupitsgameinordertoplayitspartTheindustryhastodeliverprojectsontimeandonbudgettofulfilitsrole.ThismeanscompletingnuclearprojectsinadvancedeconomiesataroundUSD5000/kWby2030,comparedwiththereportedcapitalcostsofaroundUSD9000/kW(excludingfinancingcosts)forfirst-of-akindprojects.Therearesomeprovenmethodstoreducecostsincludingfinalisingdesignsbeforestartingconstruction,stickingwiththesamedesignforsubsequentunits,andbuildingmultipleunitsatthesamesite.Stableregulatoryframeworksthroughoutconstructionwouldalsohelpavoiddelays.Anevenlargerrolefornuclearpowerwillrequiregreaterdeclinesinconstructioncosts.Hydropower,bioenergyandfossilfuelplantsequippedwithCCUSarethemainalternativedispatchablelowemissionssourcestonuclear.Eachonealsofaceschallengestoexpand.Hydropowersitesandsustainablebioenergysupplyarelimited,whilethereareeconomic,politicalandtechnicalobstaclestoscalingupCCUS.WherethereispotentialtoexpandthesealternativesandCCUSiscommerciallyavailable,theconstructioncostsofnuclearpowerwouldneedtofalltoUSD2000-3000/kW(in2020dollars)toremaincompetitive.Dependingonfinancingcosts,thiswouldyieldalevelisedcostofelectricityfornuclearpowerofUSD40-80/MWh,includingdecommissioningandwastedisposal.Ifnewprojectswereabletoachievethesecostsinmoremarkets,anevenlargerrolefornuclearwouldbeavailable.Usingelectricityfromnucleartoproducehydrogenandheatpresentsnewopportunities.TherapidexpansionoflowemissionshydrogenisakeypillaroftheNZE,withrelatedinvestmentrisingfromnearzerotodaytoUSD80billionperyearto2040.UndertheNZE’scostprojections,hydrogenproductionvianaturalgaswithCCUSorviaelectrolysisusingrenewablesarethecheapestoptions.Fornucleartocompetewiththesealternatives,investmentcostswouldneedtodecreasetoUSD1000-2000/kW.Theeconomicswouldbemorefavourableifthenuclearreactorisco-locatedwithahydrogenuser,avoidingtransportationcosts.TheNZEestimatesNuclearPowerandSecureEnergyTransitionsExecutivesummaryPage10IEA.Allrightsreserved.surplusnuclearelectricitycouldbeusedtoproduceanestimated20milliontonnesofhydrogenin2050.Therearealsopossibilitiestoco-generateheatfromnuclearplantstoreplacedistrictheatingandotherhigh-temperatureuses,thoughthepotentialscaleofthismarketislimitedandconstructioncostswouldneedtofalltoUSD2000-3000/kWtomakeitcompetitive.MarketsneedtoaccountforaddedvalueofallservicesNuclearandotherdispatchablepowersourcescomplementrenewablesbyprovidingcriticalservicestoelectricitysystems.Thepredominanceofwindandsolarinthepowermixandtheendofunabatedfossilgenerationmustbecomplementedbyadiversemixofdispatchablegenerationtoprovidestability,short-termflexibilityandadequatecapacityduringpeakdemandperiods.Forexample,inananalysisofacarbonneutralpowersysteminChina,nuclearwouldprovideonly10%oftotalelectricityproducedin2060,butsupplyalmosthalftherequiredinertia,akeycomponentofsystemflexibility.Wholesalemarketsshouldpricesystemservicestoreflecttheirvalue.Theneedforsystemservicessuchasflexibility,adequacyandstabilityincreasessharplyastheshareofvariablerenewablesincreases.Electricitymarketsshouldbedesignedtofullyvaluetheseservices,notjustelectricityproduction.Inaddition,robustcarbonpricingregimeswouldencourageamoredecarbonisedenergysystematlowestcost.Governmentinvolvementwillbeneededtofinancenewinvestment.Nuclearprojectshavelongreliedonstateownershiporaregulatedmonopolystructuretoguaranteerevenuesandreducerisktoinvestorsbecausethereisrarelysufficientprivatesectorfinanceforsuchcapital-intensiveandlong-livedassets,particularlythoseexposedtosignificantpolicyrisk.Innovativefinancingmechanisms,suchastherecentlyapprovedRegulatedAssetBase(RAB)modelbytheUnitedKingdom,canhelptosecureadequatefinancingwhileassigningriskstothosebestsituatedtoacceptit.MomentumbehindsmallmodularreactorsisbuildingThechallengeofnetzerohasstimulatedaburstofdevelopmentinsmallmodularreactortechnologies.IntheNZE,halfoftheemissionsreductionsby2050comefromtechnologies,includingsmallmodularreactors,thatarenotyetcommerciallyviable.SMRs,generallydefinedasadvancednuclearreactorswithacapacityoflessthan300MW,havestrongpoliticalandinstitutionalsupport,withsubstantialgrantsintheUnitedStates,andincreasedsupportinCanada,theUnitedKingdomandFrance.Thissupportmakesitpossibletoattractprivateinvestors,bringingnewplayersandnewsupplychainstothenuclearindustry.BeingsmallercanhelpSMRsfitin.Lowercapitalcosts,inherentsafetyandwastemanagementattributesandreducedprojectrisksmayimprovesocialacceptanceandattractprivateinvestmentforresearchanddevelopment,demonstrationandNuclearPowerandSecureEnergyTransitionsExecutivesummaryPage11IEA.Allrightsreserved.development.SMRscouldalsoreusethesitesofretiredfossilfuelpowerplants,takingadvantageofexistingtransmission,coolingwaterandskilledworkforces.Otheropportunitiesincludeco-locationwithindustrytoprovideelectricity,heatandhydrogen.Policyandregulatoryreformsareneededtostimulateinvestment.Thesuccessfullong-termdeploymentofSMRshingesonstrongsupportfrompolicymakersandregulatorstoleverageprivatesectorinvestment.AdaptingandstreamlininglicensingandregulatoryframeworkstotakeSMRattributesintoaccountiskey.Internationalharmonisationoflicensinganddefinitionsareessentialtodevelopingaglobalmarket.Securingprivatefinancingwillrequirearobustandtechnology-neutralpolicyframework,includingintheareaoftaxonomiesandenvironmental,socialandgovernancethatwillhaveagrowinginfluenceonfinancialflows.DecisionsareneedednowforSMRstoplayameaningfulpartinenergytransitions.Whileonlyasmallnumberofunitsarelikelytostartoperatingthisdecade,withrecentmomentumSMRscouldstartplayingasignificantroleinenergytransitionsinthe2030s,providedthatregulatoryandinvestmentdecisionsaremadenow,andcommercialviabilityisdemonstrated.Thisistruebothforsmallevolutionaryreactorsthatcouldachieveeconomiccompetitivenessmorereadily,butalsofortheadvancedreactormodels.NuclearPowerandSecureEnergyTransitionsExecutivesummaryPage12IEA.Allrightsreserved.PolicyRecommendationsThefollowingrecommendationsaredirectedatpolicymakersincountriesthatseeafuturefornuclearenergy.TheIEAmakesnorecommendationstocountriesthathavechosennottomakeuseofnuclearpowerandfullyrespectstheirchoice.•Extendplantlifetimes.Authoriselifetimeextensionsofexistingnuclearpowerplantssotheycancontinuetooperateforaslongassafelypossible.•Makeelectricitymarketsvaluedispatchablelowemissionscapacity.Designelectricitymarketstoensurenuclearpowerplantsarecompensatedinacompetitiveandnon-discriminatorymannerfortheavoidanceofemissionsandtheservicestheyprovidetomaintainelectricitysecurity,includingcapacityavailabilityandfrequencycontrol.•Createfinancingframeworkstosupportnewreactors.Setupriskmanagementandfinancingframeworkstomobilisecapitalfornewplantsatanacceptablecostandwithfairsharingofrisksbetweeninvestorsandconsumers.•Promoteefficientandeffectivesafetyregulation.Ensurethatsafetyregulatorshavetheresourcesandskillstoundertaketimelyreviewsofnewprojectsanddesigns,developharmonisedsafetycriteriafornewdesigns,andengagewithpotentialdevelopersandthepublictoensurethatlicensingrequirementsareclearlycommunicated.•Implementsolutionsfornuclearwastedisposal.Involvecitizensinprioritisingapprovalandconstructionofhigh-levelwastedisposalfacilitiesincountriesthatdonotyethavethem.•Acceleratethedevelopmentanddeploymentofsmallmodularreactors.IdentifyopportunitieswhereSMRscouldbeacost-effectivelowemissionssourceofelectricity,heatandhydrogen.Supportinvestmentindemonstrationprojectsandindevelopingsupplychains.•Re-evaluateplansaccordingtoperformance.Makelong-termsupportcontingentontheindustrydeliveringsafeprojectsontimeandonbudget.NuclearPowerandSecureEnergyTransitionsIntroductionPage13IEA.Allrightsreserved.IntroductionNuclearenergycouldplayanimportantroleinensuringthattheenergysector’sjourneytonetzeroemissionsisrapidandsecure.WhilewindandsolarPVareexpectedtoleadthedecarbonisationoftheglobalpowermix,flexibleanddispatchable1resourceswillberequiredtocomplementthesesupplies.Thereareeconomicandtechnicalchallengestobeovercome,andnotallcountrieswillpursuenuclearenergyasanoption,butrisingclimateambitionsinmanycountriesandtoday’senergycrisisofferreasonstotakeafreshlookatwhatnuclearenergycandeliver.Thisreportassessesthecontributionthatnuclearcanmakeandtheconditionsthatwouldneedtobemetfornuclearpowertorealiseitspotentialinasecureandcost-effectiveway.Itbuildsontheanalysisinour2019report,NuclearPowerinaCleanEnergySystem,whichfocusedontheroleofnuclearpowerindevelopedeconomiesandtheprospectsforlifetimeextensionsofexistingplants–alowcostoptiontosustaincleanelectricitysupplytoday.Sincethatlastreport,thepolicylandscapehasshiftedinwaysthatfavournuclearenergy.Manycountriesarerecognisingthatabroadsuiteoflow-carbontechnologyoptionswillberequiredtomeetambitiousclimatepolicygoals.Nuclearenergyalsobringsdividendsforenergysecurity,animportantconsiderationatatimeofheightenedattentiontothisissueinthewakeofRussia’sinvasionofUkraine.Thisreportaddressesanumberofquestions,including:Whatisthepotentialforgrowthinnuclearenergyinthosecountriesthatdecidetopursueitaspartoftheirtransitiontoacleanenergysystem?Whatistheeconomicvalueofnuclearpowerandwhatelementsofmarketdesignareneededforthistoberealised?Whatarethecostmetricsthatnuclearpowerneedstohittoachievethispotential?Whatotherfinancialmeasureswouldbeneededtosupportnuclearexpansion?Howcansmallmodularreactors(SMRs)complementexistingtechnologiesandwhatmeasureswillensurethattheyaresafe,economicanddeployedinatimelymannerforelectricitygenerationandforthesupplyofheatandhydrogen?1Electricitythatcanbeproducedanddispatchedtothesystemasandwhenrequired.NuclearPowerandSecureEnergyTransitionsNuclearpowerintheworldtodayPage14IEA.Allrightsreserved.1.NuclearpowerintheworldtodayNuclearremainsaleadingsourceofcleanelectricityNuclearpowermadeupabout10%ofglobalelectricitygenerationin2020.Thissharehasdeclinedfrom18%inthelate1990s,butnuclearisstillthesecond-largestsourceoflowemissionselectricity(i.e.non-fossil-based)afterhydroelectricityandtheleadingsourceinadvancedeconomies.2In2020,nuclearelectricitystillexceededthetotalcombinedcontributionofwindandsolarPVgenerationworldwide,despitemassivegrowthinthoserenewablesources.Attheendof2021,therewere439nuclearpowerreactorsinoperationin32countriesaroundtheworld,withacombinedcapacityof413GW.Around270GWofthatcapacitywasinadvancedeconomies.Lowemissionselectricitygenerationbysourceworldwide,2020IEA.Allrightsreserved.Note:CSP=concentratingsolarpower;CCUS=carboncapture,utilisationandstorage.Source:IEA(2021),WorldEnergyOutlook2021.NuclearpowerhasmadeamajorcontributiontoslowingtheriseinglobalemissionsofCO2sincethe1970s.Around66GtofCO2wasavoidedgloballybetween1971and2Australia,Canada,Chile,the27membersoftheEuropeanUnion,Iceland,Israel,Japan,Korea,Mexico,NewZealand,Norway,Switzerland,Turkey,theUnitedKingdomandtheUnitedStates.010002000300040005000HydroNuclearWindSolarPVBioenergyGeothermalCSPMarineCoalwithCCUSTWhNuclearPowerandSecureEnergyTransitionsNuclearpowerintheworldtodayPage15IEA.Allrightsreserved.2020.3Withoutthecontributionofnuclearpower,totalemissionsfromelectricitygenerationwouldhavebeenalmost20%higherandtotalenergy-relatedemissions6%higheroverthatperiod.Advancedeconomiesaccountedforover85%oftheseavoidedemissions:20Gt,orover40%oftotalemissionsfromelectricitygeneration,intheEuropeanUnionand24Gt,or25%,intheUnitedStates.Withoutnuclearpower,emissionsfromelectricitygenerationwouldhavebeenaroundone-quarterhigherinJapanandabout50%higherinKoreaandCanada.CumulativeCO2emissionsavoidedbynuclearpowerbycountry/regionIEA.Allrightsreserved.MarketleadershipisshiftingawayfromadvancedeconomiesAlmost70%oftheglobalreactorfleetisinadvancedeconomies,butthisfleetisageing.Therearebigdifferencesintheaverageageofnuclearcapacityacrossregions,rangingfromjust5yearsinthePeople’sRepublicofChina(hereafter“China”)to15yearsinIndia,36yearsinNorthAmericaand38yearsinEurope.MarketleadershiphasbeenshiftingtotheRussianFederation(hereafter“Russia”)andChina:27ofthe31reactorsthatbeganconstructionsince2017areofRussianorChinesedesign.3Thisassumesthatothersourcesofelectricitythatwereexpandingalongsidenuclearpowerwouldhavebeenscaledupproportionallyinitsplace.010203040506070197119801990200020102020GtEmergingmarketanddevelopingeconomiesOtheradvancedeconomiesCanadaKoreaJapanUnitedStatesEuropeanUnionNuclearPowerandSecureEnergyTransitionsNuclearpowerintheworldtodayPage16IEA.Allrightsreserved.Agedistributionofoperationalnuclearcapacitybyregion,endof2021IEA.Allrightsreserved.Note:OECDEuropeincludesBelgium,CzechRepublic,Finland,France,Germany,Hungary,Lithuania,Netherlands,Slovakia,Slovenia,Spain,Sweden,SwitzerlandandtheUnitedKingdom.OECDAmericasincludesCanada,MexicoandtheUnitedStates.OECDAsiaincludesJapanandKorea.Source:IAEAPowerReactorInformationSystem(PRIS).Investmentinnuclearpowerinadvancedeconomieshasstalledoverthelasttwodecadesbecauseofhighcostsofnewprojects,longconstructiontimes,unfavourableelectricitymarketandpolicyenvironments,and,insomecountries,alackofpublicconfidenceaftertheaccidentattheFukushimaDaiichiNuclearPowerStation.Constructionoffirst-of-a-kindGenerationIIIreactors4hasbeensubjecttodelaysandsignificantcostoverruns.Thecompetitivenessofnewnuclearpowerplantsisfurtherunderminedbythefactthatmostpowermarketsstilldonotadequatelyremuneratethelowemissionsanddispatchableattributesofnuclearpower.Retirementsofnuclearpowerplantsaresettoaccelerateinthecomingyears,particularlyinadvancedeconomies,asexistingplantsreachtheendoftheiroperatinglicences,areforcedtocloseduetopolicy-drivenphase-outsorceaseoperationforeconomicreasons.Lifetimeextensionswill,nonetheless,slowthepaceofretirementstosomedegree.Forexample,theUnitedStateshastodateissued20-yearextensionsoftheoriginal40-yearoperatinglicencesfor88ofthecountry’s93reactorscurrentlyinoperation,while11reactorshaveappliedforafurther20-yearextension,bringingtheirlifetimesto80years.Francehasdevelopedarolling10-yearextensionprogrammeforplantsthatmeetsafetyrequirements,whileplantsinHungary,Finland,theCzechRepublicandtheUnitedKingdomhavealsorecentlyreceived20-yearextensions.Intotal,theseextensionshavealreadypreventedtheclosureofnearly4Thisgenerationofreactorsaimstoenhancesafety,relativetotheprecedinggeneration,byincorporatingdesignchangesthatlowertheriskofasevereaccidentand,shouldasevereaccidentoccur,byusingappropriatemitigationsystemstolimititsimpactonthepopulationandtheenvironment.015304560024681012141618202224262830323436384042444648>50GWAge(years)OECDEuropeOECDAmericasOECDAsiaRussiaChinaIndiaNuclearPowerandSecureEnergyTransitionsNuclearpowerintheworldtodayPage17IEA.Allrightsreserved.one-quarteroftotalcapacitythatwouldotherwisehaveoccurredby2020,asharethatrisestoalmost40%by2030.Investmenthasstartedtorecover,drivenmainlybyChinaandRussiaNuclearpowercapacityadditionsdwindledduringthe2000s,butarenowstartingtopickup,particularlyinChinaandRussia.Capacityadditionspeakedinthe1980s,when230GWofnewnuclearpowerplantswerebroughtonlineacrosstheglobe,primarilyinEuropeandNorthAmerica.Butnewconstructionslowedsharplyinthe1990sinthewakeofthemajornuclearaccidentsatThreeMileIslandintheUnitedStatesin1979andChernobylinSoviet-eraUkrainein1986,withjust25GWofnewcapacityadded.Capacityadditionsreboundedto46GWinthe2000sand56GWinthe2010s,despitetheimpactofthe2011FukushimaDaiichiaccidentinJapan(muchofthecapacityaddedsincethenwasalreadyunderconstruction).Another6GWwascommissionedin2020and5.6GWin2021.Chinacontributedmostofthecapacitythatcameonlinesince2010.2021sawasurgeinconstructionstarts,withtenunitsbreakinggroundcomparedtothefourtofiveperyearthathadbeentypicalinrecentyears.Overall,thereare52reactorscurrentlyunderconstruction,totalling54GWofcapacity.Chinaiscurrentlybuilding16.1GW,Korea5.6GW,Turkey4.4GW,India4.2GW,Russia3.8GW,theUnitedKingdom3.3GWandothercountriescombined16.6GW.Ofthe31reactorsthatcommencedconstructionsincethebeginningof2017,27oftheseareeitherofRussiandesign(17)orChinesedesign(10)withtwoofEuropeandesignunderconstructionintheUnitedKingdomandtwoKorean-designedunitsinKorea.Russiadominatestheexportmarket:alltenChinese-designedunitsarebeingbuiltinChina,onlythreeRussian-designedunitsbeganconstructioninRussia,withthereststartingconstructioninTurkey(3),India(4),China(4),Bangladesh(2)andIran(1).Russia’sinvasionofUkraineraisesquestionsabouttheexportprospectsforRussian-builtnuclearplants.Finlandhascancelledacontract,signedin2013,forRosatomtobuildaplantinFinland,citingdelaysandincreasedrisksduetothewarinUkraine.NuclearPowerandSecureEnergyTransitionsNuclearpowerintheworldtodayPage18IEA.Allrightsreserved.Nuclearpowerconstructionstartsbynationaloriginoftechnology,2017-2022IEA.Allrightsreserved.Source:IAEAPowerReactorInformationSystem(PRIS).Netzeropledgesarerevivinginterestinnuclear’spotentialThenumberofcountrieswithnetzerotargetshasincreasedrapidlyoverthelastfewyears.Morethan70countries,covering76%ofglobalenergy-relatedCO2emissions,havenowadoptedsuchapledge,coveringeitherCO2orgreenhousegasemissionsmorebroadly.Thiscompareswithonlysixcountriesattheendof2018.Inaddition,morethan60othercountrieshavepledgedtoreachnetzeroorcarbonneutrality,butwithoutspecifyingatimeframe.Thesepledgesarenotyetunderpinnedbyallthespecificpoliciesandmeasuresthatwillberequiredfortheirrealisation,buttheyarepromptingdeliberationsonthemixoflowemissionstechnologies,includingenergyefficiency,thatcanmovecountriestowardsthesegoals.Nuclearenergyhasbeenoneofthebeneficiaries.Significantdevelopmentsinsupportofnuclearpower2020-2022CountryPolicyUnitedStates•Aspartofthe2022CivilNuclearCreditProgram,aUSD6billioninvestmenttohelppreservetheexistingU.S.reactorfleet.•AllocationofUSD8billiontodemonstratecleanhydrogenhubs,includingatleastonehubdedicatedtotheproductionofhydrogenwithnuclearenergy.•FollowingtheAdvancedReactorDemonstrationProgram,atotalofUSD3.2billioninvestmentoversevenyearsontwonuclearprojects.0246810201720182019202020212022YeartodateNumberofreactorstartsOtherChineseRussianNuclearPowerandSecureEnergyTransitionsNuclearpowerintheworldtodayPage19IEA.Allrightsreserved.CountryPolicyCanada•The2020SMRActionPlanlaysoutthestepsforthedeploymentofSMRs.Severalprojectshaveobtainedfederalandprovincialgovernmentfunding.•AnnouncementofanSMRprojectatDarlingtonbasedonGE-Hitachitechnologytobecommissionedbythelate2020s.France•FollowingtheFrance2030investmentplan,announcementtoextendthelifetimeofallnuclearreactorsthatcanbeextendedwhileensuringsafety.•Announcementofplanstobuildsixnewlargereactorsstartingin2028atacostofaroundEUR50billion,withanoptiontobuildeightmoreby2050.•AEUR1billioninvestmenttodevelopinnovativereactors,includingasmallmodularreactorby2030.UnitedKingdom•Aspartofthe2022EnergySecurityStrategyambitionsforeightnewlargereactors,aswellassmallmodularreactors,toachievenucleargenerationcapacityof24GWby2050,oraround25%oftheforecastelectricitydemand.•TheNuclearEnergy(Financing)Act,enactedin2022,madeaprovisionfortheimplementationofaregulatedassetbasemodel.•In2021agovernmentcommitmentofGBP210millioninfundingtodevelopanSMR,matchedbyGBP250millioninprivateinvestment.Belgium•InMarch2022,theBelgiangovernmentdecidedtotakethenecessarystepstoextendthelifetimeoftworeactorsbyadecadethrough2035.Netherlands•Discussionsin2022ontheconstructionoftwonewnuclearstations.Poland•The2020PolishNuclearPowerProgrammeplanstheconstructionoflargereactorswithatotalcapacityofbetween6GWand9GW.•In2022thegovernmentagreedtothedeploymentofSMRsbasedonUStechnologytoreplaceexistingcoal-firedco-generationplants.Korea•Thenewgovernmentelectedin2022planstosupportlifetimeextensionsofcurrentfacilities,restartconstructionattwosites,developandenhancecooperationonSMRs,seektobuildtenplantsoverseasby2030.Japan•In2022,thegovernmentannounceditwouldincreaseenergysecuritywithaviewtorestartexistingreactorsprovidedtheyaresafe.China•Underthe14thFiveYearPlanperiod(2021-2025),maintainasteadypaceofconstructionsettingthegoalofabout70GWby2025,versus53GWatthebeginningof2022.India•Startofconstructionofanewtenreactorfleetexpectedbetween2023and2025,foratotalof9GW.