World Energy Outlook

The International Energy Agency (IEA) − a self-described autonomous organisation with 29 member countries − has released its latest World Energy Outlook (WEO) report.¹

In the central scenario of WEO, world primary energy demand is 37% higher in 2040 compared to 2013, and energy supply is divided into four almost equal parts: low-carbon sources (nuclear and renewables), oil, natural gas and coal. Electricity is projected to be the fastest-growing final form of energy − WEO states that 7,200 gigawatts (GW) of power capacity needs to be built by 2040. Global investment in the power sector amounts to US$21 trillion (€16.8t), with over 40% in transmission and distribution networks. CO2 emissions from the power sector rise from 13.2 gigatonnes (Gt) in 2012 to 15.4 Gt in 2040, maintaining a share of around 40% of global emissions over the period. Fossil fuels continue to dominate the power sector, but their share of generation declines from 68% in 2012 to 55% in 2040.

Nuclear growth?

WEO notes that nuclear power accounts for 11% of global electricity generation, down from a peak of almost 18% in 1996. There is "no nuclear renaissance in sight" according to the IEA. In the WEO 'Low Nuclear Case', global nuclear capacity drops by 7% between 2013 and 2040. In the 'New Policies Scenario', nuclear capacity rises by 60% to 624 GW. This is the net result of 380 GW of capacity additions and 148 GW of retirements. Just four countries account for most of the projected nuclear growth in the 'New Policies Scenario': China (132 GW increase), India (33 GW), South Korea (28 GW) and Russia (19 GW). Generation increases by 16% in the US, rebounds in Japan (although not to the levels prior to the accident at Fukushima Daiichi) and falls by 10% in the European Union. The number of countries operating power reactors increases from 31 in 2013 to 36 in 2040. Needless to say, the projected growth in the New Policies Scenario is speculative and unlikely. Historically, low projections from bodies such as the IEA and the IAEA tend to be more accurate than high projections.²

WEO states that nuclear growth will be "concentrated in markets where electricity is supplied at regulated prices, utilities have state backing or governments act to facilitate private investment." Conversely, "nuclear power faces major challenges in competitive markets where there are significant market and regulatory risks, and public acceptance remains a critical issue worldwide."³ More than 80% of current nuclear capacity is in OECD countries but this falls to 52% in 2040 in the New Policies Scenario. Of the 76 GW presently under construction, more than three-quarters is in non-OECD countries.

A wave of reactor retirements

WEO states: "A wave of retirements of ageing nuclear reactors is approaching: almost 200 of the 434 reactors operating at the end of 2013 are retired in the period to 2040, with the vast majority in the European Union, the United States, Russia and Japan." WEO estimates the cost of decommissioning reactors to be more than US$100 billion (€80b) up to 2040. The report notes that "considerable uncertainties remain about these costs, reflecting the relatively limited experience to date in dismantling and decontaminating reactors and restoring sites for other uses." IEA chief economist Fatih Birol said: "Decommissioning of those power plants is a major challenge for all of us – for the countries that are pursuing nuclear power policies and for those who want to phase out their nuclear power plants. Worldwide, we do not have much experience and I am afraid we are not well-prepared in terms of policies and funds which are devoted to decommissioning. A major concern for all of us is how we are going to deal with this massive surge in retirements in nuclear power plants."⁴

Paul Dorfman of the Energy Institute at University College London noted that the US$100bn figure is only for decommissioning and does not include the costs of permanent waste disposal. "The UK's own decommissioning and waste disposal costs are £85bn alone, so that gives you an idea of the astronomical costs associated with nuclear," he said.⁵

Nuclear safety, waste and weapons

WEO notes: "Public concerns about nuclear power must be heard and addressed. Recent experience has shown how public views on nuclear power can quickly shift and play a determining role in its future in some markets. Safety is the dominant concern, particularly in relation to operating reactors, managing radioactive waste and preventing the proliferation of nuclear weapons. Confidence in the competence and independence of regulatory oversight is essential ..." In the WEO high-growth New Policies Scenario, the cumulative amount of spent nuclear fuel that has been generated more than doubles, reaching 705,000 tonnes in 2040. The report notes that no country has yet established permanent facilities for the disposal of high-level radioactive waste from commercial reactors.

Nuclear power and climate change

WEO states that nuclear power "has avoided the release of an estimated 56 gigatonnes of CO2 since 1971, or close to two years of emissions at current rates." The claim is meaningless without a point of reference. Presumably the calculation is based on the arbitrary assumption that all nuclear power generation displaces generation from coal-fired power plants.

