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.
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.
2. See for example tables 33 and 34, p.56, www-pub.iaea.org/mtcd/publications/pdf/pub1304_web.pdf