•PoliticalstepstowardstheconstructionofsixlargereactorsusingFrenchtechnology.NuclearPowerandSecureEnergyTransitionsNuclearpowerintheworldtodayPage20IEA.Allrightsreserved.Renewables,particularlywindandsolarPV,aretypicallyforeseenasprovidingthelargestsourcesofelectricityascountriesmovetoanetzerofuture.However,agrowingnumberofcountrieshavealsoannouncedplanstosupportnewnuclearinvestment.Forexample,PresidentMacronofFranceannouncedinFebruary2022planstobuildsixnewlargereactorsstartingin2028atacostofaboutEUR50billion,withanoptiontobuildeightmoreby2050.TheFrenchgovernmentpreviouslypledgedEUR1billiontodevelopinnovativereactors,includingasmallmodularreactorby2030.Chinaplanstocontinueitscurrentpaceofconstructionofnuclearreactorsinordertohelpmeetitsgoalofcarbonneutralityby2060.Thenewly-electedPresidentofKoreamadeanelectionpledgetoreversethecountry’snuclearphase-outbysupportinglifetimeextensionsofcurrentfacilitiesandrestartingconstructionattwositeswhilealsoseekingtobuildtenplantsoverseasusingKoreantechnologyby2030.Today’sfocusonenergysecurityprovidesanopeningfornuclearDeploymentofnuclearenergyincreasesthediversityoftheenergymix,canfacilitatetheriseofvariablerenewablessuchaswindandsolar,andalsoprovidesanopportunity–atscale–toreducerelianceonfossilfuels.Theoilsecuritycrisisofthe1970sspurredthefirstwaveofnuclearnew-builds:inthedecadethatfollowedthefirstoilshock,constructionstartedonalmost170GWofnuclearpowerplants;theseplantsstillrepresent40%ofthenuclearcapacitythatisoperatingtoday.Ifpolicysupportisforthcomingandcostsarekeptundercontrol,therenewedinterestinnucleartodaycouldpointinasimilardirection.Russia’sinvasionofUkrainehasexacerbatedthetightnessthatwasalreadyapparentinfuelmarketsaroundtheworld.Thishasinturndrivenupelectricityprices.AccordingtotheEuropeanUnionAgencyfortheCooperationofEnergyRegulators(ACER),retailelectricitypriceswereonaverage30%higheryear-on-yearinFebruary2022,withpricesincreasingthemostinplacesthatdependheavilyonnaturalgasinpowergeneration,likeMadrid,wheretheyhaverisen55%,andRome(80%).Europe’spushtodiversifyawayfromRussiansupplycouldmaintainupwardpressureonfuelpricesforsometimetocome.Nuclearenergyisoneoftheoptionsthatcanbedeployedbygovernmentstoreducerelianceonfossilfuelsforthepowersector,inparticularfornaturalgas.Forexample,Korea’splanstolifttheshareofnuclearinKorea’stotalgenerationwould,inourassessment,reducenaturalgasuseintheelectricitysectorby5bcmto7bcmperyearwithinthenextdecade.NuclearPowerandSecureEnergyTransitionsNuclearpowerintheworldtodayPage21IEA.Allrightsreserved.ImpactofKorea’spolicyreversalonnuclearpowercapacityIEA.Allrightsreserved.Sources:IEAAnalysisbasedonIEA(2021)WorldEnergyOutlook2021.Manycountrieswithnuclearreactorsdependonimporteduraniumforfuel.However,nuclearpowerplantsneedtorefuelinfrequently,reducingexposuretoshort-termdisruptions,andfuelcanbestoredforafewyearsbeforebeingused.ChallengestoanexpandedrolefornuclearAttractingincreasedinvestmentinnuclearenergywillhingeoneffortstomanageandallocatetherisks,whichincludeprojectrisks,suchasthoserelatedtotheconstructionofplantsandtechnology,politicalrisk,regulatoryrisk,operationalriskandmarketorpricerisk.Conventionalnuclearplantsarelargeandhighlycapital-intensive,involvinglongleadtimesandcomplexconstructionworks.Theserisksdirectlyaffectthecostofcapital,andultimatelythelevelisedcostofelectricity,byincreasingthereturnsdemandedbyinvestorstoaccountforthem.Likeotherprojectsofsimilarcomplexity,nuclearprojectscancarrysubstantialrisksofdelays,particularlyforfirst-of-a-kindunits.Oncebuilt,marketriskscanalsobesubstantialasthesemaydependontheelectricitymarketdesign,whichcanchange,orpolicyinterventionsthataffectprofitability.Governmentshavemaderenewedeffortstoidentify,mitigateandassigntheseriskstothevariousstakeholdersthroughfinancingsupportmechanismslikedirectfinancialsupport,powerpurchaseagreements,andregulatedmodels.ConstructioncostsandleadtimeshaveriseninadvancedeconomiesRisingconstructioncostsandleadtimeshaveplaguedthenuclearindustryinmanycountriesinrecentyears.Thereisawidevariationintheaverageconstructiontimefornuclearreactorsacrosscountries,historically.Thenuclearreactorsinoperation010203040202020252030GWPreviouspolicyNewpolicyNuclearPowerandSecureEnergyTransitionsNuclearpowerintheworldtodayPage22IEA.Allrightsreserved.aroundtheworldtodaytookonaveragesevenyearstobuild,but15ofthemtook15yearsormore,while152werebuiltinfiveyearsorless.Countrieswithmaturenuclearprogrammes,liketheUnitedStates,Canada,France,China,KoreaandJapanhavegenerallybeenabletocompleteconstructionmorequickly.Licensing,siteselectionandpermittinghaveusuallyaddedseveralyearstothetimeneededtocompleteeachnewnuclearreactorproject.Constructiontimesfornewnuclearpowerplantsbycountry,1967-2021IEA.Allrightsreserved.Note:Excludingtemporarypausesonconstructionactivitiesforindividualprojects.Source::IEAanalysisbasedonIAEAPowerReactorInformationSystem(PRIS).RecentnuclearpowerplantconstructionprojectsinEuropeandtheUnitedStateshaveexperiencedconsiderabledelaysandcostoverruns.VogtleUnits3and4inthestateofGeorgiawereoriginallyprojectedtocostaroundUSD4300/kWonanovernightbasisandtakefouryearstocomplete,butthemostrecentestimatehasincreasedtonearlyUSD9000/kWandtheunitsarenowexpectedtocomeonlineonlyin2023–nineyearsafterthestartofconstruction.ThesewillbethefirstAP1000unitsbuiltintheUnitedStates,addingtothefouralreadyinoperationinChina.EveninKorea,whichhashadrelativelygoodconstructionperformance,mostrecentunitshaveexperienceddelaysandcostoverruns.TheShinKori3and4pressurisedwaterreactors,thefirstAPR1400designs,werecommissionedinKoreain2016and2019respectivelyafter7.5and10yearsofconstruction,comparedwiththe5yearstheywereoriginallyexpectedtotake.0510152025IranMexicoRomaniaBrazilArgentinaUnitedKingdomSlovakiaCzechRep.SpainIndiaSouthAfricaUnitedStatesHungaryBulgariaUnitedArabEmiratesBelarusRussiaSwedenUkraineCanadaGermanyFranceChineseTaipeiPakistanSloveniaChinaBelgiumFinlandSwitzerlandKoreaRep.ArmeniaNetherlandsJapanYearsAverageMaximumMinimumNuclearPowerandSecureEnergyTransitionsNuclearpowerintheworldtodayPage23IEA.Allrightsreserved.OvernightcostandconstructiontimesforselectedrecentnuclearprojectsIEA.Allrightsreserved.Source:NuclearEnergyAgency(2020),UnlockingReductionsintheConstructionCostsofNuclear.SimilardelaysandcostoverrunshavebeenexperiencedwiththeEPR,athirdgenerationpressurisedwaterreactor,inEurope.Thisisduetoseveralfactorsincludingalowlevelofdesignmaturityattheonsetofconstruction,challengeswithprojectmanagement,regulatorychangesduringtheconstructionperiodanddelaysinpartsmanufacturingintheabsenceofanactivesupplychain.ThefirstEPRtostartconstruction,atOlkiluotoinFinlandin2005,beganproducingelectricityin2022,adelayof13yearsfromitsoriginalplanneddate.TheEPRatFlamanvilleinFrance,constructionofwhichstartedin2007,hasalsoencounteredlengthydelays.Itisnowexpectedtobecommissionedin2023.BothEPRshavecostfarmorethanoriginallyprojected.Forexample,theFlamanvilleplantisnowexpectedtocostEUR12.7billioncomparedwithaninitialestimateofEUR3.3billion.ThetwoEPRsbuiltinChina–Taishan1and2–havealsoexperiencedsignificantdelays,bothdoublingtheirconstructiontimetonineyearsthoughlimitingthefinalconstructioncosttoaroundUSD3200/kW.Reducingthecostsofconstructingnewnuclearpowerplantsandthetimerequiredtoconstructthem,particularlyinadvancedeconomies,willbevitalifnuclearpoweristoplayitspartinsupportingenergytransitions.Thesizeandthecomplexityofconstructingthecivilworksassociatedwithanuclearpowerplantaretypicallyresponsibleformuchofthedelays:thenuclear“island”,whichistheheartofthenuclearpowerplantandcontainsthecontainmentbuilding,auxiliarybuilding,andfuelhandlingarea,usuallyaccountsforlessthan20%ofthetotalcosts.Techniquestomakeiteasiertoconstructthecivilworks,suchasmodularisationandstandardisation,couldreducethecostandcomplexityofconstructionattheplantsite.Experiencehasshownthattheconstructionperiod,particularlyfor“first-of-a-kind”ShinKori3and4(Korea)Vogtle3and4(UnitedStates)Olkiluoto3(Finland)Flamanville3(France)020004000600080001000005101520USD/kW(2020)YearsInitialEstimateLatestEstimateFinalCostNuclearPowerandSecureEnergyTransitionsNuclearpowerintheworldtodayPage24IEA.Allrightsreserved.units,tendstotakesignificantlylongerthanforsubsequentunits.Conversely,onceacommitmentismadetobuildseveralunitsofthesamedesign,theconstructionperiodforthelatterunitscanfallconsiderably.InthecaseofFrance,buildingthefirstofakindoftheN4seriesrequirednearly12years,thefourthunitjustover8years–a30%reduction.Butstayingwiththesamedesignalsomattered:movingfromthepreviousseries(knownasP4)toN4resultedinanincreaseincostsandtheconstructionperiod,althoughthewholeovernightcostofconstructionoftheFrenchnuclearfleetwascontainedatunderEUR2000/kWforeachpairofreactors,5thankstoacombinationoffactorsincludingtheserieseffect,anactivenuclearindustryandtheabsenceofmajorchangesinregulatorystandards.AttractingprivatesectorfinancingishardwithoutgovernmentinvolvementDuetotheirsizeandcomplexity,nuclearprojectshavehistoricallyrelieduponsomeformofstateownershiporregulatedmonopolystructureinordertoguaranteerevenuesandreducerisktoinvestors.Alltheplantsrecentlycommissionedorenteringtheconstructionphaseinvolvecapacityinexcessof1GW.Veryfewutilitycompanybalancesheetscansupporttherisksassociatedwithbuildingandoperatingafleetofsuchlargenuclearpowerplantswithoutsomeformofguaranteefromthegovernment.Mechanismsforpolicysupporthaveincludedfeed-intariffsandcontractsfordifferences.6Alternatively,utilitiescanbeallowedtoincludenuclearfacilitiesaspartoftheirportfolioofregulatedassetstoguaranteeareturnoninvestment.TheUKgovernment,havingidentifiedtheneedfornewnuclearpowerplantsaspartofitsfuturelowcarbonenergymix,introducedtheNuclearEnergy(Financing)Act2022withtheaimofreducingthecoststhatconsumerswouldneedtopayforenergyfromnewnuclearpowerplants.Althoughmanyofthespecificmechanismswillbespelledoutinfutureregulations,theintentofthelegislationistoprovidebettervalueformoneyforconsumersbyreducingthecostofcapitalforinvestorsinnewnuclearpowerplants.Thisistobeachievedthroughprovidingtheownersoftheprojectwitharighttoaregulatedrevenuestreamduringtheconstruction,commissioningandoperatingphasesofaproject.Throughthismechanism,consumerswillbegincontributingfinanciallytoaprojectduringtheconstructionphaseandwillbesharingriskswiththeinvestorsassociatedwithcostoverruns.Asaconsequence,itisexpectedthatprojectswillbeabletoattractcapitalatamuchlowercostand,asregulatedprojects,theselowercostswillultimatelyfeedthroughtotheconsumers.Thegovernment’simpactassessmentestimatescoststoconsumerscouldfallby44%ormorecomparedtothecontract-for-differenceapproachthatwasusedtofinancetheHinkleyPointCproject.5WorldEnergyOutlook2014,Fig.10.6page367.6Financialcontracts-for-differencesinvolvingthepaymentofthedifferencebetweenafixedpriceandthesettlementpriceofacommodityoveraspecifiedperiod.NuclearPowerandSecureEnergyTransitionsNuclearpowerintheworldtodayPage25IEA.Allrightsreserved.Thecurrentmarketdesignsinmostadvancedeconomiesincreasespriceriskforinvestors,butreduceriskforendconsumerscomparedwithregulatedmarkets.Electricitypricevolatility,causedinpartbyincreasingsharesofresourceswithzeromarginalcostlikewindandsolar,butalsobyswingsingasprices,createsunevenandunpredictablereturnsformarketparticipantsunlesstheyhedgetheirexposuretomarketprices.Hedgingthisexposurethroughlong-termcontractsisonesolution,butitrequirescounterpartieswillingtoacceptpricesthatarehighenoughtoensureareturnforthenuclearpoweroperatorwellintothefuture.Remunerationfornuclear’scontributiontosecureandlowemissionspowersystemsisofteninadequateCurrentpowermarketdesignsfailtoadequatelyremuneratetwobenefitsofnuclearpowergeneration.Nuclearpowerisadispatchableresourcethatisabletogenerateduringperiodsofsystemstress,whenloadisapproachingthelevelofavailablesupplycapacity.Thiscontributestothesecureoperationofthesystem,avoidingcostlyoutagesthatcauseeconomicandsocialharm.Thisservicecouldbecompensatedthrougheitheraseparatecapacitypaymentorthroughunfetteredmarketpricingarrangementsthataccountfullyfortheabilityofresourcetosecureagainstsheddingload,sometimescalled“scarcitypricing”.However,mostmarketstodaylimitpricesfromreachingthelevelsassociatedwiththevalueoflostloadthroughpricecaps,andwithoutasupportingcapacitymechanism,depriveoperatorsofdispatchablecapacityofrevenues7.Mostpowermarketsalsofailtorewardthelow-carbonattributesofnuclearpower.Wheretheyexist,carbonpricesrarelyapproachthelevelsneededtoreachnetzeroemissions.Forexample,themostrecentauctionofallowancesfortheRegionalGreenhouseGasInitiative,whichcovers11statesintheeasternUnitedStates,yieldedaCO2priceofjustUSD13/t–farbelowthepricesthatarerequiredtospurdeepdecarbonisation.Inaddition,inmanycountriessupportforcleanenergyproductionlikeproductionandinvestmenttaxcreditsandfeed-in-tariffsexcludesnuclearpowerfromsubsidiesorothersupportmechanismsthatareavailabletowindandsolar.AgeingfleetsrequiremaintenanceworkthatreducesavailabilitySomecountries,includingFrance,theUnitedKingdomandKorea,haveseentheavailabilityoftheirplantsdeclinesince2015,duemainlytotheneedtocarryoutworktoextendlifetimesand,insomecases,unplannedshutdowns.InFrance,the7Governmentsandconsumershavedifficultiesacceptinghighandunstableelectricityprices.Forexample,SpainandPortugalrecentlysetapricecapofEUR50/MWhforgasinresponsetotherecentjumpinpricesandsomegovernmentshavecalledforscrappingthemarginalpricingsystementirely.ACER’srecentassessmentoftheEUwholesalemarketconcludesthatthecurrentmarginalprice-basedmarketdesignshouldberetainedandcautionsthatill-designedinterventionscouldendangerthebenefitsofmarketintegration,whichtheyestimatetobeworthapproximatelyEUR34billionperyearthroughefficienciesgainedbycross-bordertrading.NuclearPowerandSecureEnergyTransitionsNuclearpowerintheworldtodayPage26IEA.Allrightsreserved.availabilityfactor8ofnuclearplantsdroppedto54%inMarch2022.Therecentdeclineisduetoacombinationoffactors,includingthepeakoftheGrandCarénageprogramme,whichaimstoextendtheoperatinglifetimesofmostreactorsbeyond40yearsbymeansoflarge-scalerenovationwork,rescheduledmaintenanceoutagesaftertheCovid-19crisisandunplannedoutagestoinvestigatesignsofcorrosionfoundinpipesinatleast9ofthecountry’s56operatingreactors.Bycontrast,intheUnitedStates,wherenuclearplantshaveasimilarageprofiletothoseinFrance,theaverageavailabilityfactorwasbroadlyconstantuntiltheyear2000andhassinceincreased,reaching91%in2020.AveragenuclearcapacityavailabilitybycountryIEA.Allrightsreserved.Source:IAEAPowerReactorInformationSystem(PRIS).Somecountriesruleoutnuclear,largelyduetoconcernsoversafetyandwastemanagementSomecountrieshavedecidedtophase-outtheuseofnuclearpower,primarilyduetopublicconcernsaboutsafetyissues(notnecessarilyintheirowncountry).Publicsupportwanedinmanycountriesaftereachofthethreemajornuclearaccidents,atThreeMileIsland,ChernobylandFukushimaDaiichi.Inthosecountriesthathaveretainednuclear,therearestrongrequirementsonindustrytoenhancesafety.TheFukushimaDaiichiaccidentin2011promptedcountriestore-evaluateandstrengthennuclearsafetyandemergencypreparedness.Safetyinspectionsor“stresstests”werecarriedoutatexistingreactorsinmanycountriesandcertaintypesofreactorswereorderedtomakesafetymodifications.Theseconsiderationsledseveralcountriestoadjusttheirplanneduseofnuclearpower.Germany,whichhadbuilt36nuclearreactorswithacombinedcapacityof30GW,subsequentlyacceleratedthephasedclosureofallthiscapacity.Mostofthereactorshavealreadyshut,andthethreestilloperatingareduetoclosebytheendof2022.ElsewhereinEurope,8Theshareofinstalledcapacitythatareavailabletogenerateatanygiventime.405060708090100197019801990200020102020PercentFranceUnitedStatesFinlandUnitedKingdomChinaKoreaNuclearPowerandSecureEnergyTransitionsNuclearpowerintheworldtodayPage27IEA.Allrightsreserved.Spain,SwedenandSwitzerlandhavealsoannouncedthegradualphase-outornon-replacementoftheirnuclearfleets.InJapan,manyofthenuclearplantsthatwereshutaftertheFukushimaDaiichiaccidenthavenotyetrestartedoperation,andtheshareofelectricitygenerationfromnuclearhasdroppedasaresultfromahighof35%in2002toaround5%today.TheaccidentatFukushimaDaiichidrewglobalattentiontotherisksandpotentialcostsofanuclearaccident.Thedecisiontoidleorcloseotherreactorsnecessitatedincreasedthermalpowergeneration,whichledtosubstantialfossil-fuelimportcosts,contributingtoarecordhightradedeficit,andhigherCO2emissions.OfficialinvestigationsintotheFukushimaDaiichiaccidentconcludedthattheaccidentcouldandshouldhavebeenforeseenandprevented.Itstressedtheneedtoimprovethecompetenceandindependenceoftheregulatorybody.Thisunderscoresthefactthataneffectiveregulatoryframeworkandsound,independentregulatoryoversightareprerequisitesforthesafeoperationofanuclearfleetandcriticaltoestablishingandmaintainingpublicconfidenceinnuclearpower.Thesafedisposalofspentfuelandotherradioactivewastematerialremainscriticaltothepublicacceptanceofnuclearenergyprogrammes.Spentfuelrodsthathavebeenremovedfromthereactorcoreremainhighlyradioactiveandcontinuetogeneratelargeamountsofheatfordecades.Publicacceptanceofthelong-termstorageofhigh-levelwasteiskey.Currently,47%ofspentfuelworldwideisstoredonsiteatnuclearpowerplants,usuallyinlargeconcrete-linedwatertanks.Fewcountrieshavedevelopedlong-termsolutionsforrecyclingand/orthegeologicaldisposalofspentfuel,mainlyduetothelargeinvestmentsinvolvedandhardpoliticaldecisionsonsiting.TimelinefordeepgeologicalnuclearwastestoragefacilitiesinselectedcountriesCountryApplicationsubmittedConstructionlicencegrantedStartofconstructionFinland201220152016France20212025(e)2022(e)Sweden20112022(e)Early2023(e)China2041(e)Canada2028(e)2032(e)Switzerland2024(e)2031(e)Note:(e)=estimate.Source:NuclearEnergyAgency(2020),ManagementandDisposalofHigh-LevelRadioactiveWaste:GlobalProgressandSolutions.SafedecommissioningofplantsmustalsobeensuredDecommissioningisparticularlyimportantinthecaseofanuclearpowerplantgiventheneedtosafelymanageradioactivematerials.Itincludesallactivitiesfromshutdownandremovaloffissilematerialstoenvironmentalrestorationofthesite.NuclearPowerandSecureEnergyTransitionsNuclearpowerintheworldtodayPage28IEA.Allrightsreserved.Costsdependonmanyfactors,includingthedecommissioningschedule,theplantlocation,thearrangementsforthestorageanddisposalofnuclearwaste,thelevelofdecontaminationrequired,legalrequirements,anycostescalationandtheassumeddiscountrate.Thisrangeofplant-specificcostdriversandtherelativelylimitedexperienceincompletingdecommissioningprojects,albeitincreasinginrecentyears,leavesomeuncertaintyastothemagnitudeoftheexpecteddecommissioningcosts.Mostcountrieslegallyrequireutilitiestoarrangeadequatefundingfordecommissioningactivities,withregulatorsplayingamajorroleinapprovingthemechanismtosecurefundingandtheamounttobesetaside.Foranuclearpowerplantbuilttoday,thedecommissioningcostisassumedinouranalysistobearound15%oftheplantinvestmentcost(inrealterms).Whenfundsarecollectedduringtheoperationofanuclearpowerplant,thesecostsrepresentasmallpercentageofelectricityrates.Anincreaseinthedecommissioningcostofanuclearpowerplantfrom15%to25%oftheinvestmentcost,raisesgeneratingcostsbyjustaround1%.Russia’sinvasionofUkrainecouldalsohavenegativeconsequencesHeightenedenergysecurityconcernsresultingfromRussia’swarinUkrainecouldbolsterthecasefornuclearenergyinsomecountriesastheyseektoreducerelianceonexpensiveandvolatilefossilfuelsandacceleratetransitions.However,itcouldalsohavenegativeimpacts.AsidefromtheeffectsonpublicopinionofactiveconflictinthevicinityofUkraine’snuclearfacilities,theconflictraisesquestionsaboutRussia’sfutureasaproducerandexporterofnuclearfuelsupplies.ThroughtheRosatomsubsidiaryTVEL,Russiasuppliesnuclearfuelto73Russian-designed(VVER)reactorsinsideRussiaandinothercountries,includingUkraine,Belarus,Armenia,Bulgaria,Finland,theCzechRepublic,Hungary,Slovakia,China,IndiaandIran,makinguparound16%oftheworldmarketin2020.CEZ,theCzechstate-ownedelectricutility,recentlyannounceditwillobtainitsfuelsuppliesforitsTemelinnuclearpowerstationfromtwowesternsuppliersfrom2024.Russiaplaysanevenmoresignificantroleintheproductionofuraniumfuel,accountingfor38%ofuraniumprocessing(conversion)worldwideandover45%offuelenrichmentcapacityin2020.MuchoftheuraniumprocessedandenrichedbyRussiaissourcedfromKazakhstan,whichwasresponsiblefor41%ofglobaluraniumproductionin2020.Euratom,whichmonitorsEuropeanuraniumtrade,estimatesthatRussiancompaniesprovidedabout24%ofuraniumconversionservicesand25%ofenrichmentservicestoEUutilitiesin2020.AFrenchcompany,Orano,suppliesthemajorityofenrichmentservicesandthelargestshareofconversionservicestothoseutilities,whileCanadaandtheUnitedStatesarealsosignificantsuppliersofconversionservicestothem.NuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage29IEA.Allrightsreserved.2.TheroleofnuclearenergyontheroadtonetzeroemissionsOpportunitiesfornuclearinenergytransitionTherearefivefeaturesofthejourneytonetzeroemissions,commontoalmostallscenariosthatmeetexactingclimategoals,thatopenupopportunitiesfornuclearenergy:Widespreadelectrificationofend-uses,withelectricitytakingprogressivelyhighersharesoffinalconsumption.Rapidgrowthinlowemissionselectricitygeneration.Theneedtocurbemissionsfromheatproduction.Fast-growingdemandforlowemissionshydrogen.Thecontinuedneedtosupportinnovation,whichfacilitatesthedevelopmentofadvancednucleartechnologies.ThischapterexploresthecontributionofnuclearenergyintheseareaswithreferencetotheIEA’sNetZeroEmissionsby2050Scenario(NZE)9,whichshowswhatisneededfortheglobalenergysectortoachievenet‐zeroCO2emissionsby2050.AlongsidecorrespondingreductionsinGHGemissionsfromoutsidetheenergysector,thisisconsistentwithlimitingtheglobaltemperatureriseto1.5°Cin2100withoutatemperatureovershoot(witha50%probability).TheglobalemissionspathwayintheNZErepresentsasignificantdeparturefromatrajectorybasedontoday’spolicysettings.ThisisdescribedintheStatedPoliciesScenario(STEPS),whichtakesaccountofpoliciesandtargetscurrentlyinplacebutnotpledgesorannouncementsnotyetbackedbyimplementationplans.ItisalsoverydifferenttothatintheUpdatedAnnouncedPledgesScenario(UAPS),inwhichcountriesandcompaniesareassumedtomeetalltheirannouncedpledgestocutemissions,includingthosemadeatthe26thConferenceoftheParties(COP26)inGlasgowinNovember2021andsubmittedasNationallyDeterminedContributions(NDCs)undertheParisAgreementtotheUnitedNationsFrameworkConventiononClimateChange(UNFCCC),ontimeandinfull.Globalemissionsplateauanddeclineonlyslightlyby2050intheSTEPS(seeWorldEnergyOutlook2021formoredetails),whichisconsistentwithaglobaltemperatureincreaseof2.6degreesCelsius(°C)abovepre-industriallevelsin2100.EmissionsfallmuchmoreintheUAPS,byaround18Gtin2050,consistentwithaglobaltemperatureincreaseof1.8°C.9TheNZEissetoutindetailinourlandmarkreport,NetZeroby2050:aGlobalRoadmapfortheEnergySector,releasedin2021.NuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage30IEA.Allrightsreserved.GlobalenergysectorCO2emissionsbyscenario,2000to2050IEA.Allrightsreserved.Note:Energysectoremissionsincludesthosefromthecombustionoffossilfuelsandindustrialprocesses.Sources:IEA(2021),WorldEnergyOutlook2021;IEAanalysisbasedonIEA(2001),COP26ClimatePledgesCouldHelpLimitGlobalWarmingto1.8°C,butImplementingThemWillBetheKey.ThefiveopportunitiesarisingfornuclearenergyinthenetzerotransitionarecharacterisedintheNZEinthefollowingterms.ElectrificationasakeypillarofdecarbonisationTheuseofelectricityinplaceofunabatedfossilfuelshelpstocutglobalenergysectorCO2emissionsin2050byabout7GtintheNZE,accountingfor20%ofthetotalreduction.Globalelectricitydemandincreasesfromabout23000TWhin2020toover60000TWhin2050,withtheshareofelectricityintotalfinalconsumptionjumpingfrom20%tonearly50%.Merchanthydrogenproductionistheleadingdriveroftheincreaseinglobalelectricitydemand,addingover12000TWh–anamountgreaterthanthetotalelectricitydemandinadvancedeconomiestoday.Amongend-usesectors,industryseesthelargestincreaseinelectricityconsumptionatalmost11000TWh,mainlyinlowandmediumtemperatureapplications,primarilyinlightindustry.Rapidgrowthinthefleetsofelectriccars,busesandtruckspushesupglobalelectricityuseintransportbyover9000TWh.Therestoftheincreasecomesfromtheelectrificationofotherend-uses,includingheatinginbuildingsandcooking.010203040200020102020203020402050GtStatedPoliciesUpdatedAnnouncedPledgesNetZeroEmissionsby2050NuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage31IEA.Allrightsreserved.GlobalelectricitydemandandshareofelectricityintotalenergyconsumptioninselectedapplicationsintheNetZeroEmissionsby2050ScenarioIEA.Allrightsreserved.Source:IEA(2021),NetZeroby2050:ARoadmapfortheGlobalEnergySector.Emergingmarketanddevelopingeconomies(EMDEs)makeupthree-quartersofglobalelectricitydemandgrowthintheNZE,duetotheirmorerapidgrowthinpopulation,incomesandlivingstandards.Greaterrelianceonelectricitytomeettheincreaseindemandforenergyservicescauseselectricitydemandgrowthtorisefromanaverageof3.7%peryearin2016-2020to3.9%in2021-2050.Advancedeconomiesseeareturntogrowthinelectricitydemand,havingplateauedinrecentyears,duetomorerapidelectrificationofendusesandthetake-offofelectrolytichydrogenproduction.RapidgrowthinlowemissionselectricitygenerationTheriseinlowemissionselectricitygenerationintheNZE,bothtomeetrisingelectricitydemandanddisplaceunabatedfossilfuels,isstaggering.In2021,unabatedfossilfuelsaccountedforover60%ofelectricitygenerationworldwide,ledbycoal(35%),naturalgas(23%)andoil(3%).Hydropowerwasthelargestlowemissionssourceofelectricity(16%ofgeneration),followedbynuclearpower(10%),wind(7%)andsolarPV(4%).Thepowersectoremitted13.8Gtin2021,themostofanysectorandnearly40%oftheenergy-relatedtotal.Thepicturechangesradicallyoverthethreedecadesto2050