Renewable electricity generation

The share of renewables in total power generation rises from 21% in 2012 to 33% in 2040 in the New Policies Scenario, and renewables account for nearly half of new capacity. Renewable electricity generation nearly triples between 2012 and 2040, overtaking gas as the second-largest source of generation in the next couple of years and surpassing coal after 2035. China sees the largest increase in generation from renewables, more than the gains in the EU, US and Japan combined. Wind power accounts for the largest share of growth in renewables-based generation (34%), followed by hydropower (30%) and solar (18%). Biofuels use more than triples. Advanced biofuels, which help address sustainability concerns about conventional biofuels, gain market share after 2020, making up almost 20% of biofuels supply in 2040. Global subsidies for renewables amounted to US$121 billion (€97b) in 2013 and are anticipated to increase to nearly US$230 billion (€184b) in 2030 in the New Policies Scenario, before falling to $205 billion (€164b) in 2040. In 2013, almost 70% of subsidies to renewables for power were provided in just five countries: Germany, the US, Italy, Spain and China.

Fossil-fuel subsidies totalled $550 billion (€439b) in 2013 – 4.5 times greater than subsidies for renewables – and are holding back investment in efficiency and renewables. For example, in the Middle East, nearly 2 mb/d of crude oil and oil products are used to generate electricity when, in the absence of subsidies, renewables would be competitive with oil-fired power plants. Energy efficiency slows energy demand growth. Without the cumulative impact of energy efficiency measures, oil demand in 2040 would be 22% higher, gas demand 17% higher and coal demand 15% higher.

References:

1. www.worldenergyoutlook.org
2. See for example tables 33 and 34, p.56, www-pub.iaea.org/mtcd/publications/pdf/pub1304_web.pdf
3. www.iea.org/newsroomandevents/pressreleases/2014/november/signs-of-stres...
4. www.world-nuclear-news.org/NP-Nuclear-industry-shares-IEA-concern-121114...
5. www.ft.com/intl/cms/s/0/925030a2-68fb-11e4-9eeb-00144feabdc0.html

The International Energy Agency (IEA) released its 'World Energy Outlook 2013' report on November 12.[1,2,3]

The IEA expects global demand for electricity to grow over 70% by 2035, with over half of this growth in China and India. The report notes that coal "remains the backbone of generation globally, particularly outside the OECD, but its share of the mix is eroded from two-fifths to one-third" by 2035.

Renewables are set "become the world's second-largest source of power generation by 2015 and close in on coal as the primary source by 2035," with renewables' share of electricity generation to grow from 20% in 2010 to 31% by 2035. China is expected to see the biggest absolute increase in generation from renewables, more than the gains in the European Union, United States and Japan combined.

The IEA predicts that global nuclear generating capacity will reach 580 gigawatts (GWe) in 2035, a 56% increase compared to current capacity of 372 GWe. The 580 GWe figure is 10% less than the IEA forecast a year ago. China, South Korea, India, and Russia are expected to lead the growth in nuclear capacity.

As reported in the September 27 issue of the Nuclear Monitor [4], the World Nuclear Association's latest projections for nuclear growth are "significantly lower" than the projections in the Association's 2011 report, and the IAEA has also scaled back its nuclear growth projections.

The nuclear growth projections of these three organisations − the IEA, WNA and IAEA − are still implausibly high even after downward revisions. For example it is difficult to envisage anything other than marginal growth in South Korea in the wake of the corruption scandals engulfing the industry there; growth in China is certain but sustained annual growth in the range of 6 GW is unlikely; Russia has recently sharply reduced its nuclear growth projections; and India has a track record of making absurd nuclear growth projections and failing spectacularly to meet them.

Dr Ian Fairlie has recently compiled a list of over 40 examples of governments, banks, utilities and energy companies around the world withdrawing from nuclear projects since 2011.[5]

How to close the US nuclear industry: Do nothing

In the US, it is difficult to see current capacity of 99 GW − over one-quarter of the world total − being maintained let alone expanded. All the more so since a large majority of the US reactor fleet (and the global reactor fleet) will be well and truly into old age by 2035.

Peter Bradford, a former member of the US Nuclear Regulatory Commission, explained the problem in a Bulletin of the Atomic Scientists article earlier this year, titled 'How to close the US nuclear industry: Do nothing'.[6]

Bradford writes: "The United States is on course to all but exit the commercial nuclear power industry even if the country awakens to the dangers of climate change and adopts measures to favor low-carbon energy sources. Nuclear power had been in economic decline for more than three decades when the Bush administration launched a program that aimed to spark a nuclear power renaissance through subsidies and a reformed reactor licensing process. But Wall Street was already leery of the historically high costs of nuclear power. An abundance of natural gas, lower energy demand induced by the 2008 recession, increased energy-efficiency measures, nuclear's rising cost estimates, and the accident at the Fukushima Daiichi Nuclear Power Station further diminished prospects for private investment in new US nuclear plants. Without additional and significant governmental preferences for new nuclear construction, market forces will all but phase out the US nuclear fleet by midcentury."

