A nuclear energy future? For now, it remains unclear
Energy security and climate change have become dual drivers renewing interest in electricity produced from nuclear energy. The Credit Suisse Nuclear Energy Report 2022 considers the efficiency and environmental merits and challenges of the technology. It also presents the controversy and political discord, and demonstrates that, in defining the future for nuclear, questions remain around whether it is possible to attract the financing required and overcome society's safety concerns for people and planet.
Electricity produced using nuclear energy has been offered as stableI and low in greenhouse gas (GHG) emissionsII. And although emissions are not as low as solar and wind energy, unlike these renewables which require battery support, nuclear offers a source of energy that is available 24/7III. Over the past 50 years, the use of nuclear power has avoided emissions by the equivalent of two years' worth of global energy-related emissionsIV. Nuclear energy accounts for half of Europe's low-carbon electricity productionV, and data from the International Energy AgencyVI shows that nuclear power is currently the second-largest source of global low-carbon electricity generated.
The public debate is fierce and continues
The word 'nuclear' has strong negative connotations attributed to nuclear weapons and nuclear power plant disasters. Innovation may offer solutions. Advanced reactor designs have been proposed to increase safety and address some of the other challenges facing nuclear technology, i.e., to reduce construction and maintenance time and reduce waste and nuclear proliferation.
“Nuclear energy is also one of the few industries that continuously retrofit any deficiencies that are found in any unit, anywhere in the world. These lessons learned have been shared among all the operators worldwide.”
Dr. Sama Bilbao y Leon, Director General of the World Nuclear Association.
With nuclear energy accounting for 10% of the global electricity supply and one-quarterVII of the EU's total electricity production, a further pertinent concern is the need to avoid nuclear fuel supply chain issues and geopolitical dependencies for energy.
The environmental impacts
Harnessing nuclear fission allows nuclear reactors to generate large amounts of energy from relatively little fuel without releasing CO2 in the process. However, as a transitional solution, the typically decade-long construction of nuclear power plants means we continue to burn fossil fuels to generate electricity during this time.
But owing to the long-lived nature of the nuclear waste produced, it is storage that presents challenges. Nobody yet knows how best to safely store nuclear waste for several hundred thousand years. The European Commission acknowledges that the situation with waste is less conclusive than that of emissions, but their stance is that nuclear energy mainly produces low-level radioactive waste, for which there are disposal facilities that have been in operation for decades, while high-level radioactive waste accounts for just 1% of total nuclear waste.VIII
Finance and follow-through
Nuclear energy built to a high, safe standard comes at a high cost and with long lead times. So, with increasing pressure to find affordable, dependable, and clean energy, should there be a reconsideration of the role of nuclear energy? When it comes to climate change, the European Union (EU) has intensely debated this topic, with the rest of the world looking on.
In October 2021, 10 EU countries signed a statement that is strongly in support of the use of nuclear energy. But division remains the fuel of delay when it comes to deciding a future for nuclear. During COP 26, five European countries released a joint statement in which they argue that nuclear power is incompatible with the EU Taxonomy's 'do no significant harm' principle. Furthermore, in early 2022, Austria and Germany even raised the possibility of legal action if the European Commission were to proceed with its plans regarding nuclear power.
"As nations are now starting to pursue individual greenhouse gas commitments, their energy strategies are determined more and more unilaterally and based on political decisions."
Dr. Nina Skorupska, Chief Executive of the Renewable Energy Association.
Could we see a nuclear renaissance?
The EU Taxonomy Regulation aims to improve sustainability-related transparency, avoid greenwashing and redirect capital flows toward activities in line with the EU's climate and environmental goals. In February 2022, the European Commission recognized the 'transitional' role of certain gas and nuclear activities in its 'green' rulebook, and at a vote in July 2022, the European Parliament did not object to the Commission's proposal. Nevertheless, an objection by the Environment and Economic Affairs committees in June 2022, though overturned, provided a telling insight into the political divide among legislators. The inclusion of nuclear activities is a recognition of their high performing, low carbon metrics, and could provide a tailwind for the industry, despite historical wavering on the environmental impacts of the energy source.
Is there are place for nuclear in the energy mix?
As the world becomes increasingly electrified, the demand for electricity is set to increase dramatically.
“I think a variety of contributions will be made to baseload power, it will be some renewables during the day, some storage, some nuclear, some natural gas. And we’ll see a big mix, and that mix will continue for some time.”
Lord Browne of Madingley. Credit Suisse Energy in Transition Conference 2022
Can society's discomfort with nuclear energy be overcome? Will the space where 'transition solutions' and 'energy security' meet be an opportunity for financing innovations? And by that means, could the future go from unclear to nuclear?
I In October 2021, ten EU countries signed a statement that refers to nuclear energy as stable.
II IEA https://www.iea.org/reports/nuclear-power-in-a-clean-energy-system May 2019
III Refueling and performing scheduled and unplanned maintenance on a nuclear reactor can require lengthy shutdown periods during which the reactor does not produce electricity.
IV IEA https://www.iea.org/reports/nuclear-power-in-a-clean-energy-system May 2019
VI 'Nuclear Power in a Clean Energy System,' IEA, May 2019
VII '25% of EU electricity production from nuclear sources,' Eurostat, January 2020