intheNZE.Globalelectricitygenerationincreasestwo-and-a-halftimesover2020-2050tokeeppacewithdemand.Theelectricitysectoristhefirsttoachievenetzeroemissions,doingsoby2035inadvancedeconomiescollectivelyandby2040worldwide.Lowemissionssourcesexpandsevenfoldby2050,anaveragerateofgrowthofabout2000TWh,or7%,peryear,equivalenttoaddingover1400GWofsolarPVcapacity,750GWofwindor280GWofnucleareachyear.0.0001.0002.0003.0004.0005.0006.0007.0000%25%50%75%04000800012000MerchanthydrogenHeavyindustryLightindustryHeatinginbuildingsCookingLightdutyvehiclesHeavytrucksTWh2020205020202050Electricitydemand:Electricityshareinconsumption(rightaxis):NuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage32IEA.Allrightsreserved.ElectricitygenerationbysourceandaverageannualinvestmentinlowemissionssourcesintheNetZeroEmissionsby2050ScenarioIEA.Allrightsreserved.Source:IEA(2021),NetZeroby2050:ARoadmapfortheGlobalEnergySectorGlobalinvestmentinlowemissionssourcesofelectricitysurgesoverthecurrentdecade,reachingoverUSD1.1trillionperyearonaverageover2021-2030–almostfourtimesthatin2011-2020.Thepushtofullyreplaceunabatedfossilfuelsinpowergenerationby2040liftsthepaceofinvestmentevenhigherinthe2030s,signallingahugeopportunityforalllowemissionssourcesofelectricitythatarecommerciallyavailableandcost-competitive.Beyond2040,investmentincleanelectricityfallsback,withnewsourcesneededsolelytomeetelectricitydemandgrowth.CurbingemissionsfromheatproductionReducingemissionsfromtheproductionofcommercialheat,injectedintodistrictheatnetworksorsoldtoindustry,isamajortaskingettingtonetzero.In2021,nearly90%oftheheatsoldcommerciallyworldwidewasprovidedbyunabatedfossilfuelsand75%fromcombinedheatandpower(CHP)facilities.Coalwasthelargestsourceofheat,makingup45%ofthetotal,followedbynaturalgas(41%)andbioenergy(8%).Nuclearpowerprovidedjust0.1%.Globalheatproductionemitted1.3GtofCO2in2021,4%oftotalenergysectoremissions.GlobalemissionsfromheatproductionarealmostentirelyeliminatedintheNZEthankstoacombinationoflowerdemandduetoefficiencygainsandelectrificationinbuildingsandindustry,andswitchingtolowemissionsenergysources.Commercialheatdemandfallssteadily,by15%in2030andalmost60%by2050comparedwith2020.Lowemissionssourcesrisetocloseto40%ofthetotalheatsupplyin2030andnearly100%in2040.Between2020and2040,thesupplyoflowemissionsheatgrowsbyabout400petajoules(PJ)peryear,equivalenttoadding25GWofthermalenergy(GWth)ofnewbioenergyCHPcapacity,20GWthofnuclearCHPor18GWth02000040000600008000020102020203020402050TWhElectricitygenerationbysourceLowemissionssourcesUnabatedcoalUnabatednaturalgasOil0400800120016002011-202021-302031-402041-50USDbillion(2020)AverageannuallowemissionselectricityinvestmentNuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage33IEA.Allrightsreserved.oflarge-scaleheatpumpsannually.Additionsofcapacitybasedonlowemissionssourcesfallbacksharplyastheyareneededsolelytoreplaceretiredcapacity.CommercialheatproductionbysourceandaverageannualinvestmentinlowemissionssourcesofheatintheNetZeroEmissionsby2050ScenarioIEA.Allrightsreserved.Note:Commercialheatproductionincludesdistrictheatingandindustrialapplications.Source:IEA(2021),NetZeroby2050:ARoadmapfortheGlobalEnergySector.Investmentinlowemissionsheatplantsincreasesrapidlyto2040intheNZE,averagingwelloverUSD30billionperyearinthe2020sandaboutUSD27billioninthe2030sbeforefallingbacksubstantially.Aswithlowemissionselectricity,technologiesthatarealreadycommerciallyavailableandcost-competitiveaccountformostofthisinvestment.Fast-growingdemandforlowemissionshydrogenHydrogen,asanenergycarrierlikeelectricity,isexpectedtoplayavitalroleinfacilitatingemissionsreductionsinallend-usesectors.In2020,globalhydrogenproductionwasabout90Mt,thebulkofwhichwasproducedfromunabatedfossilfuelsandusedinrefiningorindustrialapplications.Lowemissionshydrogenaccountedforabout10%ofthetotal,producedalmostentirelybyfossilfuelswithCCUS(hydrogenproducedthroughelectrolysisusingrenewables-basedelectricityisminimalasyet).Globalhydrogenproductionemittedcloseto0.9GtofCO2emissions,makingup2%ofallenergysectoremissions.GlobalhydrogenproductionexpandsrapidlyintheNZE,morethandoublingto200Mtin2030andover500Mtin2050.Alloftheincreasecomesfromlowemissionsproductiontechnologies,withunabatedfossil-basedproductionfallingsteadilyasexistingplantsareretiredtojust25%oftotalhydrogenoutputin2030andunder10%in2040.FossilfuelswithCCUSbecometheleadingsourceofhydrogenin2030butarequicklyovertakenbyelectrolysis.With350projectscurrentlyunderdevelopment,0%20%40%60%80%100%20102020203020402050HeatproductionbysourceUnabatedcoalUnabatednaturalgasOilLowemissionssources010203040502011-20202021-302031-20402041-50USDbillion(2020)AverageannuallowemissionsheatinvestmentNuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage34IEA.Allrightsreserved.electrolytichydrogenproductionisabouttotakeoff,thoughthelongtermpaceofexpansionhingesoneffectivehydrogenstrategiesandpolicies.Globalinvestmentintheproductionoflow-carbonhydrogengrowsrapidlyintheNZEinthemediumterm,averagingoverUSD80billionperyearinthe2020sand2030s,beforefallingbackinthe2040sasnetzeroemissionscomeintosight.HydrogenproductionbysourceandaverageannualinvestmentinlowcarbonsourcesofhydrogenintheNetZeroEmissionsby2050ScenarioIEA.Allrightsreserved.Note:CNR=catalyticnaphthareforming.Source:IEA(2021),NetZeroby2050:ARoadmapfortheGlobalEnergySector.SupportforinnovationFullyhalfoftheemissionsreductionsintheNZEin2050comparedwith2020areassociatedwithtechnologiesthatarenotyetonthemarket,thoughmanyareatthedemonstrationorprototypephasestoday.Innovationisneededmostinlong-distancetransportandheavyindustry,wherereducingemissionswithcurrenttechnologiesishardestandmostcostly.Keyareasincludeadvancedbatterydesigns,carboncaptureinthecementindustry,carbonremovaltechnologiesandlarge-scaleelectrolysersforhydrogenproduction,aswellasadvancednucleardesignssuchassmallmodularreactors(SMRs),advancedbiofuels,optimisedheatpumpswithstorageandautonomoustrucks.Acceleratinginnovationcallsformorespendingoncleanenergyresearchanddevelopment(R&D)andenhancinginternationalcooperationandcollaboration.02004006002020203020402050MtHydrogenproductionbysourceRefiningCNRFossilfuelsFossilfuelswithCCUFossilfuelswithCCSElectricityBiomass03060902011-202021-302031-402041-50USDbillion(2020)AverageannuallowemissionshydrogeninvestmentNuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage35IEA.Allrightsreserved.Theroleofnuclearinachievingnetzeroemissionsby2050NuclearenergyisanimportantlowemissionstechnologyintheNZEpathwaytonetzero.Inparticular,itcomplementsandsupportstherapidgrowthofrenewablesinbringingemissionsfromtheelectricitysectorworldwidedowntonetzeroby2040.Nuclearpowercontributestothelowemissionselectricitysupplyand,asadispatchablegeneratingsource,enhancesthesecurityofsupplybyprovidingsystemadequacyandflexibility.Italsocontinuestothesupplyofheatfordistrictheatingnetworksandsomeindustrialfacilities.Theprojectedroleofnuclear,nonetheless,hingesondecisionsbypolicymakersandcompaniesaboutthepaceofconstructionofnewreactorsandthedurationofcontinuedoperationsforexistingnuclearreactors.TheprojectionsofnuclearpowerandotherpowergenerationoptionsinthescenarioarebasedoneconomicanalysiswithintheIEA’slong-termenergymodellingframework,whichincludescostprojectionsforeachfuel,technologyandregion,todeterminethemostcost-effectivepathwaytonetzeroemissionsacrossallsectorsby2050.Thenuclearpowerprojectionsalsotakeaccountoftechnologypreferencesandpublicacceptance,includingnationalpoliciesinfavouroforopposedtotheuseofnuclearpower.Assuch,theyareconsistentwithplannedreductionsandphase-outs,suchasthoseinGermany,BelgiumandSwitzerland.TheNZEincorporatestechnologyinnovationwiththecommercialisationofsometechnologiescurrentlyinadvancedstagesofdevelopment,butdoesnotrelyontechnologybreakthroughs.Theprojectedconstructioncostsoflarge-scalereactorsdeclinefordesignsunderconstruction,suchastheEPR,AP1000(developedbyWestinghouse,aUScompany)andHualong-1(jointlydevelopedbytheChinaGeneralNuclearPowerGroupandtheChinaNationalNuclearCorporation)pressurisedwaterreactors,asexperiencegainedintheirinitialdeploymentisappliedtosubsequentprojects.Theanalysisalsoconsidersadvanceddesigns,suchasSMRs,andthesearedeployedinsignificantnumberintheNZEforelectricitygeneration,particularlyinadvancedeconomies.SMRsandhigh-temperaturegasreactors(HTGRs)couldbeusedinotherwaysthansimplysupplyingelectricitytothegrid,thoughtheyarenotprojectedtobedeployedonalargescaletoprimarilyproduceheatorhydrogenbefore2050duetotheavailabilityoflowercostalternatives.NuclearfusionisnotincludedintheNZEduetosignificantuncertaintyaboutitstechnicalandeconomicfeasibility.Nuclearpowercapacitydoublesby2050intheNZEGlobalnuclearpowercapacity10almostdoublesfrom413GWatthestartof2022to812GWin2050intheNZE,withnewconstructionmorethanoffsettingthe10Allfiguresfornuclearcapacityarepresentedhereingrosstermsbeforeaccountingforonsiteelectricityconsumption,ratherthaninnettermsatthepointofinjectionintothegrid.NuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage36IEA.Allrightsreserved.progressiveretirementofmanyexistingplants.Thisrepresentsamajoraccelerationcomparedwiththelastthreedecades,whencapacityincreasedbyabout15%,orabout60GW.Theprojectedexpansionofnuclearpowercapacityisalsomuchlargerthanthatsettooccurundercurrentpoliciesandregulationsthathavebeenformalisedorwrittenintolaw:capacitynears530GWin2050intheSTEPS,35%lessthanintheNZE.Withoutasignificantchangeintherecenttrendsinnuclearpowerdevelopment,thepathtonetzeroemissionswouldneedtorelyonasmallersetoflowemissionstechnologies,reducingenergysecurityandraisingtotalinvestmentcostsandultimatelythecostofelectricitytoconsumers.Nuclearpowercapacitybycountry/regionintheNetZeroEmissionsby2050ScenarioIEA.Allrightsreserved.Note:Powercapacityreferstogrosscapacity,beforeaccountingforonsiteelectricityconsumption.Sources:IEA(2021),NetZeroby2050:ARoadmapfortheGlobalEnergySector;IEA(2021),AchievingNetZeroElectricitySectorsinG7Members.NuclearpowerundergoesstronggrowthinadvancedeconomiesintheNZE.Theseeconomieshavelongbeenleadersinnuclearenergytechnology,butalackofnewconstructioninrecentyearsisalreadycausingacontractionincapacity.Capacityshrinksbyabout5%between2020and2030,asnewplantsareunabletocompensateforplannedretirementsofageingreactors.Arenewedconstructioneffortleadstoareboundincapacityto330GWin2050,10%abovethecurrentleveland50%abovethatintheSTEPS.Thisreturntogrowthacceleratesthedecarbonisationofelectricitysupply,diversifiesthegenerationmix,supportsgridstabilityandfulfilsthelong-termvisionofmaintaininganimportantrolefornuclearpowerinseveraladvancedeconomies.FiveoftheG7members–theUnitedStates,Canada,UnitedKingdom,Japan,andFrance–collectivelycontinuetoaccountforthevastmajorityofnuclearcapacityamongadvancedeconomies.Bycomparison,renewablescapacityinadvancedeconomiesgrowsfivefoldoverthesameperiodintheNZE.NuclearcapacitygrowsevenmorerapidlyinemergingmarketanddevelopingeconomiesintheNZE,fromlessthan120GWin2020to480GWin2050–about90%oftheglobalincrease.Alllowemissionstechnologiesarescaledupinthese020040060080010001990200020102020203020402050GWOtheremergingmarketanddevelopingeconomiesChinaOtheradvancedeconomiesG7membersNuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage37IEA.Allrightsreserved.economies,includinganinefoldriseinrenewablescapacity,inanefforttomeetrisingdemandforelectricityservicesfromgrowingpopulationswithrisingincomes,whiledrivingdownemissions.Chinasoonbecomesthegloballeaderinnuclearcapacity,overtakingtheUnitedStatesandEuropeanUnionbefore2030andishometoone-thirdoftheglobalnuclearfleetby2050.OtherEMDEsacceleratetheexpansionoftheirnuclearprogrammes,includingIndia,BrazilandSouthAfrica.NewnuclearpowerproducingcountriesemergeinSoutheastAsia,AfricaandtheMiddleEastinlinewithcurrentlong-termplansandannouncements.Howdoesthepathtonetzerolookwithlessnuclear?OurLowNuclearCaseconsidershowtheNZEmightlookif,insteadofrising,globalnuclearcapacitydeclinesfrom413GWatthestartof2022to310GWin2050.Thisisabout500GWlessthanintheNZE.Theshareofnuclearintotalgenerationwouldfallfrom10%in2020to3%in2050.Keyassumptionsareasfollows:Inadvancedeconomies,noadditionallifetimeextensionsaregrantedandnonewnuclearprojectsarestarted.Inemergingmarketanddevelopingeconomies,nuclearconstructionremainsatthesameaveragerateseenduring2016-2020,i.e.about6GWofcapacityaddedperyeartomid-centuryIntheLowNuclearCase,severalotherlowemissionssourceswouldneedtostepuptodecarboniseelectricityby2040andmaintainenergysecurity.SolarPVandwindpowerwouldbetheprimaryreplacementsfornuclear,withanadditional1300GWofcombinedcapacityin2050,boostingthetotalgeneratingcapacitybyabout5%comparedwiththeNZE(asthosesourcesarenotalwaysfullyavailable).Thiswouldincreasethechallengesassociatedwithintegratinghighsharesofvariablerenewables,whichriseabove70%oftotalgenerationinmanypartsoftheworld.Tomaintainelectricitysecurity,farmorebatterystorageisneededaswellasfossilfuelsplantswithCCUS,theircombinedcapacityincreasingby50%comparedwiththeNZE.Thecapacitiesofotherdispatchablesourcesofgeneration,includinghydrogenandammonia,alsoexpandfastertoaidgridstabilityandadequacy.NuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage38IEA.Allrightsreserved.ChangeinglobalpowercapacityintheLowNuclearCaserelativetotheNetZeroEmissionsby2050ScenarioIEA.Allrightsreserved.Inadditiontotheneedtointegratemorerenewablesintoelectricitysystems,therearethreemainimplicationsoftheLowNuclearCaseoftheNZE:Higheroverallcosts:CumulativeinvestmentincreasesbyoverUSD500billionandconsumerelectricitybillsbyalmostUSD600billionovertheperiodto2050.Thisincludestheadditionalinvestmentcostsforpowertechnologies,thecostsofgridexpansiontosupportadditionalrenewablesandadditionalfuelcostsforcoalandnaturalgas.Additionalstrainoncleanenergysupplychains:Forevery1GWreductioninnuclearcapacityintheLowNuclearCase,anadditional3.5GWofcapacityfromothersourcesisneeded,withagreatercalloncriticalmineralsforbothpowergenerationtechnologiesandgridinfrastructure.Higherexposuretonaturalgasandcoalmarketprices:Coalandgaspriceswouldbemoreimportantforconsumerelectricitybills,removingadegreeoftheshelterofferedintheNZE.Newnuclearconstructionreachesnewhighsinthe2030sNotallcountriesareassumedtopursuethisoption,butthenuclearpowerindustryentersanewperiodofgrowthintheNZE,withalargenewwaveofconstructionofnuclearplantsgettingunderwayaroundtheworld.From2021to2050,640GWofnewnuclearcapacityisbroughtonlineworldwide.Anaverageofover27GWofcapacityiscommissionedeachyearinthe2030s,surpassingtheaverageheightofthepreviouswaveofconstructioninthe1980s(thoughtherecordforasingleyearof34GWwassetin1984).Toachievethispace,thenumberofnewconstructionstarts-1000-5000500100015002000202520302035204020452050GWOtherdispatchableBatteriesWindSolarPVFossilfuelswithCCUSNuclearNuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage39IEA.Allrightsreserved.forlarge-scaleplantsincreasessharplyfromanaverageofjustfiveperyearinrecentyearstoaroundtwentyperyearoverthenextdecade.Thepaceofconstructionslowsinthe2040sasunabatedfossilfuelsarelargelyphased-out,reducingtheneedfornewdispatchablelowemissionscapacity.DespitethereturntogrowthforthenuclearindustryintheNZE,nuclearpowerrepresentsjust2%ofallnewpowercapacitybuiltover2021-2050,withsolarPVandwindpoweraccountingforthebulk.ChinaremainsthegloballeaderinnewnuclearconstructionintheNZE.Itaddedmorenewnuclearcapacitythananyothercountryineachofthenineyearsto2021andthistrendisprojectedtocontinue.Intheperiodto2040,Chinabuildsanaverageof9GWperyearofnuclearcapacityintheNZE,40%oftheworldtotal.Theotheremergingmarketanddevelopingeconomiescombinedadd8GWperyear.ThecombinedshareofChinaandotherEMDEsinglobalnuclearconstructionfallsbackinthe2040s,asconstructioninG7memberspicksuptooffsetawaveofretirements.NuclearpowercapacityadditionsandretirementsintheNetZeroEmissionsby2050Scenariobycountry/regionanddecadeIEA.Allrightsreserved.Sources:IEA(2021),NetZeroby2050:ARoadmapfortheGlobalEnergySector;IEA(2021),AchievingNetZeroElectricitySectorsinG7Members.TheshiftinthecentreofgravityofthenuclearenergyindustrytoChinaandotheremergingmarketanddevelopingeconomieshasimportantimplicationsfornucleartechnologiesandtrade.China’scurrentnucleardevelopmentisfocusedmainlyonlarge-scalereactorsanddomesticdesigns,includingthesuccessfulHualong-1technology.ChinaisalsodevelopingHTGRswiththeaimofdisplacingcoal-firedpowerandheatplants(9GWofnuclearCHPisaddedinChinaover2021-2050intheNZE).Thenewpushfornuclearenergyinadvancedeconomiesisbasedonnewdomesticdesigns,includingEPRsinEuropeandSMRsinEuropeandtheUnitedStates.TherapidexpansionofnuclearconstructioninemergingmarketanddevelopingeconomiesotherthanChinawouldrelyonimportingnucleartechnologiesfromChina,EuropeandtheUnitedStates,creatingcompetitionamongtechnology-30-20-1001020301971-19801981-19901991-20002001-20102011-20202021-20302031-20402041-2050GWG7membersOtheradvancedeconomiesChinaOtheremergingmarketanddevelopingeconomiesRetirementsCapacityadditionsNuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage40IEA.Allrightsreserved.providersinthosecountries.Theaffordabilityofenergywillremainofvitalimportanceinemergingmarketanddevelopingeconomies,providingastrongincentivefordevelopersofadvancedreactordesignstoshortenconstructiontimesandminimisecosts.Nuclearlifetimeextensionsprovideacost-effectivefoundationforenergytransitionsTheexistingfleetofnuclearpowerplantsaroundtheworldcanprovideasolidfoundationonwhichtobuildcleanenergytransitions.Yetdecisionsabouthowlongtooperatetheseplantsthreatentoerodethatfoundation.Ofthe413GWofnuclearcapacityoperatingworldwideatthestartof2022,about290GWwasmadeupofreactorsinadvancedeconomies,manyofwhichareapproachingtheendoftheirinitialoperatinglicences.Howmanyoftheselicenceswillbeextendedandforwhatdurationremainsveryuncertain.TheNZEassumesthattheexistingfleetofnuclearpowerplantsinadvancedeconomieswillcontinuetooperateforaslongastechnicallyandeconomicallypossible.Unlessretirementsarealreadyplanned,operationallifetimesofnuclearreactorsextendto60yearsinmostcasesand80yearswherethisisalreadybeingconsidered,suchasintheUnitedStates.Asaresult,thecapacityofexistingplantsinadvancedeconomiesdeclinesonlymoderately,to250GWin2030andjustover200GWin2040,butfallsmorerapidlythereaftertoabout100GWin2050.Lifetimeextensionsareaverycost-effectivesourceoflowemissionselectricity,estimatedatlessthanUSD50/MWhfora10-to20-yearextensioninmajormarketsinthe2019IEAreport,NuclearPowerinaCleanEnergySystem.Withthelongleadtimesfornuclearconstruction,lifetimeextensionsalsoprovidetimetobuildnewnuclearplantsandotherlowemissionssourcesfastenoughtomeetnewelectricitydemandanddisplacefossilfuels.Wheretheoperationsofreactorscanbesafelyextended,obtainingnewregulatoryapprovalsandmobilisinginvestmentinthemwillbecriticaltomaximisingtheoverallcontributionofnuclearpowertothecleanenergytransition.Afailuretodosocouldhavefar-reachingconsequences.Backingawayfromnuclearwouldreduceadvancedeconomynuclearcapacityby70%by2040Intheeventthatnofurtherlifetimeextensionstoexistingnuclearreactorsaregranted(aswellasnonewinvestmentinexistingplantsoccursandnonewnuclearpowercapacityisbuiltbeyondthoseprojectsalreadyunderconstruction),theexistingnuclearfleetinadvancedeconomieswouldshrinkrapidly.InanupdatedNuclearFadeCase,werevisitedanalysisfirstdoneinNuclearPowerinaCleanEnergySystem,andfoundthat,inthesecircumstances,thecapacityoftheexistingnuclearfleetinadvancedeconomiescontractsbyone-thirdby2030andover70%by2040,NuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage41IEA.Allrightsreserved.toabout80GW.ThelargestdeclinesareintheEuropeanUnionandtheUnitedStates,butwithoutadditionalpositiveregulatorydecisions,therearesignificantreductionsinJapan,Canadaandotheradvancedeconomiestoo.Capacityofexistingnuclearpowercapacityinadvancedeconomiesbyscenario/caseIEA.Allrightsreserved.Notes:NetZero=NetZeroEmissionsby2050Scenario.TheNuclearFadeCaseassumesthatnofurtherlifetimeextensionstoexistingnuclearreactorsaregrantedinadvancedeconomies.ThePreviousNuclearFadeCasereferstotheIEA’s2019report(seesource),whichisupdatedhere.Sources:IEA(2019),NuclearPowerinaCleanEnergySystem;IEA(2021),NetZeroby2050:ARoadmapfortheGlobalEnergySector.ThelossesofcapacityintheUpdatedNuclearFadeCasearesignificantlysmallerthaninthepreviousversionthankstopolicyandregulatorydecisionstoextendthelifetimeofover50GWofnuclearreactorsbetweenMay2019andApril2022.Thosedecisionsconcernalmost20%ofthenuclearfleettodayinadvancedeconomies.IntheUnitedStates,anadditionalreactorhasbeengrantedaninitial20-yearextensionandsixothersapprovalforasubsequent20-yearextensionsince2019.InFrance,regulatoryapprovalhasbeengrantedfor32reactorstobeextendedbytenyears.TheseapprovalsarealongsideEDF’sGrandCarénageprogramme,whichrunsfrom2014to2025.Itinvolvessubstantialinvestmentinenhancingreactorsafetythroughmaintenanceandtechnicalmodifications,withthegoalofprolongingthelifetimesofmostofthefleetof56reactorsbeyond40years.InJapan,twoadditionalreactorsreceivedregulatoryapprovaltore-startsince2019.0100200300PreviousNuclearFadeCaseUpdatedNuclearFadeCaseNetZeroPreviousNuclearFadeCaseUpdatedNuclearFadeCaseNetZero202120302040GWTotaladvancedeconomiesOtheradvancedeconomiesCanadaUnitedStatesEuropeanUnionNuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage42IEA.Allrightsreserved.PolicyandregulatorydecisionsmadebetweenMay2019andMay2022forexistingnuclearreactorsbycountryCountryDecisiontypeCommentCapacity(GW)FranceExtensionofoperatinglicenceThirty-tworeactors(eachwithacapacityofabout900MW)receivedregulatoryapprovalfora10-yearextension30.4UnitedStatesExtensionofoperatinglicenceInitial20-yearextensiongrantedforSeabrook1Sixreactorsreceivedapprovalforasubsequent20-yearextension1.36.3SpainExtensionofoperatinglicenceSevenreactorsapprovedorpendingfinalapprovalforextensionsof5to10years,operatingupto20357.4BelgiumExtensionofoperationsTworeactorsputforwardtoextendoperationsby10yearsto20352.2JapanDecisionstorestartreactorsTworeactorsreceivedregulatoryapprovaltore-start1.7BulgariaExtensionofoperatinglicenceApprovedextensionforunit6ofKozloduynuclearpowerplanttooperateto20291.0MexicoExtensionofoperatinglicenceApprovalreceivedforLagunaVerdeUnit1tooperateto20500.8RomaniaExtensionofoperationsCernavodaUnit1refurbishmenttoextendlifetimeby30yearsto20590.7Total51.8Decisionstoextendthelifetimesofnuclearreactorswillhaveasignificantimpactonnaturalgasdemand,withimportantimplicationsforenergysecurityinimportingcountries.Withouttherecentregulatorydecisions,naturalgasdemandinadvancedeconomieswouldbealmost50bcmhigherin2030intheNZE.Furtherlifetimeextensionscouldreducenaturalgasdemandinadvancedeconomiesbyanother70bcmin2030,loweringdemandforLNGimportsinEurope,JapanandMexico,whilemakingmoregasavailableforexportintheUnitedStates.Thereareahostofpolicyandregulatorydecisionstobemadeintheneartermaboutsafetyinspectionsandextendingtheoperatinglicencesofexistingreactorsconcerningatotalof57GWofcapacity.PendingpolicyandregulatorydecisionsonrestartsorlifetimeextensionsbycountryCountryDecisiontypeCommentCapacity(GW)UnitedStatesExtensionofoperatinglicenceFouroperatingreactorsawaitingdecisiononinitial20-yearextensionsApplicationsforsubsequent20-yearextensionsunderreviewforninereactorsandplannedforfivemoreby20244.913.3NuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage43IEA.Allrightsreserved.CountryDecisiontypeCommentCapacity(GW)JapanPendingdecisionstorestartreactorsTenreactorsareunderreviewtorestartoperations9.0FranceExtensionofoperatinglicenceTwenty-tworeactorsmustpassinspectionbefore2025tocontinueoperations24.2KoreaExtensionofoperatinglicenceFivereactorswillreachtheendoftheirlicencestooperateby20264.8UKExtensionofoperations20-yearextensionofSizewellBtooperateto2055underconsideration1.3FinlandExtensionofoperatinglicenceApplicationforcontinuedoperationsplannedfortwonuclearunitsatLoviisaplant1.0MexicoExtensionofoperatinglicenceApplicationsubmittedpendingforLagunaVerdeUnit20.8Total57.3Nuclearoutputdoublesby2050intheNZE,thoughitsshareoftotalelectricitysupplyfallsTheprojectedglobalexpansionofcapacityunderpinsamorethandoublingofnuclearelectricitygenerationfrom2690TWhin2020tonearly5500TWhin2050intheNZE.Therateofincreaseisnonethelesslessthanthatofotherzerocarbongeneratingoptions,withnuclearpower’sshareintotalelectricitygenerationfallingfrom10%to8%overthesameperiod.Thelasttimethatnuclearpoweraccountedforlessthan10%oftotalgenerationwasin1980.Afterrenewables,nuclearpowerstillbecomesthelargestsourceofelectricityby2040,surpassingthatoffossilfuelsequippedwithCCUS,hydrogenandammonia(alsousedasameansofcuttingemissionsfromcoal-andgas-firedpowerplantsthroughco-firing).GlobalnuclearpowergenerationandtotalgenerationbytypeofenergyintheNetZeroEmissionsby2050ScenarioIEA.Allrightsreserved.Source:IEA(2021),NetZeroby2050:ARoadmapfortheGlobalEnergySector.0%25%50%75%100%200020102020203020402050Energysharesintotalgeneration020000400006000080000200020102020203020402050TWhElectricitygenerationbysourceUnabatedfossilfuelsFossilfuelswithCCUSHydrogenandammoniaHydroandotherrenewablesSolarPVandwindNuclearNuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage44IEA.Allrightsreserved.Inadvancedeconomies,nuclearelectricitygenerationedgesupby15%between2020and2050intheNZE.Itsshareoftotalgenerationfallsfrom18%to10%,astotalgenerationdoublestomeetnewdemandfromtheelectrificationoftransport,industryandheatinginbuildingsandhydrogenproduction.Thecapacityfactor–outputasashareofthemaximumcapacity–ofnuclearpowerinthosecountriesrisesfromanaverageof72%in2020to85%in2030,thanksinparttoreactorsbeinggraduallyrestartedinJapan.Inthelongterm,thecapacityfactorfallsbackbelow80%,astheshareofwindandsolarPVrisesanddispatchableplantsneedtooperateflexiblymoreoften.NuclearpowergenerationandshareoftotalgenerationbytypeofeconomyintheNetZeroEmissionsby2050ScenarioIEA.Allrightsreserved.Sources:IEA(2021),NetZeroby2050:ARoadmapfortheGlobalEnergySector;IEA(2021),AchievingNetZeroElectricitySectorsinG7Members.Inemergingmarketanddevelopingeconomies,nuclearelectricitygenerationincreasesmorethanfourfoldover2020-2050intheNZE,itsshareoftotalgenerationrisingfrom5%to7%.ThesharerisesevenmoreinChina,from5%to11%,becomingthethird-largestsourceofelectricitybehindwindandsolarPV.InotherEMDEs,thegrowthofnuclearpowerkeepspacewithoveralldemand,withitsshareremainingbroadlyconstantatabout5%throughto2050.0%6%12%18%24%01000200030004000200020102020203020402050TWhEmergingmarketanddevelopingeconomiesChinaOthersG7membersNuclearshareofelectricitysupply(rightaxis)0%6%12%18%24%01000200030004000200020102020203020402050TWhAdvancedeconomiesNuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage45IEA.Allrightsreserved.HowdoestheroleofnuclearintheNZEcomparewithother1.5°CscenariosassessedbytheIPCC?Theroleofnuclearpower,measuredbothbytotalnuclearpoweroutputanditsshareintotalgeneration,intheNZEisbroadlysimilartothatofthe97scenariosassessedbytheIPCCthatlimitwarmingto1.5°C(withagreaterthan50%probability)withnoorlimitedovershoot(categoryC1).Nuclearpoweroutputandtotalgenerationinthosescenariosvariesmarkedly:nuclearoutputrangesfrom1000TWhto26000TWhin2050,withamedianvalueof5600TWh.Nuclear’sshareofelectricitygenerationinthesameyearrangesfrom1%to29%,withamedianvalueof7.6%.Generally,comparedwithotherscenariosintheC1category,theNZEpathwayrelieslessonbioenergyandmoreonwind,solarPVandhydrogen.ShareofnuclearpowerinworldelectricitygenerationintheNetZeroEmissionsby2050ScenarioandcomparableIPCCscenarios,2050IEA.Allrightsreserved.Notes:NZE=NetZeroEmissionsby2050Scenario;AR6=IPCC’ssixthassessmentreport.Sources:IPCC(2022),ClimateChange2022:MitigationofClimateChange,WorkingGroupIIIContributiontotheIPCCSixthAssessmentReport;IEA(2021),NetZeroby2050:ARoadmapfortheGlobalEnergySector.AnotherimportantcomparisonistheInternationalAtomicEnergyAgency(IAEA)study,Energy,ElectricityandNuclearPowerEstimatesforthePeriodupto2050,releasedin2021.Itisdesignedtosetouta“conservativebutplausible”rangefornuclearpowerdevelopmentoverthenextthreedecades.Inthestudy’shighcase,whichtakesintoconsiderationpotentialpolicyactiononclimatechange,thoughnotspecificallynetzeroemissionsgoals,grossnuclearpowercapacityreachesabout830GWin2050(792GWinnetterms)–closetothatintheNZE.Inthestudy’slowcase,globalnuclearcapacityremainedlargelyunchangedfromthe2020levelof415GW(393GWinnetterms).5%10%15%20%25%30%IEANZEIPCCAR6NuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage46IEA.Allrightsreserved.NuclearpowercanmakeanimportantcontributiontooverallpowersystemadequacyNuclearpowerplantshavelongcontributedtothereliabilityofpowersystems,includingthroughcontributionstosystemadequacy.11Historically,nuclearpowerplantsinmostcountrieshavebeenoperationalandavailabletogeneratepoweratleastasoftenasallothersourcesofelectricity,withavailabilityfactorsregularlyabove90%.Sincethevastmajorityofnuclearpowercapacitycountstowardssystemadequacy,itscontributiontosystemreliabilityandadequacyistypicallyfargreaterthanitsshareintotalpowercapacity.Theshareofnuclearpowerintotaldispatchablepowercapacity–ametricofitscontributiontosystemadequacy–holdssteadyataround8%over2021-2050intheNZE.Dispatchablesourcesofelectricityhavelongbeentheprincipalmeansofensuringsystemadequacy.ThisremainsthecaseintheNZEaselectricitysystemsevolvewithincreasedrelianceonvariablesolarPVandwind.Unabatedfossilfuelsmakeupthemajorityofdispatchablecapacitytoday,buttheydeclinebyone-quarterto2030intheNZEandsharplythereafter.Unabatedcoal-firedpoweristhelargestdispatchablesourcetoday,butcapacityinoperationdeclinesbyover40%by2030andapproacheszerointheearly2040s.Unabatednaturalgas-firedpowercapacityremainsbroadlyconstantto2030,buoyedbytheneedtocompensateforthereductionincoal,butthendeclinesrapidlyinthe2030s.Oilisarelativelyminorcontributortodayand,asidefromremotelocations,isphasedoutquicklyinthisscenario.GlobaldispatchablepowercapacitybytypeintheNetZeroEmissionsby2050ScenarioIEA.Allrightsreserved.Note:Storageincludeshydrogen,ammoniaandbatteries.Pumpedstorageisincludedinthehydrototal.Storageisnotinherentlylowemissions,butdependsontheprimarysource,whichisincreasinglylowemissionsintheNZE.Source:IEA(2021),NetZeroby2050:ARoadmapfortheGlobalEnergySector.11Powersystemadequacyreferstotheabilityofavailablegeneratorstomeetelectricitydemandatalltimes.020004000600080001000020102020203020402050GWUnabatedfossilfuelsCoalNaturalgasOil20102020203020402050LowemissionssourcesFossilfuelswithCCUSNuclearHydroBioenergyOtherrenewablesStorageNuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage47IEA.Allrightsreserved.ThecontributionoflowemissionsenergysourcestodispatchablegeneratingcapacitygrowssubstantiallyintheNZE,withtheircombinedcapacityrisingfivefoldworldwideto2050.Hydroandnuclearpowerhavelongmadeupthebulkoflowemissionsdispatchablecapacity.Thecapacityofhydropowerandotherdispatchablerenewables,includingbioenergy,geothermalandsolarthermal,morethandoublesover2021-2050,complementingthegrowthofnon-dispatchablesolarPVandwindpower.Energystorage,inavarietyofforms,issetformassiveexpansion.Batteries,hydrogenandammoniaplayincreasinglyimportantroleswherethefleetsofcoal-andgas-firedpowerplantsareyoung.FossilfuelsequippedwithCCUSalsoemergeasimportantcontributorstosystemadequacy.NuclearalsohelpstomeettherapidlyrisingneedforpowersystemflexibilityintheNZEElectricitysystemflexibility–theabilityofthesystemtoreliablyandcost‐effectivelymanagethevariabilityanduncertaintyofdemandandsupply–isbecomingincreasinglycentraltoelectricitysecurityastheshareofvariablerenewablesingenerationgrows.Flexibilityoverdifferenttimeframes,fromminute‐to‐minute,hour‐to‐hourandseason‐to‐season,isneededtoensureinstantaneousstabilityofthepowersystemandlong‐termsecurityofsupply.Hour-to-hourflexibilityneedsinelectricitysystemsworldwidequadrupleonaveragefrom2020to2050intheNZE–twiceasmuchasoverallelectricitydemand.Thegrowingshareofgenerationlinkedtoweatherconditions(sunshineandwind)meansthatothergeneratorsarecalledupontochangetheiroutputmoreoftenandbylargeramounts.Changesinthepatternofelectricitydemand,whichvariesmorewithinthedayasaresultoftheincreasingelectrificationofroadtransport,heatinginbuildings,industrialprocessesandtheexpansionofelectrolytichydrogen,alsodriveupflexibilityneeds.ThebalanceofsolarPVandwindinfluencesthekindofflexibilitythatwillbeneededaselectricitysupplyisincreasinglydecarbonised.SolarPVoutputvariesregularlywithintheday,fromzeroatnight(withoutstorage)risingtoapeakaroundmiddaybeforefallingbacktozero.Cloudconditionsaddalayerofvariabilitywithintheday.Short-durationflexibility,abletospanafewhoursoruptoaday,iswelladaptedtothisregularpattern.EmergingmarketanddevelopingeconomiesrelyheavilyonsolarPVintheNZE,puttingshort-termflexibilityattheheartoftheirenergysecurity.Windconditionsandrelatedpoweroutputhavelessregularvariabilityacrosstheday,butmorevariabilityfromweektoweekandacrossseasons.Systemsthatincorporategreaterwindcapacitywilllookmoretolonger-durationflexibilitytobalanceelectricitysupplyanddemandacrossseveraldaysorweeks.ThisisthecaseforadvancedeconomiesintheNZE,wherewindremainsabiggersourceofgenerationthansolarPVthroughto2050.NuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage48IEA.Allrightsreserved.WindandsolarPVinstalledcapacityandsharesinelectricitygenerationbyregionalgroupingintheNetZeroEmissionsby2050ScenarioIEA.Allrightsreserved.Source:IEA(2021),NetZeroby2050:ARoadmapfortheGlobalEnergySector.Asuiteofflexibilitysources,includingprimarilylowemissionsgeneration,isusedtomaintainelectricitysecurityintheNZE.Unabatedfossilfuelsprovideover60%ofhour-to-hourpowersystemflexibilitytoday.Overthenextdecade,unabatedcoal-,gas-andoil-firedplantscontinuetoprovidethelion’sshareofflexibility,evenastheirsharesofgenerationdecline.Demandresponse,wherebyconsumersadjusttheirelectricityconsumptioninrealtimeinresponsetosystemneedsandpriceincentives,andstoragetechnologies,includingbatteries,becomethelargestsourcesofshort-durationflexibilityafter2030,makingupalmosthalftheglobaltotalby2050.Amixoflowemissionsgenerationtaketheplaceofunabatedfossilfuels.Hydropowerhaslongbeenamajorproviderofflexibility,withreservoirsactingaslargeenergystoragefacilities.Inthefuture,newreservoirhydrocapacityislimitedtoafewmarketsduetoenvironmentalconcernsandpublicacceptance,thoughpumpedstoragecapacitycontinuestogrow.Otherdispatchablerenewables,suchasbioenergyandgeothermal,alsocontribute.Low-carbonhydrogenandammoniaalsocontributetoseasonalstorage.NuclearpowercontinuestocontributetopowersystemflexibilityintheNZE.Inadvancedeconomies,itsshareofhour-to-hourflexibilityrisesfromaround2%todayto5%in2050.Inemergingmarketanddevelopingeconomies,itincreasesfrom1%to3%.InFrance,wherenuclearmeetsthebulkofelectricitygenerationneeds,flexibilityhasbeenincorporatedintoreactordesignstoallowsomeplantstorampupanddowntheiroutputquicklyatshortnoticesoastooperateinaload-followingmodetoalignelectricitysupplyanddemand.Whilemanycountrieshavenotregularlycalledonnuclearpowertooperateinthiswaytodate,manyreactorsareabletodosowithnoorminimaltechnicalmodifications.0%6%12%18%24%01000200030004000200020102020203020402050TWhEmergingmarketanddevelopingeconomiesChinaOthersG7membersNuclearshareofelectricitysupply(rightaxis)0%6%12%18%24%01000200030004000200020102020203020402050TWhAdvancedeconomiesNuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage49IEA.Allrightsreserved.Hour-to-hourpowersystemflexibilitybysourceandregionalgroupingintheNetZeroEmissionsby2050ScenarioIEA.Allrightsreserved.Source:IEA(2021),NetZeroby2050:ARoadmapfortheGlobalEnergySector.Innovationhasthepotentialtomakenuclearpowermoreflexible.Advancedtechnologies,includingSMRs,couldopenupthepossibilityfornuclearreactorstovarytheiroutputofelectricitymorereadily,possiblyswitchingtoproduceheatorhydrogeninsteadoforalongsideelectricity.Effortsarebeingmadetoinformpolicymakersandplannersaboutthepotentialcostbenefitsofmakingnuclearpowermoreflexible,suchasthecampaignledbytheCleanEnergyMinisterial.NuclearpowerinvestmentandcostsAnnualinvestmentinnuclearpowertriplesby2030intheNZETheresurgenceofnuclearpowerintheNZEentailsamassiveincreaseininvestmentinthecomingdecades,tobuildnewnuclearreactorsandextendtheoperationallifetimesofexistingones.AnnualglobalinvestmentinnuclearinthisscenariosurgestooverUSD100billioninthefirsthalfofthe2030sintheNZE–overthreetimestheaverageofUSD30billioninthe2010s.Itfallssteadilythereafterastheneedfordispatchablelowemissionsgeneratingcapacitysubsides,reachingaroundUSD70billioninthesecondhalfofthe2040s.Theinvestmentinnuclearpowerover2021-2050accountsforlessthan10%ofthetotalforlowemissionssourcesofelectricity.Bycontext,annualinvestmentinrenewablesinthisscenariorisesfromtoUSD325billiononaverageover2016-2020toUSD1.3trillionin2031-2035.0%20%40%60%80%100%2050202020502020UnabatedfossilfuelsHydrogenandammoniaNuclearHydroOtherrenewablesBatteriesDemandresponseAdvancedeconomiesEmergingmarketanddevelopingeconomiesNuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage50IEA.Allrightsreserved.Globalaverageannualnuclearpowerinvestmentbycountry/regionalgroupingintheNetZeroEmissionsby2050ScenarioIEA.Allrightsreserved.Sources:IEA(2021),NetZeroby2050:ARoadmapfortheGlobalEnergySector;IEA(2021),AchievingNetZeroElectricitySectorsinG7Members;IEA(2021).ThefocusfornuclearinvestmentintheNZEshiftsgraduallyfromemergingmarketanddevelopingeconomiestoadvancedeconomiesover2021-2050.TheyaverageclosetoUSD50billionperyearinadvancedeconomies,accountingforabouthalftheglobaltotal.Thisisalmostfourfoldtheaverageoverthe2010s.Thesecountries’investmentneedsarehighrelativetotheirshareofglobalcapacityduetohigherconstructioncostsandtheneedforlargeinvestmentstoextendthelifetimesofexistingreactorsandbuildnewonestooffsetretirements.Thelatterfactoralsoexplainswhyinvestmentinadvancedeconomiesisskewedtowardslaterdecades.ChinaneedstospendclosetoUSD20billionperyearonnuclearonaverageto2050,nearlydoubletheaverageoverthe2010s.OtherEMDEstripleinvestmenttoaboutUSD25billionperyearonaverage.Incontrasttoadvancedeconomies,investmentinthesecountriesisneededmoreintheperiodto2035.ThecostofnewnuclearreactorsvarieswidelybyregionThecostofconstructionofnewnuclearreactors–animportantfactorindeterminingrelativeinvestmentincompetingdispatchablegeneratingsources–isfarfromuniformacrosstheworld.12IntheNZE,itisassumedthatChinaandIndiaareabletobuildnewnuclearplantsatthelowestcost,atlessthanUSD3000/kW,withprojectscompletedinfivetosevenyears.Thismeansthatanewlarge-scalereactorwithacapacityof1.1GWwouldcostroughlyUSD3billion(in2020USD).CostsareassumedtoremainalothigherintheEuropeanUnionandUnitedStates,thoughtheydeclineprogressivelyoverthenextthreedecadestoaroundUSD4500/kW.Achievingthesecostreductionswouldrequirethenuclearindustrytodeliverprojects12AdditionalregionalcostassumptionsfornuclearpowerandotherpowertechnologiesfromtheWorldEnergyOutlook2021arefreelyavailablefordownload.0204060801001202011-20152016-20202021-20252026-20302031-20352036-20402041-20452046-2050HistoricalProjectionsUSDbillion(2020)OtheremergingmarketanddevelopingeconomiesChinaOtheradvancedeconomiesG7membersNuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage51IEA.Allrightsreserved.ontimeandonbudget.Therearesomeprovenmethodstoreducecostsforsubsequentinvestments,includingbeginningconstructiononlyafterdesignsarefinalised,maintainingthesamedesignforsubsequentunitstoachieve“nthofakind”efficienciesandbuildingmultipleunitsatthesamesite.Innovationisalsobeingappliedtothesitingprocess,whichcouldshortenlengthypre-constructionperiods.Thenuclearconstructioncostassumptionsapplytoallsizesofreactorsinouranalysis.NuclearpowerconstructioncostassumptionsforselectedcountriesandregionsintheNetZeroEmissionsby2050Scenario(USD/kWat2020prices)Region202020302050EuropeanUnion660051004500UnitedStates500048004500India280028002800China280028002500Source:IEA(2021),NetZeroby2050:ARoadmapfortheGlobalEnergySector.NuclearpowermustovercomeeconomicbarrierstoinvestmentAsidefromnon-economicbarrierssuchaspublicacceptance,thenuclearindustrymustovercomeseveraleconomicbarrierstoinvestmentforittocontributetoreachingnetzeroasdepictedintheNZE.Theprimaryeconomicbarrieriscostrelativetothatofotherlowemissionsenergysources.Measuredbythelevelisedcostofelectricity(LCOE)–theaveragecostofelectricitygenerationforaplantoveritsoperatinglifetime–solarPVisalreadythecheapestnewsourceofelectricityinmostmarkets,withcostshavingfallensome85%overthepastdecade.SolarPVcostscontinuetofallintheNZEdrivenbymassivedeploymentandinnovation(aftertemporarypriceincreasesintheneartermduetosupply-chaindisruptions).OnshorewindistheonlylowemissionstechnologythatcancompetewithsolarPVoncost,withoffshorewindontracktoapproachthecostofonshoreprojectsinmanycaseswithinthenextfewyears.By2030,thecostsofsolarPVandonshorewindareprojectedtofalltolessthanUSD50/MWhinmostmarkets–wellbelowthecostsofnewnuclearprojects.NuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage52IEA.Allrightsreserved.LevelisedcostofelectricityforselectedtechnologiesandcountriesintheNetZeroEmissionsby2050ScenarioIEA.Allrightsreserved.Note:Levelisedcostsfornuclearincludethecostsofdecommissioning.Source:IEA(2021),NetZeroby2050:ARoadmapfortheGlobalEnergySector.Yet,inmanyinstances,nuclearpowercanstillbecompetitivewithrenewableswhenitsbroaderelectricitysystembenefitsareconsidered.TheLCOEisacommonmetricforcomparingandscreeninglowemissionsgeneratingoptionsbutdoesnotallowfordifferencesinthewayeachtechnologyoperates,notablydispatchability.Morecompletemetrics,suchasthevalue-adjustedLCOE,quantifythesystemvalueofdifferenttechnologies,throughtheircontributionsnotonlytolowemissionselectricity,butalsotosystemadequacyandflexibility.Thevalue-adjustedLCOEofwindandsolarPVtendstoriseastheirshareoftotalgenerationincreases,whilethatofnuclearandotherdispatchablegeneratingoptionsfalls,makingthemmorecompetitiveandgrantingthemalargerroleinleast-costsystemsthantheLCOEalonemightindicate.Whatisthevalueofnuclearoutput?Thecompetitivenessofnuclearinrelationtootherpowergenerationtechnologiesisdeterminedbythevalueofitsoutputaswellasitscostofproduction.Theabilityofanelectricitysourcetobeavailableduringtimesofhighestsystemneeds,forexample,helpstoraiseitsenergyvalue,measuredbytheaveragewholesalepriceobtainedforitsoutputinacompetitivemarket.Atthesametime,anabundanceofoutputwhenitisnotneededreducestheenergyvalue.Theenergyvalueofaparticulartechnologyinasystemdependsonthepatternofdemand,themixofgeneratingresources,fuelandCO2prices,andothersystem-specificelements.Astheshareofvariablerenewablesrises,theenergyvalueofanadditionalsolarPVorwindprojecttendstodecline.TheregularoutputpatternofsolarPVmeansthat04080120160202020302050202020302050202020302050202020302050NuclearSolarPVutilityWindonshoreWindoffshoreUSD(2020)perMWhEuropeanUnionUnitedStatesIndiaChinaNuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage53IEA.Allrightsreserved.withoutstorage,itsenergyvaluedeclinesthemost.InoursimulationsoftheEuropeanUnion,ChinaandtheUnitedStates,eachpercentagepointriseintheshareofvariablerenewablesintotalgenerationreducestheenergyvalueofsolarPVby1-2%relativetotheaveragewholesaleelectricityprice.Thelossofvalueislessmarkedforwind:foreachpercentagepointincreaseintheshareofvariablerenewables,theenergyvalueofonshoreoroffshorewinddeclinesbyjust0.3%orless.Bycontrast,nuclearpower’senergyvaluerelativetothesystemaverageisstableorincreasesinthesemarketsastheshareofvariablerenewablesrises,rewardingitsdispatchability.EnergyvalueoflowemissionselectricityrelativetotheaveragewholesaleelectricitypricewithrisingsharesofvariablerenewablesbytechnologyIEA.Allrightsreserved.Note:Energyvalueiscalculatedastheaveragepriceperunitofoutputovertheyear,basedonthesimulatedhourlywholesaleelectricitypriceandproductionprofilebytechnologyintheSustainableDevelopmentScenario,whichachieveskeyenergy-relatedUnitedNationsSustainableDevelopmentGoalsrelatedtouniversalenergyaccessandmajorimprovementsinairquality,andreachesglobalnetzeroemissionsby2070.Source:IEA(2021),WorldEnergyOutlook2021.Therelativelylargesizeandhighassociatedupfrontcostsofconventionalnuclearreactorsareanothereconomicbarrier.Asinglelarge-scalereactorcanhavethecapacitytoproduceover1600MWofpower–thelargestofanytechnology.Smallerreactorsarepossible,butarelessabletoexploiteconomiesofscale.Bycomparison,hydropowerhasthenextlargestplantcapacity,withindividualturbinescapableofproducinguptoabout800MW.Attheotherextreme,asinglesolarPVpanelhasacapacityof300Winutility-scaleprojectsandaslittleas100Winrooftopinstallations.ThelargecapacityofnuclearreactorscombinedwiththeirrelativelyhighconstructioncostsmeanthatthecostofasinglereactorcanexceedUSD10billioninsomecountries–anorderofmagnitudegreaterthananyotherlowemissionstechnology.Onlyafewcompaniesintheworldarecapableofhandlingprojectsofthisscaleand,evenforthem,suchprojectspresentconsiderablerisksinthecaseof20%40%60%80%100%120%20%40%60%80%ShareofvariablerenewablesNuclearSolarPVOnshorewindOffshorewindEuropeanUnion20%40%60%80%UnitedStates20%40%60%80%ChinaNuclearPowerandSecureEnergyTransitionsTheRoleofNuclearEnergyontheRoadtoNetZeroEmissionsPage54IEA.Allrightsreserved.delaysorcostoverruns.Thiscandeterinvestmentinasinglereactoraswellasthedevelopmentofaseriesofreactorsnecessarytodrivedownthecostsofnewreactordesigns.Rangeofplantcapacityandcostofselectedelectricitygeneratingtechnologies,2020IEA.Allrightsreserved.Note:Logscales.Incountriesthatplanfornuclearpowertoplayapartintheenergytransition,governmentsmustintervenetohelpovercometheseeconomicbarriers.Itiscriticalthatthecontributionsoflowemissionstechnologies,includingnuclearpower,toemissionsreductionsandenergysecurityareappropriatelyvalued.PricingCO2emissionsandotherpollutantsisthemostefficientmeansofvaluinglowemissionscontributions,whilemarketsforpowersystemservicesarewell-suitedtovaluecontributionstoelectricitysecurity.Wherethesearenotinplace,itmaybenecessarytointervenedirectlyincompetitivemarketstoincentiviseprivateinvestment,ortoprovidepriceorrevenueguaranteesunderlong-termcontractstonewgeneratorsaspartofanoverallplanfortheenergysector.Governmentactionscanalsodrivenuclearinnovation,helpingadvanceddesignsthroughthevariousstagesofdevelopmenttocommercialisation,forexamplebysupportingconstructionofaseriesofreactors,forwhichtheinitialcostsarelikelytobehigh.Advancedreactordesigns,inparticularSMRs,havethepotentialtoaddressboththeeconomicbarriersdescribedabove,inturnmakingitmorefeasibletodevelopmultipleprojectsanddrivedowncosts.Theextenttowhichcostscanbeloweredwilldeterminethedegreetowhichnucleartechnologiesareabletoproducelowemissionselectricity,heatorhydrogeninthelongterm.IfcostscanbereducedmorethanassumedintheNZErelativetootherlowemissionstechnologies,theroleofnuclearenergycouldbesignificantlylargerthanthatprojected.110100100010000100000100000010000000100000000100000000010000000000NuclearreactorsHydroturbinesWindoffshoreturbinesWindonshoreturbinesSolarPVpanelsWUnitcapacity110100100010000100000100000010000000100000000100000000010000000000NuclearreactorsHydroturbinesWindoffshoreturbinesWindonshoreturbinesSolarPVpanelsUSD(2020)UnitinvestmentNuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage55IEA.Allrightsreserved.3.ThecompetitivenessofnuclearenergyAssessingthevalueofnucleartodecarbonisingenergysystemsReducingemissionsfrompowergenerationcost-effectivelywhileensuringenergysecurityrequiresamarketframeworkthatadequatelyvaluesbothlowemissionsgenerationandthefullrangeofelectricitysystemservices.Energytransitionsrequireshiftingawayfromtheunabateduseofcoalandnaturalgastoasuiteoflowemissionstechnologiesinthepowersector.Thefavourableattributesofnuclearpower–notablyitslowemissions,dispatchabilityandflexibility–willboostitsvaluetoelectricitysystemsastheyareprogressivelydecarbonised.Inparticular,dispatchabilitywillbecomeincreasinglyvaluableasvariablerenewables,whicharenotdispatchableandarelessflexiblethanthermalgeneratingsources,provideanincreasingshareofpowergeneration.Othersourcesofflexibilitysuchashydropowerorgeothermalfacedifficultiesinscalabilityoracceptablesites,orhaveyettoprovethemselvescommerciallyinthecaseofelectrolytichydrogenandCCUS.Forthesereasons,electricitymarketsneedtobedesignedtoensurethattheeconomicvalueofnuclearpower,alongsideotherlowemissionstechnologies,isfullyreflectedinpricesignalsinordertoincentiviseinvestmentinanon-discriminatorymanner.Intheabsenceofgoodmarketdesign,governmentswillneedtorelytoagreaterextentonotherincentives,suchasadministrativelydefinedpayments,tomaketheseinvestmentshappen,oftenwithhighercostoutcomes.Nuclearenergycanalsocontributetotheexpansionoflowemissionsheatandlowemissionshydrogenproduction.Competitionbetweenthetechnologicaloptionsforsupplyingthosegrowingmarketsissignificantlydifferentthaninthepowersectorandtheimpactofsite-specificconsiderationsismoreimportantfortheinvestmentdecisionstaken.Exploitingthispotentialcouldstrengthenbusinesscasesfornewreactorsbyincreasingrevenuesandreducingtheriskofhavingtocurtailproductioninsystemswithhighsharesofvariablerenewables.NuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage56IEA.Allrightsreserved.ElectricitygenerationNewnuclearreactorconstructioncostsneedtofallsharplytocompeteformoremarketsharewithsolarPVandwindThecostofbuildingnewnuclearreactorswillbecrucialtothefutureroleofnuclearpowerintheglobalcleanenergytransition.AtthecostassumptionsintheNZE,nuclearplaysacomplementaryrole,contributingtosystemstability,expandingthesuiteoflowemissionssourcesandsteppingupwhererenewablesareconstrained.However,inordertocompetedirectlywithsolarPVandwindpower,consideringboththecostsandsystemvalueforeachtechnology,theconstructioncostofnewnuclearwouldneedtobereducedtoUSD2000/kW(in2020USD)orlessforcapacitytobeaddedin2030.Atthisconstructioncost,theLCOEofnuclearpowerwouldbeintherangeofUSD40-60/MWh,dependingmainlyonthecostoffinancing.Thelowerendofthatrangecorrespondstoaweightedaveragecostofcapitalof4%,whichrequiresproject-andtechnology-specificrisktobeminimisedortransferredtootherparties.Supportmeasuresshouldbetechnology-neutralwheneveracceptableandpossibletoensurethemostaffordableenergytransitions.Thedurationofconstructionandthecapacityfactor,whichalsoinfluencetheLCOE,varybyregion.Forexample,shorterconstructionperiodsandhigherprojectedcapacityfactorsresultinalowerLCOEinChina.WherethecostsofnuclearconstructionareclosertoUSD4000/kW,theLCOEjumpstoUSD60/MWhtoUSD100/MWh,whichexceedsthatofsolarPVandwindprojects,includingwithstorage,inmostcases.Thevalue-adjustedLCOE(VALCOE)ofnuclearpowerisverysimilartotheLCOEintheEuropeanUnion,ChinaandtheUnitedStatesasnuclearpower’scontributiontolowemissionselectricitysupply,powersystemadequacyandflexibilityisroughlyequaltotheaverageoftheentirepowerplantfleet.Nuclearlifetimeextensionsareacompetitivesourceoflowemissionselectricity,especiallyinEuropeandtheUnitedStates.ThecapitalcostformostextensionprojectsisintherangeofUSD500/kWtoUSD1100/kWin2030,yieldinganLCOEgenerallybelowUSD40/MWh.Atthiscost,nuclearlifetimeextensionsarecompetitivewithlowcostsolarPVandwindundermostconditions,despitesolarPVandwindpowercostsfallingheavily.Extensionscontributetopowersystemservicestoasimilardegreeasnewprojects,sothereislittledifferencebetweentheirVALCOEandLCOE.NuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage57IEA.Allrightsreserved.Levelisedcostofelectricityandvalue-adjustedlevelisedcostofelectricityforselectedgeneratingresourcesinselectedcountries,2030a)EuropeanUnionb)Chinac)UnitedStatesIEA.Allrightsreserved.Notes:LCOE=levelisedcostofelectricity;VALCOE=value-adjustedLCOE;WACC=weightedaveragecostofcapital.VALCOEisametricintheIEAenergymodellingframeworkthatreflectstechnology-specificLCOEsandcontributionstosystemvalue.Thesizeofstorageisassumedtobeone-quarterofthatoftherenewableenergyproject(e.g.a100MWsolarPVarrayhasa25MWbatterywith4hoursor8hoursofduration).ConstructioncostsforsolarPVandwindonshoreandsimulatedoperationsarebasedontheNetZeroEmissionsby2050Scenario.Source:IEA(2021),WorldEnergyOutlook2021.40801205004%5008%11004%11008%20004%20008%40004%40008%Nostorage4-hourstorage8-hourstorageNostorage4-hourstorage8-hourstorageNuclearlifetimeextensionsNewnuclearSolarPVutilityWindonshoreUSD(2020)perMWhLCOEVALCOEUSD/kW:WACC:40801205004%5008%11004%11008%20004%20008%40004%40008%Nostorage4-hourstorage8-hourstorageNostorage4-hourstorage8-hourstorageNuclearlifetimeextensionsNewnuclearSolarPVutilityWindonshoreUSD(2020)perMWhLCOEVALCOEUSD/kW:WACC:40801205004%5008%11004%11008%20004%20008%40004%40008%Nostorage4-hourstorage8-hourstorageNostorage4-hourstorage8-hourstorageNuclearlifetimeextensionsNewnuclearSolarPVutilityWindonshoreUSD(2020)perMWhLCOEVALCOEUSD/kW:WACC:NuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage58IEA.Allrightsreserved.ThecompetitivenessofnucleardependsalsoontheprospectsforfurtherreductionsinthecostofgeneratingelectricityfromsolarPVandwind.SolarPVisthecheapestsourceofelectricityinmostregionstoday;itisalsowidelyavailableandscalable.TheLCOEofsolarisprojectedtofallbymorethan40%by2030intheNZE,withmostutility-scaleprojectscostingaroundUSD20/MWHtoUSD40/MWh.However,thevariableoutputofsolarPVdoesnotmatchpatternsofelectricitydemandverywell,reflectedinaVALCOEthatisnotablyhigherthanitsLCOE.PairingsolarPVwitheither4-houror8-hourstoragemakesitmorecompetitive,withco-locationofferingcostadvantages,withalowerVALCOEthansolarPVonitsowninChina,theEuropeanUnionandtheUnitedStates.Aswithsolar,windpoweriswidelyavailableandscalableinmostmarkets.ItisamorematuretechnologythansolarPV,thoughinnovationscontinue.AswithsolarPV,theLCOEofmostonshorewindprojectsisexpectedtofalltoUSD30/MWhtoUSD70/MWhin2030.Theprofileofwindoutput,whichdependsonwindconditions,areoftenmisalignedwithdemandpatterns,sowind’sVALCOEisgenerallywellaboveit’sLCOE,makingitlesscompetitivethantheLCOEalonewouldsuggest.PairingstoragewithonshorewindcanlowertheVALCOE,particularlywheretheshareofwindintotalgenerationishigh,suchasintheEuropeanUnion.Non-economicfactors,includingtheavailabilityofsuitablesitesandpublicacceptance,willalsoaffecttheirdeployment.NuclearisbetterabletocompetewithotherdispatchablelowemissionsoptionsThecostofbuildingnewnuclearpowerplantsneedstofallmuchlesstocompetewithotherdispatchablesourcesoflowemissionselectricity.Inmostplaces,nuclearconstructioncostswouldneedtofalltoUSD2000/kWtoUSD3000/kW(in2020USD)tocompetewithotherdispatchablesources,includinghydropower,bioenergyandfossilfuelplantsequippedwithCCUS,thoughthepotentialofthesealternativedispatchablesourcesmaybelimitedinsomeregions.Dependingonfinancingcosts,thiswouldyieldaLCOEofnuclearpowerofUSD40/MWhtoUSD80/MWh.Amongthesesources,theLCOEisagoodmeasureoftheircompetitivenesssincetheirdispatchabilityandvaluetoelectricitysystemsaresimilar.WhiletheuseoffossilfuelswithCCUScarriesagreaterriskofpricevolatility,fallingdependenceonfossilfuelsacrosstheglobalenergysystemwouldputdownwardpressureonpricesinthelongterm.Theglobalpotentialforbuildingmorehydropowercapacity,whichhasbeenalow-costsourceoflowemissionselectricityfordecades,islimited.Thecostsandeventualperformanceofhydroelectricplantsdependheavilyonproject-specificfactors.TheLCOEfornewprojectsisprojectedtodiptoUSD40/MWhtoUSD100/MWhby2050intheNZE,withnewprojectsincreasinglyconcentratedinafewregionswithremainingpotentialandthebestsiteconditions.Mosthigh-qualityresourcesNuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage59IEA.Allrightsreserved.developedlongagoandmanysitesareunavailableduetoenvironmentalconcernsandsocialimpacts,withtheexpansionofhydropowerwithreservoirslimitedmainlytoChina,SoutheastAsiaandAfrica.Bioenergypowerplantsarescalableandcanbebuiltatmostsites,butarelimitedbyrelativelyhighcosts.Thisisparticularlythecasewheresustainabledomesticsuppliesofbiomassarelimitedandbiomasspelletsneedtobeimported,suchasinEurope.Asaresult,theLCOEoftheseplantsoftenexceedsUSD150/MWhby2050intheNZE.Whiletheavailabilityoflow-costfuelintheformofagriculturalresiduescangreatlyimprovetheeconomicsofbioenergypowerplants,suchprojectstendtobesmallinsizeandtheiroverallcontributiontoelectricitygenerationmodest.LevelisedcostofelectricityforselecteddispatchablelowemissionselectricitygenerationsourcesIEA.Allrightsreserved.Notes:WACC=weightedaveragecostofcapital.Rangesrepresentvariationsacrossmajorregionswithatleast10GWofdeploymentover2020-2050foreachtechnology,reflectingregionalconstructioncosts,fuelprices,CO2pricesandsimulatedoperationsintheNetZeroEmissionsby2050Scenario.Source:IEA(2021),WorldEnergyOutlook2021.Naturalgas-firedpowerplantsequippedwithCCUShavethepotentialtobeamongthecheapestdispatchablesourcesoflowemissionselectricity.Animportantfactoristhecostofthecarboncaptureequipment,whichhasbeeninthedevelopmentanddemonstrationphasesformorethanadecade.Full-scalecommercialprojectsareneededurgentlytodrivedowncostsandreduceuncertaintiesforthetechnology.Therearesignsofprogress,aspolicysupportforthedevelopmentofCCUSisexpanding,forexampleintheUnitedStatesandCanada,andthenumberofprojectsunderdevelopmentworldwideisincreasing.Aspilloverbenefitwouldbetomakecaptureequipmentavailableforindustryinhard-to-abateapplications,suchasironandsteelproduction.Anothercriticalfactoristhepriceofnaturalgas.Russia’sinvasionofUkraineissettomaintainupwardpressureonpricelevelsforsometimetocome;ifhighpricespersist,2000USD/kW8000USD/kW04080120160200WACC8%WACC4%203020402050203020402050203020402050203020402050NuclearHydroBioenergyCoalCCUSGasCCUSUSD(2020)perMWh205020402030NuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage60IEA.Allrightsreserved.orifthecarboncapturetechnologiesweretoprogressonlyslowly,thecostofgenerationatgas-firedpowerplantswithCCUSwouldbesubstantiallyhigher,makingnuclearpowerrelativelymorecompetitive.ButifpricesinsomeregionsweretoreturntolevelsintheUSD2/mmBtutoUSD6/mmBturange,thengas-firedpowerplantswithCCUScouldgeneratepoweratacostoflessthanUSD70/MWhin2030.Thecompetitivenessofcoal-firedpowerplantsequippedwithCCUSversusnuclearpowerdependsonwhetherthoseplantsareneworretrofitted.Newcoalplants,likenewnuclearones,arerelativelyexpensivetobuildbutoperateinmosthoursandprovideasuiteofsystemservices.Withtechnologyimprovements,theprojectedLCOEofnewcoalCCUSprojectsisintherangeofUSD80/MWhtoUSD110/MWhby2040.Retrofittingexistingplantswithcarboncaptureequipmentoffersawayforsomeofthehighestemittingpowerplantsintheworldtobecomelowemissionssources.Thiscouldbesignificantlycheaper,especiallyforrecentplantsthatweredesignedtobeCCUS-ready,althoughCO2networksandstorageneedtobedevelopedinparallelwithindividualfacilities,whichcomplicatestheuseofCCUStechnology.Analternativeistopermanentlyshutdownexistingcoalplantsandre-usethesitestohostnewnuclearprojects,sizedtofitthespaceandexploittheexistinggridconnection.Thisoptionhasthepotentialtohostasignificantamountofnewnuclearcapacity,mostlikelyintheformofsmallmodularreactors.Low-carbonhydrogenandammonia,whichcaninprinciplebeusedasinputstogas-andcoal-firedpowerplantstoprovidedispatchablepower,areessentiallycarriersoflowemissionsenergy–notsources–andsoarenotprimarycompetitorswithnuclearpower.Rather,theycouldcomplementnuclearpoweriftheyareusedtoproducethosefuelsasawayofstoringelectricalenergyforsubsequentuseinmeetingpeakdemand.Hydrogenandammoniaarenotyetusedonasignificantscaleinthepowersector,andstarttotakeoffonlyafter2030intheNZE.ThisisbecausetheshareofvariablerenewablesreacheshighlevelsandtheseasonalvariabilityofwindandsolarPVcreatesnewdemandforflexiblesourcesofelectricity.Asrelativelyexpensivefuels(duemainlytothelargeenergylossesinproducingandusingthem),hydrogenandammoniaarebestsuitedtomeetpeakdemandneedsandprovidelong-durationorseasonalstorage.Whilelarge-scalenuclearpowercanalsocontributetopeaksystemneeds,itisbestsuitedtooperateinbaseloadmode.ElectricitysystemservicesNuclearhasimportantenergysecurityattributesfortheroadtonetzeroThetransitiontonetzeroemissionsrequiresaradicalchangeinthewayvariouselectricitysystemservicesareprovidedtoensuresecure,flexibleandstablesystemoperation.Theseservicesincludesystemstability,rampingandotherformsofshort-termflexibility,andcapacityattimesofpeakdemand,inadditiontothesupplyofNuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage61IEA.Allrightsreserved.electricityitself.Whilevariablerenewables,mainlywindandsolarPV,becomethemostcost-effectivesourceofenergyonanLCOEbasisinmanylocationsand,thus,generatemostelectricityinfullydecarbonisedsystemsintheNZE,othergeneratingsources–includingnuclearinsomecountries–arerequiredforthesecureoperationofthesystem.Chinaprovidesanexampleoftherolethatnuclearpowercouldplayinensuringelectricitysecurityinadecarbonisedsystem.InSeptember2020,theChinesegovernmentannouncedapledgetohaveCO2emissionspeakbefore2030andachievecarbonneutralitybefore2060.TheIEAreleasedareportinSeptember2021,AnEnergySectorRoadmaptoCarbonNeutralityinChina,presentingascenarioinwhichthisgoalisachieved,basedondetailedmodellingofthepowerandothersectors.Inthisscenario(whichreachesnetzeroemissionslaterthanintheNZE),variablerenewablesprovide58%oftotalelectricitysupplyin2060,upfromabout4%in2020.However,theycontributeonlyaround8%ofpeakcapacity.Storage,demandresponse,hydropowerandplantswithCCUSeachcontributemore.Theshareofnuclearintotalgenerationin2060,ataround10%in2060,ismuchlowerthanthatofvariablerenewables,yetnuclearcontributesequallytomeetingpeakcapacityneeds.Nuclearalsocontributesmuchmoretostabilityservices,includinginertia,whichreaches48%in2060comparedwithjust3%in2020.ContributiontoelectricitysystemservicesbyresourceinChinaIEA.Allrightsreserved.Note:Inertiaisbasedonthecontributiontoinertiainthe100lowest-inertiahours.Rampingiscalculatedfromthecontributiontothetop100hourlyramps.Energyistotalgeneration.Thesemeasuresaimtoillustratethediverseaspectsofelectricitysecurity,butdonotencompassallrelevantcomponentsorpotentialtechnologycontributions.Source:IEA(2021),AnEnergySectorRoadmaptoCarbonNeutralityinChinaTransitionswillchangetheoptimalmixofgeneratingresourcesAmajorconsequenceoftheincreaseinthesharesofvariablewindandsolarenergyintotalpowergenerationisanincreaseinthevolatilityinnetload–totalloadminus0%20%40%60%80%100%ThermalAbatedthermalCleanfuelsHydroNuclearVariablerenewablesBioenergyOtherrenewablesStorageDemandresponseInertiaRampingflexibilityPeakcapacity/adequacyEnergy202020600%20%40%60%80%100%NuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage62IEA.Allrightsreserved.windandsolargeneration–overalltimescales,fromminutestohours,days,weeksandseasons,aswellasmajorchangesinnetloadprofiles.Windandsolarplantsalwaysgeneratewhenavailablegiventheirextremelylowoperatingcosts.Netloadrepresentsthedemandthatmustbemetwithdispatchablesources,includingnuclearpower,thermalplants,hydro,storageorimportsfromoutsidethesystem.Thatdemandinevitablyincreasesasmorevariablerenewablesareaddedtothesystem.Justhowmuchinpracticedependsonlocalclimaticandseasonalfactors,aswellasthemixofsolarandwind.Forexample,inthesummer,solargenerationinsomewarmlocationstendstocoincidewithelectricitydemand,ascoolingneedspeakduringdaylighthours,reducingnetload,i.e.thegenerationneededfromdispatchableplants.Thereversemaybetrueinthewinter,whendemandmaybehighestintheeveningafterthesunhasgonedown.Koreaillustratesthisphenomenon,whichwerecentlyhighlightedinourreportReformingKorea’sElectricityMarketforNetZero,bycarryingoutdetailedpowersystemmodellingofapathwaytonetzeroenergy-relatedCO2emissionsby2050.Inthatscenario,theshareofvariablerenewablesintotalelectricityrisesfrom4%in2020to50%in2035,increasingtherangeofhourlynetloadfourfold.13Thenetloaddurationcurve–netloadforeachhourlyperiodovertheyearrankedindescendingorderofmagnitude–alsoshiftsmarkedly.Moredispatchablecapacityisneededone-thirdofthetimein2035comparedwith2020,butnoneisneededaboutone-fifthoftime.HourlynetloadandloaddurationcurveinKoreaIEA.Allrightsreserved.Note:Netload=totalloadminuswindandsolarpowergeneration.Source:IEA(2021),ReformingKorea’sElectricityMarketforNetZero.Aselectricitysystemsexperienceincreasinglypronouncedhourlyandsub-hourlyramps–real-timeincreasesanddecreasesinelectricitysupplyinresponseto13Netloadrangesfromaminimumof-108GW(whenvariablerenewablesoutputexceedsdemand,resultinginpotentialcurtailment,ordisconnectionfromthegrid)toamaximumofplus115GW,i.e.arangeof223GWin2035,comparedtoarangeof54GW(32GWto86GW).-150-100-50050100150JanFebMarAprMayJunJulAugSepOctNovDecGWHourlynetload20202035-150-100-50050100150NetloaddurationcurveNuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage63IEA.Allrightsreserved.changesinload–andlargerdifferencesbetweenminimumandmaximumdailydemand,theneedforintradayflexibilityonthesupplyanddemandsideswillgrow.Thisflexibilitycanbeprovidedbypumpedstorageandbatteries,aswellasdemandresponseprogrammes,includingsmartvehiclecharging,appliancesandthermostats.Themorefrequentoccurrenceofperiodsduringthedaywithveryloworevenzeroprices,whenloadismetentirelybyzeromarginalcostrenewables,willprovideopportunitiesforenergy-intensiveindustriesthatcanadjusttheirproductionschedulesflexiblytoreducetheircosts.Theoptimalmixofdispatchablecapacitytomeettheshiftingdemandcurveinanygivensystemisdeterminedbytherelativecostofinputfuelsandthecapitalandoperatingcostsofeachtypeofplant,takingaccountoftheircapacityfactors.Aseachgeneratingoptionhasamixoffixedandvariablecosts,plantswithhighfixedcostsbutlowoperatingcostsoperatemosteconomicallyathighercapacityfactors.Thosewithlowfixedcostsbuthighoperatingcostsoperatemoreeconomicallyduringpeakperiods.InKorea,forexample,netloadatpresentismetbyamixofoil,naturalgas,coal,hydroandnuclearpower,inincreasingorderofutilisation.Asthesharesofwindandsolarincrease,thechangingshapeandlevelofthenetloaddurationcurveaffectthewaynetloadismetconsiderably,asthecostsoflowemissionsdispatchabletechnologiesfallrelativetothoseofhigh-emissionssourceslikecoalandgas.A“screeningcurve”approachshowshowthesedispatchablegeneratingresourcescomplementeachotherintheKoreannetzeroscenario.Thescreeningcurvetakesthetotalcostofaresource,includingitsannualisedcapitalcosts,operatingandmaintenancecosts,andfuelcosts,andfindsthelowestcostsolutionateachcapacityfactoralongthenetloaddurationcurve.Thelowest-costresourceisthenmappedontothenetloadcurvetodetermineboththeamountofcapacityneededandtheexpectedtotalenergysuppliedbyeachresource.Inthescenario,nuclearaccountsforthebulkofdispatchablegenerationin2035,whilecoalandgasareusedaspeakingresources.Inothersystemswithhighernuclearconstructioncostsandlowercoalandgasprices,thecontributionofnuclearwouldbelowerandthatofcoaland/orgashigher.Incompletelydecarbonisedelectricitysystems,peakingresourcescouldincludelow-carbonfuelslikeelectrolytichydrogenandammoniaandtheintermediate(mid-load)resourcecouldbecoalorgasplantswithCCUS.TheuseoflowcarbonfuelsasapotentialpeakingresourceisexploredinmoredetailintheIEAreport,TheRoleofLow-CarbonFuelsintheCleanEnergyTransitionsofthePowerSector.NuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage64IEA.Allrightsreserved.IllustrativelowestcostdispatchablepowergenerationmixtomeetnetloadinKorea,2035IEA.Allrightsreserved.Note:Netload=totalloadminuswindandsolarpowergeneration.Theanalysisassumesa7%weightedaveragecostofcapital.Source:IEA(2021),ReformingKorea’sElectricityMarketforNetZero.DesignadaptedfromBaiketal(2021).DispatchablelowemissionsgenerationAppropriatemarketdesigniscriticaltoachieveacleanandsecurepowersystemtransformation,atleastcostMarketreformsneedtovaluethebenefitsbroughtbynuclearpowerandotherlow-carbonanddispatchablegeneratingoptions.Theelectricitysupplyindustryhasbeenliberalisedorisintheprocessofbeingliberalisedinmostadvancedeconomiesandagrowingnumberofemergingmarketanddevelopingeconomies.Acompetitivewholesaleelectricitymarketisthecentralfeatureofaliberalisedpowersystem,aimedatsendingeconomicallyefficientcost-reflectivepricesignalswhilerespectingphysicalsystemconstraints.Thisrequirescoordinatingtheactionsofeachparticipant–generatorsthatmakeavailableenergyandotherservicestothesystemandwholesalebuyers–inrealtimethroughbids,inwhichthelastsourceofsupplydrawnuponinthemeritordersetsthepriceforeveryone.TotalgenerationcostGasCoalNuclear0200004000060000800001000001200000200400600800100012001400160018002000220024002600280030003200340036003800400042004400460048005000520054005600580060006200640066006800700072007400760078008000820084008600MWAnnualOperatingHoursNuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage65IEA.Allrightsreserved.Marginalcostpricing,wherebythecostliestactiontakentobalancethesystemsetstheprice,encouragesefficientoutcomesbecausethepricereflectstheaggregatesupplyanddemandofallsystemactors.Eachgeneratorproducesuntilthepointatwhichitsmarginalcostisequaltothepricereceivedinthemarket,whilecustomersconsumeelectricityonlywhenitscostislessthanthevalueoftheirconsumption.Atthemarketprice,noactorisenrichedbychangingtheirlevelofsupplyordemand.Dispatchingpowerthiswayencouragesefficientinvestmentdecisions,astherevenuesearnedinthewholesalemarketattimeswhenmarketpricesexceedvariableoperatingcostsallowgeneratorstorecovertheirinvestmentcostsandearnarateofreturn.Wholesalemarketprices,whichcanvarygreatlybylocationandtime,guidedecisionsbygeneratorsaboutoperationalbehaviour,investmentinnewphysicalsystemassetsandtheretirementsofexistingassets.Expectationsofspotmarketpricesformthebasisoffinancialinstrumentsusedtohedgepriceexposureorforspeculation.Investmentdecisionsneedtotakeaccountoftherelativemeritofpeakingorbaseloadgeneratingcapacityorstoragetechnology(suchasbatteries),whichisdeterminedbytheamountofpricevolatilityinthesystem.Forelectricityretailerswhobuyfromthewholesalemarket,thesepricesformthebasisofthetariffsofferedtotheircustomers,whichmayincludepricesthatvaryaccordingtotime.Itis,therefore,imperativethatspotmarketpricesaccuratelyreflectboththecostofprovidingelectricityservicesandtheactualeconomicvalueofelectricitytakingaccountofenvironmentalfactors,includingCO2emissionsingeneration.CarbonpricingputsanexplicitvalueonthelowemissionsbenefitsofnuclearpowerInacompetitivesystem,itiscrucialthatthecostofCO2emissionsisreflectedinthepriceofelectricitygeneratedfromfossilfuelssoastofavourgeneratingoptionsthatincurlittleornoemissions,suchasnuclearpower.Thisencouragesamoredecarbonisedenergysystematthelowestcost.Acarbonpriceistheprincipalmechanismforachievingthis.Carbonpricingaffectsthemeritorderofgeneration,encouragingemissions-savingbehaviouratanygiventimeandlocationthroughfuelswitchingandthestorageofrenewablesforlateruse.Inprinciple,includingacarbonpriceinthewholesalemarketprice,eitherthroughanemissionstradingsystemorcarbontax,iseconomicallymoreefficientthanothertypesofdecarbonisationincentivebecauseittargetsemissionsdirectlyanddoesnotdiscriminatebetweentechnologies,whetheronthesupplyordemandside(energyefficiencyanddemandresponse),otherthanonthebasisofCO2emissions.NuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage66IEA.Allrightsreserved.IllustrativeexampleoftheshiftinthemeritorderduetoacarbonpriceIEA.Allrightsreserved.Source:IEA(2021),KoreaElectricitySecurityReview.NuclearpowerisalwaysbehindbothwindandsolarPVinthemeritorderinwholesalemarkets,evenwithcarbonpricing,asthelatterhaszeromarginalcosts.However,theintroductionofcarbonpricingoranincreaseintheCO2pricehastheeffectofpushingupthecostoffossil-basedgenerators,whichraisesthewholesaleelectricitypriceandincreasestherevenuesreceivedbynuclearplantswithoutchangingtheircosts.Intheillustrativeexample,thechangeinthegeneratingcostoffossilplantsresultsinachangeinthemeritorderandroughlydoublesthemarginalprice.Thishelpstocompensateforanydeclineinthedemandfornuclearpowercausedbyrisingvariablerenewablescapacity,whichautomaticallypushesnucleardownthemeritorder.Althoughcarbonpricinghasbeenintroducedintheelectricityandothersectorsinmanypartsoftheworld,priceshaveoftenbeentoolowtohaveasignificantimpactoninvestmentdecisionsonnewcapacity.Atpresent,some45countriesand34subnationaljurisdictionshavesomeformofcarbonpricingscheme,coveringover21%ofgreenhousegasemissions.CO2emissionstradingsystemshavebeenimplementedinseveralelectricitymarkets,includingtheEuropeanUnion,agroupofstatesinthenortheasternUnitedStatesandCalifornia,andChina,whereanationalschemewaslaunchedin2021,immediatelybecomingtheworld’slargestcarbonmarket(byvolume)coveringover4GtofCO2emissions.Untilrecently,carbonpricesinmostofthesesystemshavebeenlow,havingonlyamodestimpactonwholesaleelectricityprices.Thishaschangedrecently,withsignificantincreasesoccurringinEurope,wherepricessurgedtoaroundEUR100/tinearly2022,thoughtheyfellbacksharplyinthewakeoftheRussianinvasionofUkraine;permitshadpreviouslyneverconsistentlytradedaboveEUR30/t.PriceshavealsorisenintheUnitedStates,thoughtheyhavestagnatedinChina.PriceQuantityMeritorderRenewablesNuclearCoalGasCoalwithCCUSMeritorderwithcarbonpriceEmissionscostsDemandDemandNuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage67IEA.Allrightsreserved.CarbonpricingmechanismsareimplementedonlyinpartacrosstheUnitedStates.Asaresultofanexpansioninvariablerenewablescapacityandstagnatingelectricitydemand,nuclearpowerplantshavebeencomingunderincreasingfinancialpressureinsomestates.Since2013,12nuclearplantshaveclosedforfinancialreasons,andseveralothersremainatriskofclosure.Somestateshaveadoptedzeroemissioncreditsasatemporarymeasuretoprovidefinancialreliefandsupportthecontinuedoperationsofnuclearreactors.Thecreditsworkinasimilarwaytorenewableobligations,whichareusedinsomeotherstates,providinganadditionalrevenuesourceforlowemissionstechnologies.Morerecently,aspartoftheBipartisanInfrastructureLawof2021,aUSD6billionCivilNuclearCreditProgramwaslaunchedtohelppreservethenuclearfleet.Undertheprogramme,ownersoroperatorsofcommercialreactorscanapplyforcertificationandcompetitivelybidforcreditstosupporttheircontinuedoperation.RemunerationforcapacityandancillaryservicesWholesalemarketprices,evenwithhighscarcityandcarbonprices,maynotinduceadequateinvestmentindispatchableassetsifpricesignalsarevolatileorprojectsaresubjecttootherrisksthataredifficulttohedge,likepolicyrisk.Thismaybethecaseforlong-livedassetlikenuclearpowerplantswithlargeinvestmentcostsandlowoperatingcosts.Theprovisionofelectricitysystemservicesotherthanthesupplyofenergy,includingcapacityavailabilityandancillaryservices(avarietyofoperationsrequiredtomaintaingridstabilityandsecurity),canbeincorporatedintowholesalemarkets.Thisisalreadythecaseinseveralcountries.Thecostsofthesesystemservices,harmonisedwiththeenergymarket,needtobeembeddedinthemarginalcostofelectricityforthesystemtooperateefficientlyinacompetitivemarket.Thisensuresthatthepricespaidfortheservicesincreaseduringperiodsofsystemstress,suchaswhenshortagesofreservecapacityemerge,soastorewardactionstakenbymarketparticipantstorelievestress.Capacitymechanisms,whichremunerategeneratorsformakingcapacityavailableatexistingandfutureplant,havebeenadoptedinseveralmarketsasawayofattractinginvestmentinnewcapacityorkeepingexistingplantsfromretiringprematurely.CapacitymechanismsarecommoninUSmarketsandhavebeenintroducedinsomeEuropeancountries,includingFranceandtheUnitedKingdom.Nuclearpowercanbenefitfromthesemechanismsbyguaranteeingaportionoftheirrevenuesonanannualorlongerbasis.Thiscanlowerthecostofcapitalandhelptomakeplantsmorefinanceable.Butcapacitymechanismsneedtobedesignedsothattheyrewardactualcontributionstosystemsecurityinsteadofjustyear-roundavailability.Thereareconcernsthatpoorlydesignedmechanismscanleadtooverinvestmentandexcessivecostsandprices,especiallyifwholesalemarketsdonotfunctionwell.NuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage68IEA.Allrightsreserved.Adequatelyremuneratingtheprovisionofancillaryservicescanalsobeameansofboostingrevenuestotheoperatorsofnuclearreactors,therebyincreasingtheirprofitabilityandtheattractivenessofinvestingintheminthefirstplace.Flexiblenuclearpowerplantscantypicallyincreaseorreducepowerby10%withinafewminutestocontroltheflowofalternatingcurrentpowerfrommultiplegeneratorsthroughthenetwork(frequencycontrol)andbyupto80%withinafewhourstomeetloadvariation.Theeffectsofcarbonpricingandcapacityremuneration:acasestudyCarbonpricingandcapacityremuneration,eitherthroughscarcitypricingoracapacitymarket,canboostsignificantlythecompetitivenessofnuclearandotherlowemissionsgeneratingoptionsvis-à-visfossilfuelbasedgeneration.Thiswouldlowertheneedforout-of-marketincentives,suchastaxcreditsorfeed-intariffs,tobuildandoperatelow-carbongenerationsources.Inordertoillustratethis,wehavetakentheresultsfromthehourlymodelofChina’selectricitymarketbasedonits2060carbonneutralitytarget,intheyear2035,andtestedhowaCO2priceaffectstheprofitabilityofdifferentgenerationtypes.IntheabsenceofaCO2price,noneofthemaingenerationtypeswouldearnenoughrevenuethroughtheenergymarkettosupportnewinvestment.IntroducingscarcitypricingandassumingaUSD100/tCO2priceincreasessubstantiallytheprofitabilityofalllowemissionsgeneratingtypes,makingtheoperationandconstructionofnewcapacitymorefinanciallyattractive.ImpactofCO2priceandcapacityscarcitypricingonprofitabilityofelectricitygenerationinChinabytype,2035IEA.Allrightsreserved.Notes:PSH=pumpedstoragehydropower.Thecomparisonisbetweennetenergyrevenuesontheonehandandfixedoperationandmaintenanceandannualisedcapitalcostsontheother.Theweightedaveragecostofcapitalisassumedtobe7%.Theanalysisisbasedonthesystemreferencemarginalcostandscarcitypricing,withanassumedCO2priceofUSD100/t.Source:IEA(2021),AnEnergySectorRoadmaptoCarbonNeutralityinChina.0%100%200%300%GasCoalSolarWindNuclearHydroPSHBatteryPercentageoftotalcostofnewentry2035netenergyrevenues2035netenergyrevenueswithscarcityandUSD100/tCO2priceNuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage69IEA.Allrightsreserved.AverageannualrevenuefornuclearpowerinthiscasestudyincreasesfromUSD130/kWtoUSD640/kWwhenscarcitypricingandaUSD100/tCO2priceareadded.ThiscompareswithanannualisedcostofnewcapacityofUSD260/kW,ofwhichfixedoperationandmaintenancemakeupUSD90/kW.WithoutscarcitypricingoraCO2price,revenuesarehighenoughtocovertheoperatingcostsofexistingreactors,butnottomakenewplantsprofitable.ImpactofCO2priceandcapacityscarcitypricingonprofitabilityofnuclearpowerplantsinChina,2035IEA.Allrightsreserved.Notes:Theweightedaveragecostofcapitalisassumedtobe7%,theconstructioncostUSD2500/kW,constructiontime7yearsandtechnicallifetime60years.Theanalysisisbasedonthesystemreferencemarginalcostandscarcitypricing,withanassumedCO2priceofUSD100/t.Source:IEA(2021),AnEnergySectorRoadmaptoCarbonNeutralityinChina.ElectrolytichydrogenandheatproductionThissectionlooksattwonewwaysinwhichnuclearpowercouldbeused,beyondsimplysupplyingelectricitytothegrid:theon-siteproductionoflow-carbonhydrogenandthelarge-scalesupplyoflowemissionsheattoindustrialconsumersanddistrictheatingnetworks.TheseapplicationsarenotdeployedintheNZEoneconomicgrounds:renewables,suchasbioenergy,solarthermalorgeothermal,andotherlowemissionsenergysourcesmaytobeabletomeetneedsmorecheaply.However,fasterthanexpectedreductionsinthecostofnuclearpowercouldinprincipleenableittocompeteoncost,openingupnewopportunitiesinthesemarkets.Today,hydrogenisanimportantfeedstockinthechemicalindustryandinrefineries.IntheNZE,theglobaluseofhydrogenandhydrogen-basedfuelsexpandsrapidlytoreduceemissionsinhard-to-abatesectorsthataredifficulttoelectrify,suchasheavyindustryandlong-distancetransport.Blendinghydrogenintonaturalgasgridsplaysanincreasinglyimportantroleasameansofreducingemissionsinend-usesectors.Itisalsoblended,intheformofammonia,withcoalandusedintheelectricitysector,-132380-2000200400600800RevenuesCostsProfitsRevenuesCostsProfitsNoscarcityorcarbonpricingScarcityand100USD/tCO2USD/kWperyearNetenergyrevenuesAnnualfixedcostAnnualisedcapitalcostProfitsNuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage70IEA.Allrightsreserved.thoughonarelativelysmallscalegivenitshighcost.Globalhydrogenconsumptiongrowsfromroughly90Mt/yeartodayto212Mt/yearin2030and390Mt/yearby2040.Theshareofhydrogenthatislow-carbon,i.e.,producedwithoutunabatedfossilfuels,risesfrom10%to70%in2030andover90%in2040.Morethanhalfofitisproducedbyelectrolysis,withtheremainderfromcoalorgaswithCCUS.Nuclear-poweredelectrolysiscouldprovideasourceoflowemissionshydrogenManyelectrolytichydrogenprojectscurrentlyunderdevelopmentarelinkedtovariablerenewables,eitherphysicallyorthroughpowerpurchaseagreements.Locatinganelectrolyserclosetothepointofgenerationcanreducethecostofelectricitythroughlowergenerationandtransmissioncosts,aswellasmakingiteasiertoverifythatthehydrogeniscertifiablylowemissions(hydrogenproducedfromelectricitytakenfromthegridisonlyas“lowemissions”astheelectricityitself).ThistrendacceleratesintheNZE,withmorethan75%ofinstalledelectrolysercapacitybeinglinkedtoatleastonerenewableenergysourceby2040.Considerationisbeinggiventotheideaofdevotingallormostoftheoutputofanuclearpowerplanttotheelectrolyticproductionofhydrogenasanalternativetorenewables-basedproduction.Thekeyadvantageofnuclearpowerplantsisthattheyaredispatchableandabletooperateatveryhighannualcapacityfactors,enablingahighutilisationoftheelectrolyserandtheproductionofsteadyandadjustablestreamsoflow-carbonhydrogen.Thismeansthatlesshydrogenstorageisrequiredtosmoothoutdaily,monthlyandseasonalfluctuationsinthesupplyofhydrogen.Astable,reliableflowofhydrogenisimportanttoindustrialusersinparticularformakingoptimaluseoftheirproductionfacilities.Therearecurrentlyaroundadozendemonstrationelectrolyserprojectsindevelopmentwithacombinedcapacityof250MWthatareexploringtheuseofnuclearpowerinCanada,China,Russia,Sweden,theUnitedKingdomandtheUnitedStates.Somecommercialprojectsarealsoadvancing.Forexample,inearly2021,theoperatoroftheOskarshamn-3boilingwaterreactorinSwedenenteredintoanagreementwithLinde,achemicalscompany,tosupplyhydrogenfromoneofitson-siteelectrolyserspowereddirectlybytheplant.NuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage71IEA.Allrightsreserved.AlternativetechnologiestoproducehydrogenfromnuclearenergyMostoftheelectrolysersinproductionorunderconstructiontodayuseconventionalpolymerelectrolytemembraneoralkalinetechnologies.Newelectrolysertechnologiesthatcouldbetterexploitthecharacteristicsofnuclearpowerareunderdevelopment.Onepromisingtechnology,whichcouldbecompatiblewithcurrentandadvancednuclearreactordesigns,ishigh-temperatureelectrolysisbasedonsolidelectrolysiscells,whichuseceramicsastheelectrolyteandsteamforelectrolysis.Thistechnologypromiseselectricalefficienciesof79-84%(lowerheatvalue),comparedwith67-80%forconventionallow-temperatureelectrolysis.Nuclearpowerplantscouldprovideboththesteamandtheelectricitynecessarytodrivetheprocess.Becauseoftheirhigherefficiency,solidelectrolysiscellsmaybeacheaperwayofmakinghydrogenusingnuclearelectricity.Dependingonthelevelisedcostofelectricityofthepowerplant,anincreaseinelectrolyserefficiencyfrom70to80%,forexample,wouldreducethelevelisedcostofhydrogenbyUSD0.2/kgtoUSD0.6/kg(in2020USD).However,thetechnologyisstillatthedemonstrationphaseforlarge-scaleapplications.Thebiggestsysteminoperationissmallerthan1MW,althoughlargerprojectsarecurrentlybeingdeveloped,puttingthetechnologyonthepathtowardscommercialisation.Advancednuclearreactorswithcoolantoutlettemperaturesof800°Cto1000°Ccouldbecomeanoptionforthethermochemicalproductionofhydrogen.Thermochemicalcycles,suchassulphur-iodine,usehigh-temperatureheat(greaterthan950°C)todriveaseriesofchemicalreactionsthatsplitwaterintohydrogenandoxygen.Thechemicalscanbereusedinaclosedloopandwaterandthermalenergyaretheonlyotherinputsrequired.Sincethereactor’sthermalenergyisuseddirectly,theefficiencylossesassociatedwithfirstconvertingthermalenergyintoelectricityandthenintohydrogenareavoided.Whileathermochemicalcycleoperatingat950°Ccanreachathermalefficiencyofover40%,thethermalefficiencyofareactorwithasteamturbineturningagenerator,whichthensuppliesanelectrolyserwithelectricity,isonlyaround20-30%.Usingaveryhigh-temperaturereactortodrivethermochemicalhydrogenproductioncould,therefore,resultinlowerhydrogenproductioncoststhanifthesamereactorwereusedtopoweranelectrolyser.However,bothveryhigh-temperaturereactorsandthermochemicalhydrogenproductionarestillinanearlystageofdevelopmentandareunlikelytobecommerciallyavailableatscalebefore2030.Hightemperaturegas-cooledreactorscouldbesuitableforhydrogenproduction.AdemonstrationprojectwasconnectedtothegridinChinainDecember2021.At750°C,itscoolantoutlettemperatureishighenoughtosupporthigh-temperaturesteamelectrolysis.Researchisunderwaytoboosttemperaturestoover950°C,whichwouldallowhightemperaturegas-cooledreactorstobeusedforthermochemicalhydrogenproductionaswell.InSeptember2021,TsinghuaUniversity,ChinaNationalNuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage72IEA.Allrightsreserved.NuclearCorporationLimited,ChinaHuanengGroupLimited,ChinaBaowuIronandSteelGroupLimitedandChinaCiticGroupLimitedestablishedatechnologyalliancetodevelopandscaleupHTGR-basedhydrogenproduction,focusingonapplicationsinthesteelandchemicalssectors.InJapan,theHighTemperatureEngineeringTestReactor,whichwasshutdownforsafetychecksfollowingtheaccidentatFukushimaDaiichi,resumedoperationsin2021.Athermochemicalhydrogenproductioncycleusingthisreactoriscurrentlyunderdevelopment,withdemonstrationproductionscheduledtobegininthelate2020s.Sources:POWER(2022),ChinaStartsUpFirstFourth-GenerationNuclearReactor;Sato,H.(2021),RoleofHighTemperatureGas-cooledReactorTechnologiestoAttainCarbonNeutrality,IAEATechnicalMeetingontheRoleofNuclearCogenerationApplicationsTowardsClimateChangeMitigation,October11-13.Thecompetitivenessofnuclear-basedhydrogenproductionwouldrequireabigreductionincostsSubstantialcapitalcostreductionsrelativetobothrenewablesandfossilfuelswithCCUSwouldbenecessaryfornuclearpowertobecomeacost-competitiveoptionforlarge-scalehydrogenproduction.Thecostofproducinghydrogenthroughelectrolysispoweredbyanewdedicatednuclearpowerplantisdeterminedmainlybytheupfrontcostofbuildingthereactor,whichiscurrentlyveryhigh.TherapidrolloutofrenewablesandelectrolysersintheNZEleadstoamarkeddeclineinthecapitalcostofbothupto2030.Thissubstantiallyreducesthelevelisedcostofproducinghydrogenfromelectrolysispoweredbyrenewableelectricity,especiallyinregionswithlargerenewableenergypotentialsuchastheUnitedStates,partsofwesternEurope,China,India,andtheMiddleEast.Inthoseregions,costsareprojectedtofalltoaslittleasUSD1.10/kgofhydrogen(kgH2)in2020USDby2040.Insomeregions,producinglow-carbonhydrogenwithfossilfuels–primarilynaturalgasandcoal–inconjunctionwithCCUSisprojectedtobecomeaviablealternativetorenewablesontheassumptionthatfossilfuelpricesfallbackfromtheircurrentrecordlevels.Thecostofthatproductionrouteisdeterminedmostlybythepriceoftheinputfuel.AtanaturalgaspriceofUSD12/mmBtu(comparedwithUSD50/mmBtuattheTTFhubintheNetherlandsinthefirsthalfofMarch2022),thelevelisedcostofhydrogenproducedbysteamreformingnaturalgaswithCCUSwouldbearoundUSD3/kgH2in2030and2040.Similarly,withacoalprice14ofUSD125/t(comparedwithoverUSD360/tattheAntwerp-Rotterdam-AmsterdamhubinthefirsthalfofMarch2022),thecostofproducinghydrogenfromcoalgasificationwithCCUSwouldbearoundUSD2.90/kgH2in2030and2040.IntheNZE(asmodelledin2021,priortothecurrentenergycrisis)gaspricesfallbackintotheUSD2-6/mmBturangeinmanymarkets,whilecoalpricesfalltoaroundUSD22/tonneintheUnitedStates,USD44/tinEuropeandUSD60/tinEastAsia.Atthesefuelprices,thelevelisedcostsofproducinghydrogenaremuchlower,averagingUSD1.30/kgH2-1.80/kgH2forgaswithCCUSandUSD2.00/kgH2-2.40/kgH2forcoalwithCCUS.14Reflectingminemouthpricesplustransportandhandlingcosts.NuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage73IEA.Allrightsreserved.Asthingsstand,newnuclearpowerplantsasapowersourceforelectrolysersappearunlikelytobecompetitivewithrenewablesorfossilfuelswithCCUStoproducehydrogeninmanypartsoftheworld.ComparedwithfossilfuelswithCCUS,nuclear-poweredelectrolysiswouldbeacompetitiveoptiononlyifinvestmentcostsfornuclearpowerplantscouldbereducedtobelowUSD2000/kW(costscurrentlyrangefromUSD2800/kWtonearlyUSD13000/kW)andgasandcoalpricesweretoremainaboveUSD9/mmBtuandUSD70/trespectively.Suchadevelopmentcannotbeexcluded.However,tobecompetitivewithrenewableelectricityincountrieswithastrongrenewableresource,nuclearinvestmentcostswouldneedtofallevenfurther,toaroundUSD1000/kWinordertoproducehydrogenatacostofaboutUSD2/kgH2in2030.Inshort,dedicatednuclear-basedhydrogencouldbecomeaviableoptiononlyinregionswithmorelimitedrenewablespotentialandhighercosts,orifcoalandgaspricesremainhighbyhistoricalstandards.Levelisedcostofhydrogenproductionbyenergysource/technologyIEA.Allrightsreserved.Notes:Levelisedcostistheaveragenetpresentvalueofthecostofproducinghydrogenusingrenewableelectricityforaplantoveritsoperatinglifetime.Thecostofhydrogenproductionfromnuclearpowerisforanuclearpowerplantoperatingatanaverage85%annualutilisation,withovernightinvestmentcost(CAPEX)rangingfromUSD1000/kWtoUSD6000/kW,assumingaweightedaveragecostofcapitalof7%,aconstructiontimeof6yearsandadepreciationperiodof35years.Fortheelectrolyser,investmentcostsofUSD463/kWandanefficiencyof69%areassumedfor2030,andUSD386/kWand72%for2040.Thedepreciationperiodoftheelectrolyseris25years,withalifetimeofthestack(wherethesplittingofwaterintohydrogenandoxygentakesplace)of50000hours.ThecostrangeforgaswithCCUSisforthesteamreformingofnaturalgaswithpricesbetweenUSD2/mmBtuandUSD12/mmBtu.ThecostrangeforcoalwithCCUSisforcoalgasificationwithcoalpricesbetweenUSD25/tandUSD125/t.Itshouldbeemphasisedthatthisanalysisonlyconsidersproductioncosts.Itdoesnottakeintoaccountotherpotentialbenefitsthattheuseofnuclearpowerforhydrogenproductionmayoffer,suchasitsdispatchabilityandabilitytoproduceinaconstantmanner,northedrawbacks.Withnuclear,largevolumesofhydrogencouldpotentiallybeproducedclosertowhereitisconsumed,reducingtheneedforhydrogentransportanddistributioninfrastructureand,thus,deliverycosts.Transportinghydrogenoveradistanceof1000kmbypipelinewouldaddUSD0.40/kgH2to1.80/kgH2tothetotalcostofsupply,dependingontheline’scapacityandthroughput.Maritimeshippingwouldcostevenmore,atUSD1.20/kgH2to1.80/kgH2forthesamedistance.Lowercostsmightbepossibleiftheexistingnaturalgaspipelineinfrastructurecanbeconverted,butthisoptionisnotavailableCAPEX:6000USD/kWGas:12USD/mmBtuCoal:125USD/tonneCAPEX:2000USD/kWGas:2USD/mmBtuCoal:25USD/tonne0246820302040203020402030204020302040NuclearGaswithCCUSCoalwithCCUSRenewablesUSD(2020)perkgH2NuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage74IEA.Allrightsreserved.everywhere.Furthermore,comparedwithlow-carbonhydrogenbasedonfossilfuelswithCCUS,nuclearbringsenergysecuritybenefitsasitisfarlessvulnerabletovolatileinputfuelprices.HydrogenproductioncouldexploitsurplusnuclearpowerUsingelectrolysistotakeadvantageofcurtailednucleargenerationandlowwholesalepricesduringperiodsoflowelectricitydemandcouldbeamoreviableoption.Thiscouldraisethecapacityfactorsoftheseplantsandprovideanadditionalrevenuestreamtotheiroperators.IntheNZE,thefast-growingsharesofvariablesolarPVandwindintheglobalelectricitymix,aswellastheprogressiveelectrificationofenergyendusessuchasheatingandroadtransport,erodesthecapacityfactorsofbaseloadpowergeneratingplants,includingnuclearplants,asrenewablesincreasinglydrivenuclearpowerdownthemeritorder.Theyalsoincreasetheneedforsystemflexibility.Flexiblehydrogenproductioncouldprovideameansofexploitingunderutilisedcapacity.IntheNZE,theaveragecapacityfactoroftheglobalfleetofnuclearpowerplantsfallsfrom84%in2030to76%in2040and77%in2050,whiletotalinstalledcapacityincreasesfrom512GWin2030to730GWin2040and812GWin2050.Raisingthecapacityfactoroftheglobalnuclearfleetto90%andusingtheadditionalelectricityforelectrolysiswouldtheoreticallyallowfortheproductionofadditionallow-carbonhydrogen,reaching6Mt(4%oftotallow-carbonhydrogenproduction)in2030,19Mt(5.5%)in2040and20Mt(3.9%)in2050.Morehydrogencouldbeproducedusingtheglobalfleetofnuclearreactors,butthiswouldmeanreducinglowemissionselectricityoutput.GlobaltechnicalhydrogenproductionpotentialfromnuclearelectricitygenerationwithanincreasedcapacityfactorintheNetZeroEmissionsby2050ScenarioIEA.Allrightsreserved.Note:Hydrogenproductionpotentialassumesanincreaseinthecapacityfactorto90%from84%in2030,76%in2040and77%in2050asprojectedintheNetZeroEmissionsby2050Scenario,withalltheadditionaloutputusedtoproducehydrogenusingelectrolysers.0%1%2%3%4%5%6%510152025203020402050MtHydrogenproductionpotential(leftaxis)Shareofgloballow-carbonhydrogenproduction(rightaxis)NuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage75IEA.Allrightsreserved.Thetechnicalpotentialforproducinghydrogenusingnuclearpowerthatwouldotherwisebecurtailedisgreatestforsystemswithhighsharesofnuclearintotalcapacityandwherenuclearplantsareregularlyusedtoload-follow,suchasinFrance.Arecentstudysuggeststhatcloseto70%ofEurope’sadditionalsparenucleargenerationpotentialby2030wouldbeinFrancealone.Theeconomicpotentialofthismodeofhydrogenproductionissystem-andmarket-specific:itdependsontheoperatingprofileofthenuclearpowerplant,thecapacityfactoroftheelectrolyserandelectricitypricesacrosstheyear.Wheretherearegridconstraints,divertingelectricitytoaflexibleon-siteelectrolysercouldincreasetheflexibilityofelectricitysystems.Theoptimalsizeoftheelectrolyserateachplantwouldbedeterminedbythecompetingobjectivesofmaximisingtheannualutilisationoftheelectrolyserandtakingadvantageofcheapelectricityduringlow-priceperiods,aswellastheoperationalflexibilityofthepowerplant.Conditionsonthehydrogenside,includingproximitytomarketsorhydrogentransportinfrastructure,flexibilityrequirementsandthecostofproducinghydrogenfromcompetingoptions,wouldalsobeimportantfactorsindeterminingtheeconomicviabilityofnuclear-basedhydrogenproduction.Nuclear-basedheatproductionisanotherpossibilitySupplyingheatproducedinconjunctionwithelectricitybynuclearreactorstolargeindustrialcustomers(processheat)ordistrictheatingnetworksisanotherpossibility.Today,theproductionofindustrialprocessheataccountsforroughlytwo-thirdsoftotalindustrialfinalenergydemand,slightlylessthanhalfofwhichisforhigh-temperatureheat(above400⁰C).IntheNZE,demandforcommercial,lowemissionsheat,mostlyindistrictheatingnetworks,growssharplyover2021-2040,byabout400PJperyearonaverage,becauseoftheneedtoreplaceunabatedfossilfuels.ThisrequiresinvestmentsaveragingaboutUSD20billion/year(in2020USD)inthe2020sandoverUSD30billion/yearinthe2030s.After2040,growthindemandfornewlowemissionsheatisminimalasmostheatisalreadydecarbonisedbythen.AlthoughimprovementsinenergyefficiencyreduceoverallheatdemandintheNZE,thepushtodecarboniseitcouldpresentanopportunityfornuclearpowerplantsiftheycanbecost-competitive.Currentreactordesignsarewell-suitedtosupplylargeamountsoflow-tomedium-temperatureheattoindustrialconsumersanddistrictheatingnetworks.Typically,onlyaroundone-thirdofthethermalenergyproducedbyareactorisconvertedintoelectricity,whiletheremainderisejectedintotheenvironment.Inanuclear-basedco-generationplant,someofthatexcessthermalenergyisconvertedintousefulheatthroughheatexchangers.Nuclearco-generationhashistoricallymostlybeenusedinEuropeandcountriesoftheformerSovietUnion.InSwitzerland,forexample,heatextractedfromtheBenznauandGösgennuclearpowerplantsisfedintoheatnetworkssupplyingfactoriesandbuildingsinsurroundingtowns.InRussia,severalnuclearpowerplantssupplyheatNuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage76IEA.Allrightsreserved.tomunicipalheatingnetworks.Morerecently,nuclearco-generationhasattractedsignificantinterestinChina,wheremanynortherncitiesmaintainextensivedistrictheatingnetworksbasedmostlyoncoal.Thecountry’sfirstlarge-scalenuclearco-generationproject,inHaiyanginEasternShandongprovince,startedupinlate2020,supplyingheatextractedfromtwonewlycommissionedAP1000reactorstothelocalheatnetwork.Itprovidesheattoatotalfloorareaof4.5millionm2,avoidingtheconsumptionof180000tonnesofcoalduringthewinterheatingperiod.Fornucleartosupplyhigh-temperatureindustrialheat,advancedhigh-temperaturereactors,suchastheChinesehightemperaturegasreactor,wouldberequired.Today,high-temperatureheat(above400⁰C)isprovidedmostlyfromthecombustionoffossilfuels,makingitemissions-intensive.Producinghigh-temperatureheatdirectlyfromelectricityislikelytoremainimpracticalandcostlyinmostcases.LowemissionsalternativesincludecoalorgascombustionwithCCUS,biomassorhydrogencombustion.SomeSMRsbeingdevelopednowoperateatmuchhighertemperaturelevelsthanconventionallarge-scalereactors,allowingthemtobeintegratedwithandsupplyelectricityandheat(andpotentiallylow-carbonhydrogen)toindustrialfacilitiessuchaschemicals,ironandsteel,metalsmanufacturingornon-metallicmineralsindustries(seebelow).Aswithelectricityandhydrogen,competitivenuclear-generatedheatwouldrequirealargereductionincostsFornuclear-basedco-generationtobecompetitivewithfossilfuelsinconjunctionwithCCUS,biomassorelectricheatpumpsforindustrialapplicationsanddistrictheating,plantinvestmentcostswouldgenerallyneedtobebelowaboutUSD3000/kWe.Thecostofheatproducedusingthosealternativesisdeterminedmainlybyplantconstructioncostsandfuelinputprices.Forlow-tomedium-temperatureheatapplicationssuchasdistrictheating,heatproducedbyanaturalgasco-generationplantequippedwithCCUSwouldcostmorethanUSD40/GJ(in2020USD)basedonaconstructioncostofUSD2500/kWeandanaturalgaspriceofUSD12/mmBtu.Similarly,heatfromacoal-firedco-generationplantwithCCUSwouldcostuptoUSD60/GJassumingaconstructioncostofUSD5500/kWeandacoalpriceofUSD125/tonne.Werenaturalgasandcoalpricestoreturntothelong-termtrajectoryprojectedintheNZE,thecostofheatsuppliedbyfossilfuel-basedco-generationwithCCUSwouldbemuchlower,rangingfromlessthanUSD15/GJtoUSD50/GJ,withthelowerendoftherangerepresentingregionswithlowfossil-fuelpricesandplantconstructioncosts.Biomassco-generationplantscouldproduceheatforaslittleasUSD12/GJtoUSD25/GJifcheapfeedstocks,suchasagriculturalresidue,areavailablelocally.Large-scaleheatpumpscouldproduceheatforaslittleasUSD10/GJevenatcomparablyhighaverageelectricityprices.NuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage77IEA.Allrightsreserved.LevelisedcostofheatsuppliedtodistrictheatingnetworksbysourceIEA.Allrightsreserved.Notes:Co-gen=co-generation.Thelevelisedcostistheaveragenetpresentvalueofthecostofproducingheatforaplantoveritsoperatinglifetime.Thecostofheatproductionfromnuclearco-generationisforunitswithanovernightinvestmentcostrangingfromUSD2000/kWetoUSD6000/kWewithathermalefficiencyof75%,aconstructiontimeof6yearsandadepreciationperiodof35years.Allco-generationplantsareassumedtohaveaheat-to-powerratioof1andanannualutilisationof75%.AnaveragesellingpriceofUSD70/MWh(in2020USD)fortheelectricityproducediscreditedagainstthecostofheat.Auniformweightedaveragecostofcapitalof7%isappliedtoallinvestments.Thecostrangefornaturalgasco-generationwithCCUScorrespondstogaspricesofUSD2/mmBtutoUSD12/mmBtu,thatforcoalco-generationwithCCUStocoalpricesofUSD25/ttoUSD125/tandthatforbiomassco-generationtofeedstockcostsofUSD2/mmBtutoUSD20/mmBtu.TheassumedCCUScapturerateis95%.ACO2priceofUSD160/tisassumedtobeleviedonuncapturedemissions.Thelarge-scaleheatpumphasacoefficientofperformanceof3.5,andheatproductioncostscorrespondtoelectricityinputpricesofUSD20/MWhtoUSD100/MWh.Aswithelectricity,thecostofheatproducedbynuclearco-generationplantsismainlyafunctionoftheupfrontinvestmentcostoftheplant.AtacostofUSD4000/kWe,whichisclosetotheprojectedglobalaverageintheNZE,low-tomedium-temperatureheatproductioncostswouldbearoundUSD25/GJ,whichisabovethatforfossilfuelswithCCUSinmostregionsandwellabovethatusinglarge-scaleheatpumps.Tocompetewithlow-costfossilfuelswithCCUSandheatpumps,nuclearconstructioncostswouldhavetobelessthanUSD3000/kWeinmostcases.Planningandconstructiontimeswouldalsoneedtobereasonablyshortinordertolimittheriskofmajorcostoverruns.Publicacceptancecouldbeamajorconcern,sinceco-generationplantsneedtobesitedclosetopopulationcentrestominimisethelossesandassociatedcostsoftransmittingheatoverlongdistances.Forhigh-temperaturereactorstocompetewiththemainalternativesfortheprovisionofhigh-temperatureheat,heatproductioncostswouldneedtofalltoUSD5/GJtoUSD20/GJ,againimplyingthatplantinvestmentcostwouldneedtobenohigherthanUSD3000/kWe.Dependingonthepricesofcoalandnaturalgas,coalorgascombustionwithCCUSproducesheatatacostofUSD9/GJtoUSD20/GJ,withthefossilfuelpricesprojectedintheNZEyieldingcostsatthelowerendofthatrange.Biomasscombustioncouldbeevencheaperiffeedstockcostsareverylow,butsustainable,low-costbiomasspotentialsaretoosmallforittomakeasignificantcontributiontotheglobalhigh-temperatureheatsupply.Iflow-carbonhydrogenataGas:12USD/mmBtuCoal:125USD/tonneBiomass:20USD/mmBtuElectricity:100USD/MWhGas:2USD/mmBtuCoal:25USD/tonneBiomass:2USD/mmBtuElectricity:25USD/MWh204060802500130055001600380025001000400Nuclearco-genGasco-genwithCCUSCoalco-genwithCCUSBiomassco-genLarge-scaleheatpumpUSD(2020)perGJUSD/kWe:NuclearPowerandSecureEnergyTransitionsThecompetitivenessofnuclearenergyPage78IEA.Allrightsreserved.costofUSD1/kgtoUSD2/kgisavailable,hydrogencombustionwouldbeaneconomicallycompetitiveoptiontoo.LevelisedcostofhightemperatureheatproductionbysourceIEA.Allrightsreserved.Notes:Thelevelisedcostistheaveragenetpresentvalueofthecostofproducingheatforaplantoveritsoperatinglifetime.Thecostofheatproductionfromnuclearco-generationisforunitswithanovernightinvestmentcost(CAPEX)rangingfromUSD2000/kWetoUSD6000/kWe,aconstructiontimeof6years,adepreciationperiodof35yearsandanannualutilisationof75%.AnaveragesellingpriceofUSD70/MWh(in2020USD)fortheelectricityproducediscreditedagainstthecostofheat.Auniformweightedaveragecostofcapitalof7%isassumedforallinvestments.ThecostrangefornaturalgascombustionwithCCUScorrespondstogaspricesofUSD2/mmBtutoUSD12/mmBtu,thatforcoalcombustionwithCCUStocoalpricesofUSD25/ttoUSD125/tandthatforbiomasscombustiontofeedstockcostsofUSD2/mmBtutoUSD20/mmBtu.TheCCUScostisassumedtobeUSD70/tandtheCO2capturerate95%.ACO2priceofUSD160/tisassumedtobeleviedonuncapturedemissions.CAPEX:6000USD/kWeGas:12USD/mmBtuCoal:125USD/tonneBiomass:20USD/mmBtuHydrogen:4USD/kgCAPEX:2000USD/kWeGas:2USD/mmBtuCoal:25USD/tonneBiomass:2USD/mmBtuHydrogen:1USD/kg204060Nuclearco-gen(advancedhightemperaturereactor)GascombustionwithCCUSCoalcombustionwithCCUSBiomasscombustionHydrogencombustionUSD(2020)perGJNuclearPowerandSecureEnergyTransitionsSmallmodularreactorsPage79IEA.Allrightsreserved.4.SmallmodularreactorsHowcouldSMRshelpenergytransitions?Ourdiscussioninpreviouschaptershasfocusedonthegeneralopportunitiesandchallengesfacingnuclearenergyinenergytransitions.Adoublingofnuclearpowercapacitybymid-century,asenvisagedintheNZE,isclearlyanenormoustask,requiringcapitalspendingonnuclearpowerofUSD2.6trillionover2021-50isneededinthatscenario.Muchofthatcapitalwouldneedtobebackedbygovernmentsgiventheinvestmentrisksassociatedwithnuclearpowerprojects.Advancedreactorsthataresmallerinsize,moreaffordable,easiertobuildandoperate,andthereforeeasiertomanageandfinanceareanalternativeoracomplementtolarge-scalereactors.Acategoryofreactors,knownassmallmodularreactors(SMRs),holdparticularpromise.Thischaptermapsoutthenatureofthispromise,thestate-of-playwithSMRtechnologyandinvestment,andconsiderssomeofthekeyuncertaintiesthatlieahead.SMRsaregenerallydefinedasnuclearreactorswithanelectricalcapacityoflessthan300MWpermodule,thoughsomemodelsunderdevelopmentcouldbelarger.Theyincludemicro-modularreactorswhichhaveacapacityoflessthan10MW.Thevarietyofdesignsnowindevelopmentaroundtheworld,ofwhichthereareapproximately70,includedifferentunderlyingtechnologies,includingwater,gas,liquidmetalormoltensaltcooledreactors,aswellasdifferentfuelcycles.Theyvarymarkedlyaccordingtotheirlevelsoftechnologyandlicensingreadiness.Noneareasyetatthestageoffullcommercialisation.AsSMRsaresmallerthanexistingreactordesigns,theinvestmentneedsaresmallerinabsoluteterms.Theyareusuallydesignedtobefactorybuiltinmodulesandthentransportedtothesitewheretheyaretobeinstalled.Thisreducesprojectmanagementriskduringconstruction,oneofthemostsignificantchallengesinfinancinglargenuclearprojects.However,somedesignsrequiretransportoffullyfuelledcores,andtheassociatedtransportroutes,securityandsafeguardsaspects,shouldnotbeunderestimated.SeveralSMRdesignshaveinherentsafetyandwastemanagementattributesthatcouldsupportsocialacceptanceandunlocksignificantprivateventurecapitalforresearchanddevelopment,aswellasdemonstrationanddeployment.SMRsaredesignedtobedeployedinseries,usingaglobalsupplychaintoreducecosts,asisthecaseforothersectorssuchasnavalconstructionoraircraftmanufacturing.Theycouldbeinstalledassinglemodulesdistributedoverthewholeelectricitynetwork,whichcouldbeofparticularvalueincountriesorregionswithlessdevelopednetworks,inremoteareasorasdedicatedsourcesofelectricity,heatNuclearPowerandSecureEnergyTransitionsSmallmodularreactorsPage80IEA.Allrightsreserved.and/orhydrogenforcitiesandindustrialhubs.Theycouldalsobedeployedingroupsofmodulesonsinglesites.SMRsmayalsobewell-suitedtoreplacingfossilfuelpowerplants,takingadvantageofanexistingconnectiontothetransmissionnetwork,theavailabilityofwaterforcoolingandaskilledworkforce.SMRshaveseveraltechnologicalandfinancialattributesthatcouldunderpintheirfutureviabilitySMRshaveimportantattributesthatcouldequipthemwellforaroleinenergytransitions.Oneofthemostimportantistheirintrinsicsafetyfeatures.Lowerpoweroutputandsmallerreactorcoresshouldincreasetheeffectivenessofpassivesafetysystems.ManySMRsincludeinherentsafetyfeaturesthatallbuteliminatethepossibilityofseriousaccidents.Agreaterrelianceonpassivecoolingsystemsalsoenablessimplerreactordesigns,whichshouldlowercosts.Thebenefitsofpassivesafetysystemsmayalsoleadtosmalleroffsiteemergencyplanningzones,whichwouldmakeiteasiertositeplantsclosetopopulationorindustrialcentres.SMRsalsoofferanumberofothertechnicalbenefits.Ifusedtosupplyelectricitytothegrid,forexamplewhenreplacingcoalpowerplants,theywouldreducetheneedforreinforcementstothetransmissionnetwork,boostingtheireconomicviability.ThisfactorissettobecomeincreasinglyimportantasmoredistributedpowergenerationgrowswiththeincreasedpenetrationofsolarPVandwindpower.Aswithlargereactors,SMRscanhavedifferentapplicationsbeyondelectricity,includingtheproductionofheatandhydrogen,andthedesalinationofwater.Duetotheirsmallersize,SMRsmaybeparticularlyattractiveforcountrieswithsmallerandlessrobustelectricitygrids,althoughitremainsessentialtohaverobustregulatorybodiesandwastemanagementinplace.Constructiontimesareexpectedtobemuchfaster,thankstofactoryfabricationanduseofmodularconstructiontechniques.SeveraladvancedSMRdesignsunderdevelopmentalsoinvolveinnovativestrategiesforrecyclingspentnuclearfuel.Thesestrategiesaimtoreducethevolumeandradiotoxicityofhigh-levelwastethateventuallyhavetobemanagedindeepgeologicalrepositoriesandtheneedforuraniumminingforthefrontendofthenuclearfuelcycle.Thesedesignscouldenhancenuclearenergy’scontributiontolong-termsustainabilityobjectives.SMRscouldalsobeusedtomeettheneedforflexibilityinpowergenerationdemandedbyelectricitysystemswithhighsharesofwindandsolar.SMRsmaybewellsuitedforflexibleoperation,asisalreadythecaseforsometraditionallylarge-scalereactors,whichinhighrenewablescenarioscouldimproveprofitabilityascapturedelectricitypricesincreases.Inaddition,flexibilitycouldbeachievednotonlythroughload-followingofelectricityproduction,butalsowithflexibleco-generation,forinstanceviahydrogenproductionorthermalstorage.NuclearPowerandSecureEnergyTransitionsSmallmodularreactorsPage81IEA.Allrightsreserved.Thesmallersize,shorterprojectlead-timesandsitingattributesofSMRsmaymakethemanattractiveoptionforprivateinvestors.Thetotalsizeoftheinvestmentwouldbemoreaffordable,thoughnotnecessarilycheaperonaperMWbasis.Togetherwiththelowerprojectrisksassociatedwithshorterconstructionperiodsandfactoryconstruction,thiscouldencouragenewwaysoffinancingnewnuclearplants.SMRsalsooffertheadvantageofscalability,enablingutilitiestoaddcapacitytothegridinsmallerincrements.StatusofSMRresearch,developmentanddeploymentMomentumbehindSMRsispickingupTheurgencyofthenetzerochallenge,alongsideheightenedconcernsaboutthesecurityofelectricitysupply,isincreasingthereadinessofgovernmentstoconsiderandsupporttechnologicalsolutions.AsnotedinChapter2,halftheemissionsreductionsintheNZEcomefromtechnologies,likeSMRs,thatarenotyetavailablecommercially.UncertaintiesaboutwhenSMRtechnologywillbereadyforcommercial-scaledeploymentatscalemakeitdifficulttoprojecttheirfutureroleindecarbonisingtheenergysystem.IntheNZE,alltheworld’sfossilfuelplantswouldneedtobereplacedbylowemissionsalternatives,includingnuclearpower,nolaterthan2040.Becauseoftheuncertaintiesaboutthetechnology,wedonotexplicitlyprojectthecontributionofSMRsintotalnuclearpowerinthisscenario.However,wedoexpectSMRstoaccountforanincreasingpartofnewnuclearcapacityadditionsafter2030,ontheassumptionthatcontinuedprogressismadeindevelopinganddemonstratingthetechnology,andbringingdowncosts.Thereisextremelystrongpoliticalandinstitutionalsupport,withgovernmentgrantstoR&DaswellasdemonstrationprojectshavingincreasedbyanorderofmagnitudeoverthelasttwoyearsinsomecountriesandnowrunningintothebillionsofUSD.Thisismakingitpossibletoattractlargeprivateinvestments,bringingnewplayersandnewapproachestodevelopingprojectsintothenuclearindustry.Itisalsoseeninsomecountriesasanopportunitytoasserttechnologicalleadership.NuclearPowerandSecureEnergyTransitionsSmallmodularreactorsPage82IEA.Allrightsreserved.Smallmodularreactorsunderdevelopmentworldwidewithsignificantnear-termmilestonesDesignNetoutputpermoduleTypeDesignerCountryStatusARC-100100MWelectricSodiumfastreactorARCCleanEnergyCanadaDemonstrationprojectplannedinNewBrunswickCAREM25MWelectricPressurisedwaterreactorCNEAArgentinaUnderconstruction(Zárate)BWRX-300300MWelectricBoilingwaterreactorGE-HitachiUnitedStates/CanadaFirstcommercialdeploymentannouncedwithOntarioPowerGeneration(Darlington,Canada)andunderdiscussionwithTennesseeValleyAuthority(ClinchRiver,UnitedStates)eVinci5MWelectricandupto13MWthermalHeatpipeWestinghouseUnitedStates/CanadaPre-licensingapplicationsubmittedintheUnitedStatesin2021KairosPowerFHR140MWelectricMoltensaltreactorKairosPowerUnitedStatesUnderlicensingwithdemonstrationprojectplannedwithOakridgeNationalLaboratoryMicro-ModularReactorProject15MWthermalHightemperaturegas-cooledreactorGlobalFirstPower/UltraSafeNuclearCorporationCanadaUnderlicensingwithdemonstrationprojectplannedatCanadaNationalLaboratoriessite(ChalkRiver)StableSaltReactor–Wasteburner(SSR-W)300MWelectricMoltensaltreactorMoltexCanadaDemonstrationprojectplannedinNewBrunswickNuScaleSMR50MWelectric(×12)PressurisedwaterreactorNuScalePowerUnitedStatesUnderlicensingwithdemonstrationprojectwithIdahoNationalLaboratoriesandUtahAssociatedMunicipalPowerSystemsNatrium345MWelectricSodiumfastreactorTerraPower/GE-HitachiUnitedStatesDemonstrationprojectwithpreferredsiteidentifiedatKemmerer(Wyoming)NUWARD170MWelectric(x2)PressurisedwaterreactorEDF-ledconsortiumFranceDemonstrationprojectplannedfor2030RITM-20055MWelectricPressurisedwaterreactorOKBMAfrikantovRussiaFirstland-basedversionplannedfor2028inYakutiaNuclearPowerandSecureEnergyTransitionsSmallmodularreactorsPage83IEA.Allrightsreserved.DesignNetoutputpermoduleTypeDesignerCountryStatusUKSMR470MWelectricPressurisedwaterreactorRolls-RoyceledconsortiumUnitedKingdomUnderlicensingwithWylfaandTrawsfynyddidentifiedaspotentialsitesinthelicenceapplicationXe-10080MWelectric(x4)HighTemperaturegas-cooledreactorX-energyUnitedStatesDemonstrationprojectwithEnergyNorthwest(Washington)Note:Thislistincludesdesignsforwhichasitehasbeenidentified,aformallicenceapplicationmadeorthathavebeenselectedbygovernmentfornear-termdeployment.Source:OECD/NEA2022,Allrightsreserved.NumberofsmallmodularreactorprojectsintheworldbystatusofdevelopmentNotes:C=electricalcapacity.Source:IAEA2022,Allrightsreserved.IntheUnitedStates,somerecentmajorinitiativesinvolvingfederalgovernmentsupporthavemadeitpossibletoenvisageaconcretepushforSMRs,despiteageneralmarketcontextthatisunfavourabletonuclearpowerinsomestates.Severalsiteshavebeenselectedfordemonstrationprojectsinvolvingdifferentreactordesigns,thoughconstructionhasnotyetstartedasfinancingarrangementshaveyettobecompleted.Twoprojects–theKairosPowerFHRandNuScaleSMR–havesofarreachedthelicensingapplicationstage.ThefederalInfrastructureInvestmentandJobsActof2021embracesmanynuclearenergy-relatedprovisions,includingfundingfortheUSDepartmentofEnergy’sAdvancedReactorDemonstrationProgram,whichisintendedtospeedthedemonstrationofadvancedreactorsthroughcost-sharingpartnershipswithUSindustry.Underthisprogramme,theDepartmentofEnergyhasselectedtworeactordesignsthatareduetobefullyoperationalwithinthenextsevenyearsandawarded01020304050ConceptualdesignBasicanddetaileddesignsUnderconstructionInoperation<25MW25MW<C<100MW100MW<C<300MW>300MWNuclearPowerandSecureEnergyTransitionsSmallmodularreactorsPage84IEA.Allrightsreserved.USD160millionininitialfundingtotest,licenceandbuildprototypes:TerraPower’s345MWeNatriumplantandX-energy’s80MWepebble-bedunit.TheDepartmentofEnergywillinvestatotalofUSD3.2billionoversevenyears,subjecttotheavailabilityoffutureappropriations,withtheseindustrypartnersprovidingmatchingfunds.ThroughtheOfficeofCleanEnergyDemonstrations,ithasalreadyprovidedUSD2.5billioninfundingfortheAdvancedReactorDemonstrationProgram.Arangeofpotentialapplications:AfocusonSMRdevelopmentinCanadaCanadaisattheforefrontofthedevelopmentofSMRs.In2018,itdevelopedanSMRroadmapinconsultationwitheconomicandcivilsocietystakeholders,includingseveralprovinces,territoriesandpowerutilities,tomapouttheroleSMRscouldplayinCanada’senergymix,inparallelwiththeintroductionofregulationsthathavehelpedattractnewsmallreactorconcepts.Inaddition,anSMRActionPlanwasreleasedin2020,aswellasaprovincialmemorandumofunderstandingsignedbyAlberta,NewBrunswick,OntarioandSaskatchewan,toworkco-operativelytoadvancethedevelopmentanddeploymentofSMRsandtoencouragethefederalgovernmenttoprovidesupportforSMRdemonstrationprojects.Asaresult,severalsuchprojectsarecurrentlyunderconsiderationtargetingthedecarbonisationofhard-to-abatesectorsinindustry,theelectrificationofremoteminingoperationsandindustrialheatapplications.TheroadmapidentifiesthepotentialforSMRstomeetarangeofenergyneeds,alongwithopportunitiesfortheCanadiannuclearindustrytoexporttheseinnovativenuclearreactortechnologies.Italsoassessesthedifferentreactordesigncharacteristics,forinstancereactorsizeorheattemperature,requiredforspecificapplications:•On-gridpower(150MWeto300MWe):Replacingcoal-firedpowergenerationrepresentsakeynear-termopportunityforSMRs.AfirstofakindprojectatanexistingnuclearsiteatDarlingtoninOntariobasedontheBWRX300reactorbeingdevelopedbyGE-Hitachi–aUS-Japanesejointventure–tobecommissionedbythelate2020shasbeenannounced.SaskatchewanisalsoconsideringongridSMRs.TheprovincialpowercorporationinNewBrunswickisalsopursuingtheinstallationofSMRsatitsPointLepreaunuclearpowerstationsite.Generation-IVtechnology–asetofnuclearreactordesignscurrentlybeingresearchedbytheGeneration-IVInternationalForum–whichwouldenablespentfuelrecyclingfromtheearly2030sisbeingconsideredforthisproject.