In the latest setback for the US nuclear industry, Mitsubishi has announced it will slow down work to obtain design certification for Advanced Pressurized Water Reactors (APWR), and in response Luminant has suspended its application to build two APWRs at the Comanche Peak plant in Texas.[7]

In the past year, US utilities have closed or announced plans to close five reactors in addition to cancelled plans for new reactors and uprates. Those five are Vermont Yankee, Vermont; San Onofre, California; Kewaunee, Wisconsin; Crystal River, Florida; and Oyster Creek, New Jersey.[8]

On November 7, Forbes published a list of six nuclear plants in the US that could be the next to shut down − in addition to plants that are offline and may never reopen (e.g. Fort Calhoun in Nebraska) and plants already scheduled for closure (e.g. Exelon's Oyster Creek plant in New Jersey). The six plants that could be the next to shut down are: Indian Point, New York; Ginna, New York; James A. Fitzpatrick, New York; Three Mile Island, Pennsylvania; and Davis Besse, Ohio.[8]

References:
[1] International Energy Agency, 'World Energy Outlook 2013', www.worldenergyoutlook.org/
[2] WNN, 12 Nov 2013, 'IEA cuts nuclear power growth forecast', www.world-nuclear-news.org/EE-IEA_cuts_nuclear_power_growth_forecast-121...
[3] Karel Beckman, 14 Nov 2013, 'Exclusive interview IEA-Director Maria van der Hoeven', www.energypost.eu/interview-iea-director-maria-van-der-hoeven-rule-new-r...
[4] 'World Nuclear Association scales back projections', Nuclear Monitor #768, 27 Sept 2013, www.wiseinternational.org/node/4029
[5] Ian Fairlie, 11 Nov 2013, 'Nuclear Pull-outs and Withdrawals Since 2011', www.ianfairlie.org/news/nuclear-pull-outs-and-withdrawals-since-2011/
[6] Peter A. Bradford, 'How to close the US nuclear industry: Do nothing', Bulletin of the Atomic Scientists, March/April 2013, vol.69 no.2, pp12-21, http://bos.sagepub.com/content/69/2/12.abstract
[7] WNN, 12 Nov 2013, 'Mitsubishi delays certification of APWR', www.world-nuclear-news.org/NN-Mitsubishi-delays-certification-of-APWR-12...
[8] 7 Nov 2013, '6 Nuclear Plants That Could Be Next To Shut Down', www.forbes.com/sites/jeffmcmahon/2013/11/07/6-nuclear-plants-that-may-be...

The World Nuclear Industry Status Report 2013 (WNISR) was released on July 11. The report looks at nuclear reactor units in operation and under construction, with global statistics and detailed country-by-country information. The report also contains useful material on topics such as potential newcomer countries, the credit-rating performance of some of the major nuclear utilities, the aftermath of the Fukushima disaster, and development patterns of renewable energies compared to nuclear power.

Some key facts from the report are listed here.

The number of operating reactors has fallen from the 2002 peak of 444 to the current 427 reactors.

Installed nuclear capacity peaked in 2010 at 375 gigawatts (GWe) before declining to the current level of 364 GWe.

Annual nuclear electricity generation peaked in 2006 at 2,660 terrawatt-hours (TWh), falling to 2,346 TWh in 2012 (down 7% compared to 2011, down 12% from 2006). About three-quarters of this decline is due to the situation in Japan, but 16 other countries, including the top five nuclear generators, also decreased their nuclear generation.

The nuclear share of the world's power generation declined steadily from a historic peak of 17% in 1993 to about 10 percent in 2012. Nuclear power's share of global commercial primary energy production fell to 4.5% in 2012, a level last seen in 1984.

The average age of the world's nuclear fleet continues to increase and in mid-2013 stands at 28 years. Over 190 reactors (45% of the total) have operated for 30 years, of which 44 have run for 40 years or more.

Fourteen countries currently are currently building nuclear power plants, one more than a year ago as the United Arab Emirates (UAE) started construction at Barrakah. The UAE is the first new country in 27 years to have started building a commercial nuclear power plant.

As of July 2013, 66 reactors are under construction (seven more than in July 2012) with a total capacity of 63 GW. However:

• Nine reactors have been listed as "under construction" for more than 20 years and four additional reactors have been listed for 10 years or more.
• Forty-five projects do not have an official planned start-up date on the IAEA's database.
• At least 23 have encountered construction delays, most of them multi-year. For the remaining 43 reactor units, either construction began within the past five years or they have not yet reached projected start-up dates, making it difficult or impossible to assess whether they are on schedule or not.
• Two-thirds (44) of the units under construction are located in three countries: China, India and Russia.
• The average construction time of the 34 units that started up in the world between 2003 and July 2013 was 9.4 years.

Only three reactors started up in 2012, while six were shut down. In 2013, up to 1 July, only one reactor started up, while four shutdown decisions − all in the U.S. − were taken. Three of those four units faced costly repairs, but one (Kewaunee, Wisconsin) was running well and had received a license renewal just two years ago to operate up to a total of 60 years; it simply became uneconomic to run.

Engagement in nuclear programs has been delayed by most of the potential newcomer countries, including Bangladesh, Belarus, Jordan, Lithuania, Poland, Saudi Arabia and Vietnam.

In 2012, construction began on six reactors and on three so far in 2013, including on two units in the US. Those two units have been offered over US$8 billion in federal loan guarantees and other subsidies whose total rivals their construction costs, and special laws have transferred financial risks to the taxpayers and customers.

Additional costs arising from upgrading and backfitting measures following the lessons of the Fukushima crisis are only beginning to surface. They are likely to have substantial impact on investment as well as operational costs.

Nine out of 14 major utilities assessed in the WNSIR saw their earnings decline over the past five years while 13 constantly increased their debt level.

Over the past five years, 10 out of 15 assessed nuclear utilities were downgraded by credit rating agency Standard and Poor's, four remained stable, while only one was upgraded.

Renewable energy
In spite of a slight decrease in global investment in 2012, partly reflecting rapidly falling equipment prices, renewable energy development continues its rapid expansion in both, capacity and generation. China, Germany and Japan, three of the world's four largest economies, as well as India, now generate more power from renewables than from nuclear power.

Global investment in renewable energy totalled US$268 billion in 2012, down from US$300 billion the previous year but still five times the 2004 amount.

Globally, since 2000, the annual growth rates for onshore wind power have averaged 27%  and for solar photovoltaics 42%. This has resulted in 2012 in 45 GW of wind and 32 GW of solar being installed, compared to a net addition of 1.2 GW of nuclear. China has a total of 75 GW of operating wind power capacity, roughly doubled in each of the past five years.

For the first time, China and India generated more power from wind than from nuclear plants in 2012, while in China solar electricity generation grew four-fold in one year.

The World Nuclear Industry Status Report is posted at www.worldnuclearreport.org

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EIA and IEA reports
The newly-released US Energy Information Administration's 'International Energy Outlook 2013' estimates that total world energy consumption will increase by 56% between 2010 and 2040, from 524 quadrillion British thermal units to 820 quadrillion. Most of that growth is anticipated in Asian and Middle Eastern countries outside the OECD, while energy use in OECD countries is expected to increase by 17%.

Global electricity generation is predicted to grow by 93% from the 2010 level to reach 39,000 TWh by 2040. The EIA predicts that renewables (including hydro, wind and solar) and nuclear power will grow by 2.5% annually between 2010 and 2040.

Electricity generation from nuclear plants is forecast to increase from 2620 TWh in 2010 to 5492 TWh in 2040. Substantial increases in nuclear generating capacity are projected, including 149 GWe in China, 47 GWe in India, 31 GWe in Russia and 27 GWe in South Korea. However, nuclear's share of global electricity production will amount to just 14% in 2040 even under the EIA's growth scenario. The share of renewables is forecast to increase from 21% in 2010 to 25% in 2040.

On June 26, the International Energy Agency (IEA) published an upbeat report on the expected progress of renewable energy worldwide. The IEA's second annual Medium-Term Renewable Energy Market Report (MTRMR) foresees that power generation capacity from hydro, wind, solar and other renewable sources worldwide will exceed that from gas and be twice that from nuclear by 2018. Renewable power production is expected to grow by 40% over the next five years. Renewables will make up "almost a quarter of the global power mix by 2018, up from an estimated 20% in 2011". The share of non-hydro sources such as wind, solar, bioenergy and geothermal in total power generation will double, reaching 8% by 2018, up from 4% in 2011 and just 2% in 2006.

The IEA also notes that "in addition to the well-established competitiveness of hydropower, geothermal and bioenergy, renewables are becoming cost-competitive in a wider set of circumstances. For example, wind competes well with new fossil-fuel power plants in several markets, including Brazil, Turkey and New Zealand. Solar is attractive in markets with high peak prices for electricity, for instance, those resulting from oil-fired generation. Decentralised solar photovoltaic generation costs can be lower than retail electricity prices in a number of countries."

US Energy Information Administration, 'International Energy Outlook 2013', www.eia.gov/forecasts/ieo
International Energy Agency, Medium-Term Renewable Energy Market Report, www.iea.org/Textbase/npsum/MTrenew2013SUM.pdf
World Nuclear Association, 26 July 2013, Asian growth to boost global energy demand, www.world-nuclear-news.org/EE-Asian_growth_to_boost_global_energy_demand...
Karel Beckman, 12 July 2013, 'The new energy world according to the IEA', www.energypost.eu/index.php/the-new-energy-world-according-to-the-iea