•Extractiveandheavyindustries(10MWeto80MWe):Thismarketsegmentconcernsoff-gridSMRsformining,oilsandsandotherheavyindustries,whereemissionsarehardtoabateduetotheneedforhightemperatureheat.FormanyNuclearPowerandSecureEnergyTransitionsSmallmodularreactorsPage85IEA.Allrightsreserved.years,extractiveindustriesinCanadahavemaintainedakeeninterestinhigh-temperatureSMRstoreplacedieselgenerators.•Remotecommunities(1MWeto10MWe):Remotecommunitiesthatcurrentlyrelyprimarilyonoffgriddieselgeneratorsfortheirelectricitysupplyhavebeenidentifiedasalongtermmarketopportunityformicro-modularreactors.GlobalFirstPower,ajointventurebetweenOntarioPowerGenerationandUSNCPower,hassubmittedanapplicationtoprepareasitetobuildamicro-modularreactorattheAtomicEnergyofCanadaLimited’sChalkRiverlaboratories.Thisprojectiscurrentlyundergoinganenvironmentalassessment.The2020SMRActionPlanlaysoutthestepsforthedeploymentofSMRsandenvisagesthefirstunitstocomeonlineinthelate2020s.Severalprojectshaveobtainedfederalandprovincialgovernmentfunding,includingtheIntegralMoltenSaltReactorbeingdevelopedbyTerrestrialEnergy,theMoltexEnergymoltensaltSMR,theCanadianARC-100sodium-cooledSMRandWestinghouse’seVincimicroreactor.Chinaisaleaderinadvancednucleartechnologydevelopment.Ademonstrationplantwithtwohigh-temperaturegas-cooledreactorpebble-bedmodule(HTR-PM)units–thefirstoftheirkind–atShidaoBaywasconnectedtothegridin2021.ChinaHuanengwastheleadorganisationintheconsortiumbuildingtheunits,togetherwithChinaNuclearEngineeringCorporation(asubsidiaryofChinaNationalNuclearCorporation)andTsinghuaUniversity'sInstituteofNuclearandNewEnergyTechnology,whichisthenuclearR&Dleaderinthecountry.Eachreactordrivesasingle210MWsteamturbine,usingheliumgasastheprimarycoolantandreachingtemperaturesashighas750°C.OtherHTR-PMprojects,atWan’aninFujianprovince,SanmeninZhejiangprovinceandBai'aninGunagdongprovince,havebeenannounced.Inaddition,theconstructionoftheACP100SMRdemonstrationprojectontheislandprovinceofHainanstartedin2021.Thismulti-purpose125MWepressurisedwaterreactorisdesignedforelectricityproduction,heating,steamproductionorseawaterdesalination.InRussia,AkademikLomonosovbroughttheworld’sfirstfloatingnuclearpowerplantintocommercialoperationinMay2020atPevekintheChkotkaregion,whichcomprisestwo35-MWeSMRs.Inaddition,RosatomOverseashasbeenlicensedtobuildthecountry’sfirstonshoreSMRpowerplant.LocatedinUst-KuygaintheRussianFarEast,itwillbeequippedwitha55MWeRITM-200SMRwiththeaimofproducingelectricityfrom2028.InJapan,thepriorityistorestartexistingnuclearpowerplantsandtheconstructionofSMRsisnotenvisagedintheshortterm.Nevertheless,theGreenGrowthStrategyoftheMinistryofEconomy,TradeandIndustryhassetgoalsforthenuclearpowersector.Theseincludepromotingthedevelopmentanddemonstrationoffast-reactorNuclearPowerandSecureEnergyTransitionsSmallmodularreactorsPage86IEA.Allrightsreserved.technologyforSMRstoproducehydrogenusinghightemperaturegasreactorsby2030.Thisistobeachievedthroughinternationalcooperation.IHICorporationandJGCHoldingsCorporationannouncedin2021thattheywouldinvestinUnitedStatesbasedNuScalePowerforoverseasdevelopments,withJapanBankforInternationalCooperationalsobecominginvolvedin2022.Others,suchasMitsubishiHeavyIndustriesandHitachiarealsoseencloselyindiscussionwiththeJapanesegovernmentforthedevelopmentofJapaneseSMRtechnologyandthesustainabilityandimprovementofthesupplychain.InKorea,therecentreversalinnuclearpolicybythenewgovernmentledbyPresidentYoonisexpectedtorevivethecountry’snuclearindustry.In2020,theKoreangovernmentandtheKingAbdullahCityforAtomicandRenewableEnergyinSaudiArabiaupdatedtheiragreementtocreateajointventurefortheconstructionofa100MWeSMRusingSMARTSMRtechnologybeingdevelopedbytheKoreaAtomicResearchInstitute.SeveralKoreancompaniesarealsopartneringwithinternationalSMRvendors.IntheUnitedKingdomthegovernmenthascommittedGBP210millioninfundingtodeveloptheRolls-RoyceSMR,matchedbyasimilaramountofprivateinvestment(byRolls-RoyceGroup,BNFResourcesUKLimitedandExelonGeneration).The2022NuclearEnergy(Financing)Actestablishesanewfinancingmodelfornuclearprojects,knownastheRegulatedAssetBase.Itaimstoattractawiderrangeofprivateinvestmentinbothnewlarge-scalereactorsandSMRsandreduceconstructioncosts,consumers’energybillsandrelianceonoverseasdevelopersforfinance.In2022,thegovernmentpublisheditsEnergySecurityStrategy,whichsetsambitionsforeightnewlargereactors,aswellassmallmodularreactors,toachievenucleargenerationcapacityof24GWeby2050,oraround25%offorecastelectricitydemandintheUnitedKingdom.InFrance,theFrance2030re-industrialisationplan,unveiledinOctober2021,includesEUR1billioninfundingfortheperiodto2030forinnovativedesignsincludingGeneration-IVconceptsandlightwaterSMRs,suchastheNUWARDSMRbeingdevelopedbyÉlectricitédeFrancewithmajorcontributionsfromTechnicAtome,NavalGroup,theFrenchAlternativeEnergiesandAtomicEnergyCommission,FramatomeandTractebel.OnegoalistobuildafirstSMRunitinFranceby2030.InterestinSMRsisalsogrowinginNorthern,CentralandEasternEurope,wherethepotentialmarketissignificant,asmanycountriesthereneedtoreplacealargeamountoffossilfuelpowerstationsandboostgeneratingcapacitytomeetgrowingelectricitydemand.InseveralcountriesliketheCzechRepublicandPoland,thereisinterestinSMRtechnology,especiallyformeetingindustrialheatanddistrictheatingneeds.SomeemergingmarketanddevelopingeconomiesarealsodevelopingroadmapsforSMRdeployment,basedonthegenericIAEAroadmap,includinginstitutionalcapacity-building.SMRsaremorefeasibleformanyofthesecountriesthanlarge-scaleplantsowingtogridconstraintandlowerinitialinvestmentcosts.NuclearPowerandSecureEnergyTransitionsSmallmodularreactorsPage87IEA.Allrightsreserved.SMRsaretargetingsomeofthemostdifficulttasksofenergytransitionsSMRscouldplayaroletocomplementvariablerenewablesandotherlowemissionsgeneratingtechnologiesinachievingnetzerogoalsbothinsupplyingelectricitytothegrid,forproducingheatandhydrogen,anddesalinatingwater.Someprojectstargetindustrialsectorswhereemissionsarehardtoabateandspecificapplicationswhereotherlowemissionstechnologiesarelesstechnicallyoreconomicallyviable.Theseapplicationsincludereplacingcoal-firedpowerstations,replacingfossilfuelsforproducingheatinindustryanddistrictheating,andvariousotherusessuchastheproductionofhydrogenandhydrogen-basedsyntheticfuels,desalinationandmerchantshipping.Replacementofcoalplantstosupplyon-gridpowerDecarbonisingthepowersectorrequiresthereplacementofaverylargenumberofcoal-firedpowerplantsandretrofittingmanyotherstocaptureCO2emissions.Incountriesopentonuclearpower,closeto8000coal-firedunitsareshutdownby2040intheNZEscenario,includingallcoalplantsinadvancedeconomiesby2030.ReusingsitesforlowemissionspowergenerationsuchasSMRswouldoffercertaintechnicalandcostadvantages,includingtheopportunitytomakeuseofexistingonsiteutilities,buildingsandotherfacilities,theconnectiontothetransmissionnetwork,theavailabilityofcoolingwaterandaskilledlocalworkforce.Therewouldalsobesubstantiallocaleconomicandsocialbenefitsfrommaintaininglocaleconomicactivityandskills.InEuropealone(excludingcountriesthatopposenuclearorarephasingitout),forexample,34GWofinstalledcoalcapacity,or32%ofthetotal,ismadeupofplantswith50MWto700MWofcapacity.Whilethesecoal-firedpowerstationscould,dependingonthecase,bereplacedbylargereactorsensuringtheequivalentproductionofelectricityintothegrid,SMRswithacapacityof200MWto300MWarewellplacedtoreplacesomeofthiscoal-firedcapacity,dependingontimingandotherconsiderations.Variousinitiativescanfacilitatethereplacementofcoal-firedplantswithSMRs,suchasthatofTerraPraxiswhichaimstopreparestandardisedandpre-licenseddesignssupportedbyautomatedprojectdevelopmentanddesigntools.Replacementoffossilfuelsinheavyindustry,off-gridmininganddistrictheatingManySMRdesignsoperateathightemperaturesandcouldcreatethefirstreallowemissionsalternativetofossil-fuelco-generationofpower,heatandhydrogenforindustrialcustomers.Industriesthatcouldmakecommercialuseofthistechnologyincludechemicals,steelmakingandammonia.SeveralsmallerSMRs,includingreactorsassmallas1MWe,areunderdevelopmentforoff-gridapplications,includingasanalternativetodieselgeneratorsinresourceextractionsites.NuclearPowerandSecureEnergyTransitionsSmallmodularreactorsPage88IEA.Allrightsreserved.Districtheatingisanotherpotentialapplication.Severalcountriesandregionsrelyheavilyondistrictheatingfromco-generationplantsbasedonfossilfuels.Switchingtobiomassmaybepossibleinsomecases,butconstraintsontheavailabilityorreachofsustainablebiomassresourceswilllimittheextenttowhichthiscouldoccurglobally.Iftheyreachcommercialmaturity,SMRsmaybeoneofthefewotherpracticalsolutionsthatcanfuellowemissionsdistrictheating.Hydrogenproduction,desalinationandmerchantshippingNuclearpowerplants,largeandsmall,arewellsuitedtomeetthegrowingdemandforlow-carbonhydrogenaswellashydrogen-basedsyntheticfuels.Hightemperaturereactorscanbecoupledwitheitherhigh-temperatureelectrolysisorthermochemicalcyclestoproducehydrogen.ThepossibilityoflocatingSMRsnearindustrialhubscouldboostthecompetitivenessofSMR-basedhydrogenasthiswouldreducehydrogentransportanddistributioncosts,whichcanbeveryhigh.SMRscouldalsobeusedtopowerdesalinationplantsoraimtoprovidelowemissionspropulsionformaritimemerchantshipping.SMRdesignsvaryinsizeandheatoutputaccordingtotheirpotentialuseTheSMRsbeingdevelopedatpresentvaryconsiderablyinsize,powerandheatoutput,technologyandfuelcycle,mainlyaccordingtothewaytheyareexpectedtobeused.Amongthemostmaturedesigns,almosthalfinvolveaheatoutputtemperatureoflessthan400⁰C,makingthemsuitableforpaperandmethanolproductionandoilrefining.Oneproducesheatinexcessof800⁰C,whichisrequiredforcoalgasificationandironandsteelproduction.NumberofleadingSMRsprojectsgloballybytemperaturerangeandtargeteduseNotes:T=temperaturein⁰C.Source:OECD/NEA2022,Allrightsreserved.036912200<T<400Paperandmethanolproduction,petroleumrefining400<T<600Chemicalsandammoniaproduction,heavyoildesulphurisation600<T<800Aluminiumproduction,steamreformingofmethane,hydrogenproductionT>800Coalgasification,desulphurisationblastfurnacesNuclearPowerandSecureEnergyTransitionsSmallmodularreactorsPage89IEA.Allrightsreserved.AlmosthalfofcurrentprojectsmakeuseofGenerationIIItechnology,whichaimstoenhancesafetybyincorporatingdesignchangesthatlowertheriskofasevereaccidentand,shouldasevereaccidentoccur,useappropriatemitigationsystemstolimittheimpactsonthepopulationandenvironment.Thesemainlytaketheformoflightwater-cooleddesigns,basedonyearsofoperatingexperience.Someconceptsunderconstructionorataveryadvancedstageinthelicensingprocessarelikelytocomeontothemarketby2030.ThedevelopmentofliquidmetalcooledSMRs,moltensaltcooledandgascooledSMRdesigns–referredtoasGeneration-IVSMRs–isgenerallylessadvanced.However,thesedesignsmayproveattractiveastheyhavethepotentialtoreachhighertemperaturestooptimiseco-generationandnon-electricapplications,aswellasbeingcompatiblewiththerecyclingofusednuclearfuel.ItmaytakealongertimeforGeneration-IVmodelstobeprovenindustrially,leadingtothecommercialdeploymentofaseriesofreactors.Oneofthebiggestchallenges,otherthanthetechnologicaldemonstrationstillnecessaryinseveralcases,isestablishingasustainablefuelcycleforthereactor.Nevertheless,politicalleadershipandsignificantfinancialsupportshouldacceleratetechnologicaladvancesandresultinabreakthroughinthecomingyears.ChallengesfacingSMRdeploymentCost-competitivenessisanopenquestion,andSMRcostsneedtocomedownsubstantiallyThecost-competitivenessofSMRsrelativetoothertypesoflowemissionsdispatchablepowerandheatgenerationwillbecrucialtothewidespreaddeploymentofthetechnology.HowcostsevolveishighlyuncertainandtherangeofcurrentSMRcostestimatesiswide.Mostofthenumbersthatarequotedatpresentareestimatesproducedbyprojectdevelopers;theyhaveyettobetemperedbymuchinthewayofreal-lifeexperienceandsoshouldbetreatedwithgreatcaution.TheseestimatestendtobeintheUSD45-110/MWhforprojectsinsomeadvancedeconomies,dependingonthedegreeoftechnologymaturityanddiscountratebeingconsidered(6%or9%),whilesomedevelopersaimforarangeofUSD50-60/MWhfornthofakindunits.Thecostsofcertifyingnewdesignsandthecostoffactoriesyettobebuiltaresubjecttohighuncertainties.Historically,economiesofscalehavedrivenanincreaseinthesizeofreactors,withcurrentconventionallarge-scaledesignsinvolvingmorethan1GWofelectricaloutputcapacity.InthecaseofSMRs,aseries-constructionapproachisexpectedtobeusedtobringdowncosts.Severaltechnicalfeaturessuchasdesignsimplification,standardisationandmodularisation,aswellasfactoryfabrication,areexpectedtounderpinthisnewapproach.Thebenefitsofseriesconstructionhavebeenproveninotherindustries,includingtheshipbuildingandaircraftindustries,andSMRdevelopersarelookingtomakeuseofNuclearPowerandSecureEnergyTransitionsSmallmodularreactorsPage90IEA.Allrightsreserved.thelessonslearnedfromthesesectors.Observationsofmodularisationinsomeindustries,includingthepowersector,indicatelead-timereductionsof40%,and20%intermsofcostsavings.ForearlySMRunits,massproductionmayresultintheamortisationofone-timecosts,suchasresearch,development,anddesigncertificationcosts.ThecompetitivenessofSMRsshouldalsobenefitfromseveralotherfeaturesthatmakefinancingeasier,notablytheirsmallerconstructioncostandscalabilitycomparedwithlargereactorsandoveralleasierprojectmanageability.Investmentinthedevelopmentofindustrialcapacitiesisthereforeacriticalsuccessfactorforthelong-termeconomicperformanceofSMRs.AsuccessfulpathwaytocompetitivenessforSMRsalsoimpliesthatonlypartofthe70currentdesignsunderdevelopmentreachescommercialmaturitysoastosecureasignificantnumberofunitsperdesignasneededbyeconomiesofmassproduction.ThepotentialcompetitivenessofSMRsisbestmeasuredincomparisonwithalternativetechnologicaloptionsforthespecificapplicationstargetedbySMRs.Forinstance,Canada’sSMRroadmapconcludesthatSMRscouldbeaparticularlyattractivesolutionforremoteregionswherethealternativewouldbedieselpoweredgenerators.Mostconceptsorprojectsareatfartooearlyastagetoconsiderdevelopingdetailedcapitalcostestimates,makingitdifficulttodeterminepreciselywhichdesignsmightprovetobethemostcompetitiveforspecificapplications.Moreover,fornuclearenergy,theeconomicsareonlyonedevelopmentfactor.Thismeansthatotherfactors,suchaspublicacceptancerelatedtosafetyfeaturesorspentfuelmanagement,willbecriticaltothedeploymentofaparticulardesign.SMRswillonlybecomeeconomicallyviableoncedemonstrationunitshavebeensuccessfullybuiltandoperated,andwherewell-definedandpredictablelicensingprocessesareinplace.Someproponentsexpectcommercialcompetitivenesstobeconsideredonceafewunitsaredeployed.PolicyandregulatorysupportisneededtostimulateinvestmentThesuccessfullong-termdeploymentofSMRshingescriticallyonstrongsupportfrompolicymakersandregulatorsforinnovationandcommercialisationtoleverageprivatesectorinvestmentinR&Danddevelopingsupplychains.ThissupportneedstogobeyondfundingofR&Danddemonstrationprojects.AdaptingandstreamlininglicensingandregulatoryframeworkstotakeaccountoftheuniquesafetyfeaturesofSMRsisanimportantelement:inmostcountrieswithnuclearenergy,existingregulationshavebeendevelopedforlargereactors.EnhancingregulatoryprocessescouldgreatlyimprovethefuturecompetitivenessofSMRs.Internationalharmonisationoflicensingapproaches,assupportedbytheIAEA,couldbeparticularlyimportantinfacilitatingtheemergenceofaglobalmarket,whichcouldtakefulladvantageoftheeconomiesofscaleoflarge-scaleproductionofindividualNuclearPowerandSecureEnergyTransitionsSmallmodularreactorsPage91IEA.Allrightsreserved.reactors.However,licensingwouldstillneedtocomplywithnationalandlocalregulatoryrequirementssuchastheenvironmentalimpactassessmentorpublicconsultationprocesses.Policymakersalsoneedtolookatwaysofmitigatingrisksfortechnologyandprojectdevelopers.Aswithlarge-scalenuclearprojects,thecostofcapital,whichreflectsriskallocationandmitigationdecisions,isexpectedtoremainakeydriverofthecompetitivenessofSMRs.BothpublicandprivatefinancingwillberequiredasSMRsmovefromthedemonstrationstagetocommercialdeployment.Securingprivatefinancingwillbeakeyconditionforsuccessbutwillrequirearobustandtechnology-neutralpolicyframework,includingintheareaoftaxonomiesandenvironmental,socialandgovernancethatwillhaveagrowingincidenceonfinancialflows.Someemergingmarketanddevelopingeconomieswillrequiretheengagementofmultinationalfinancialinstitutions.Regulatorswillalsoneedtoconsiderthesafetyandsecurityofnuclearfuelsupply,whichdiffersconsiderablyfromthatforlargeconventionalreactors.SomeSMRdesignsandotheradvancedreactorsindevelopmentrelyoninnovativefuels,suchasHighAssayLowEnrichedUranium,whichhavefewsuppliersorarenotyetcommerciallyavailable.Existingregulationswillneedtobeadaptedtocoverthespecificcharacteristicsofthesupplychainsforthesetypesoffuels.Regulatorsandpolicymakersalsoneedtokeepinmindthepotentialimplicationsofaverylargenumberofsmallreactorsbeingbuiltaroundtheworldontherisksofproliferation.TheopportunitiesforSMRsdependonthespeedofitsowndevelopment,andthebroaderpaceoftransitionsTheprospectsforthedeploymentofSMRsandthedegreetowhichtheycouldcontributetoachievingnetzerogoalsremainuncertain.MostSMRconceptshaveyettobedemonstratedandnewnuclearplantshavetypicallyhadlonglead-times.Theremaybesignificantriskofconstructiondelaysandcost-overrunsfordemonstrationunitsandfirst-of-a-kindcommercialSMRs.Indeed,theSMRsthathavealreadybeencommissionedgenerallytookalongtimetobuild:forexample,12yearsinthecaseoftheRussianfloatingSMRandnineyearsforChina’sHTR-PMdemonstrationplant.Thesedelayscanbeexplainedbythetechnologicalandindustrialchallengesthathadtobeovercomeforthesetwoconcepts.Yet,unlikeinWesterncountries,thesereactorswerebuiltincountrieswithanactivenuclearconstructionindustry.Basedonrecentexperience,SMRsmaybereadytostarttoplayaroleindecarbonisingelectricitysupplyfromthemid-2030s.Withinthenexttenyears,onlyafewSMRconceptsarelikelytoapproachcommercialmaturity.Thesecanbeclassifiedintotwocategories:•Designsresultingfromproventechnologiesandbenefittingfromanexistingnuclearsitewithrequisiteinfrastructure.ThesecharacteristicswillhelptoNuclearPowerandSecureEnergyTransitionsSmallmodularreactorsPage92IEA.Allrightsreserved.reducetherisksandcostslinkedtolicensing,suchasmeetingenvironmentalrules.Forexample,thiscouldbethecasefortheBWRX-300modelatDarlington,Canada.•Moreinnovativedesigns,providedthattheyaresupportedbyasubstantialgovernmentprogramme.ThisisthecaseintheUnitedStatesforthetwoadvanceddesignsbeingdevelopedbyTerraPowerandX-energy,whichhaveobtainedsignificantfundingfromtheUSDepartmentofEnergy.Suchfundingcanhelpmeetthelargecostsneededtopassthetechnologydevelopmentandlicensingstages,whichrepresentasubstantialpartofthetotalupfrontcostofthefirstunit.Inturn,thiswouldhelptoattractprivatefinanceandlimittheriskforend-users.Howthesedevelopmentsultimatelyintersectwiththejourneytonetzeroemissionsdependsalsoonthespeedofthesebroadertransitions.Asnotedintheopeningchaptertothisreport,theworldisnotyetontracktoreachnetzeroemissionsby2050.Ascenariobasedontheclimatepledgesactuallymadebygovernmentsfallsshortofthisgoal,evenifallofthesepledgesareimplementedontimeandinfull.Ascenariobasedonthepoliciesthatareactuallyinplacewouldmovetheworldevenfurtherawayfroma1.5⁰Cstabilisationinrisingglobaltemperatures.TheopportunitiesandrolesopentoSMRswouldvarywidelyacrossthesedifferentscenarios.IntheworldoftheNZE,whichdepictsanextremelyrapidtransition,thenumberofSMRsbuiltinthenextdecadewillclearlyfallfarshortofthecapacitythatislostbytheacceleratedclosureofcoal-firedpowerplantsintheNZE.Thissituationisespeciallytrueforadvancedeconomieswherethepowergenerationsectorreachescarbonneutralityin2035inthisscenario(emergingmarketanddevelopingeconomiesreachthatgoaltenyearslater).Yetthisdoesnotmeanthatgovernmentsinadvancedeconomiesshoulddialbacktheirsupport.IntheNZE,nuclearinvestmentneedsintheG7countriespeakinthe2040s.Thereis,therefore,asignificantopportunityforSMRdesignstoreachtechnicalandcommercialmaturityaheadofthatdecade,whennewcapacityismostneeded.Thisistruebothforsmallevolutionaryreactorsthatmaybeabletoachieveeconomiccompetitivenesscomparedwithotherdispatchablelowemissionssources,butalsofortheadvancedreactormodelsthatmaybeabletoachieveasufficientbreak-evenpointwhilebenefitingfromnewattractivedesignfeaturesrelatedtointrinsicimprovementsintermsofsafetyorwasteproduction.Inaworldmovingrapidlytowardsnetzeroemissions,asintheNZE,therearetwoimportantwindowsofopportunityforSMRs:•Duringtheperiodto2040,SMRscancontributetothedecarbonisationofthepowersector.However,thiswillcruciallydependoninvestmentdecisionsmadenowtobegindeploymentatscaleduringthe2030s.Mostearlydeploymentsareexpectedtobeatexistingpowerplantsites.NuclearPowerandSecureEnergyTransitionsSmallmodularreactorsPage93IEA.Allrightsreserved.•Lookingbeyond2040,ifinvestmentdecisionsaremadethisdecade,thentheperiodbeyond2040wouldopenupopportunitiesforlargescaledeploymentofSMRs,includingthecurrentlyless-maturereactordesignsandreactorsassociatedwithspentnuclearfuelrecyclingstrategies.Thesecouldbemorewidelydeployedinthe2040stosupplylowemissionselectricity,heatandhydrogen.ThispublicationreﬂectstheviewsoftheIEASecretariatbutdoesnotnecessarilyreﬂectthoseofindividualIEAmembercountries.TheIEAmakesnorepresentationorwarranty,expressorimplied,inrespectofthepublication’scontents(includingitscompletenessoraccuracy)andshallnotberesponsibleforanyuseof,orrelianceon,thepublication.Unlessotherwiseindicated,allmaterialpresentedinfiguresandtablesisderivedfromIEAdataandanalysis.Thispublicationandanymapincludedhereinarewithoutprejudicetothestatusoforsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundariesandtothenameofanyterritory,cityorarea.IEA.Allrightsreserved.IEAPublicationsInternationalEnergyAgencyWebsite:www.iea.orgContactinformation:www.iea.org/about/contactTypesetinFrancebyIEA-June2022Coverdesign:IEAPhotocredits:©GettyImages

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