Alongside hydroelectricity, nuclear energy generates three-quarters of the world’s low-carbon emissions. An ‘Ugly Duckling’, nuclear power’s usage has, however, been dwindling in comparison to other ‘clean’ energy sources, largely due to public perception. Disasters such as Chernobyl and Fukushima have stoked fear about nuclear power and many governments, such as in Switzerland and Germany, have responded by phasing out their nuclear sectors. Predictions state that the number of nuclear plants could fall by two-thirds by 2040 in advanced economies resulting in up to 4 billion additional tonnes of carbon emissions. However, its low emissions and consistent energy production, nuclear power is still considered by many to be critical in achieving net-zero emissions. Investors and other stakeholders in the energy sector should therefore have an understanding of the role nuclear energy will play in our energy future.
Nuclear power’s main advantage is being a dependable source of low-carbon electricity. It is only through the ancillary use of fossil fuels during a plant’s construction, mining and fuel processing that greenhouse gases are emitted. Furthermore, nuclear plants have a high capacity factor (CF); the percentage of time they actually produce energy. In 2016 nuclear plants had on average a 92.3% capacity factor, which very high in comparison to hydroelectricity, wind and solar which averaged out to CFs of 38.2%, 34.5% and 25.1% respectively. Nuclear power’s high capacity factor indicates that it has a reliable output of energy, and as opposed to solar and wind it does not suffer from intermittent generation. However, the power output of nuclear plants can’t be scaled up and down, thus the primary use of nuclear fission is for delivering ‘baseload power’: the minimum amount of power demanded by an energy grid. To build a truly sustainable energy grid, the consistency of nuclear power could be integrated with scalable power sources such as hydropower and stored electricity from renewables like solar and wind power.
Nuclear energy’s high operational and investment costs can, however, be an impediment. Capital investment into plant projects is typically between £500M – £1B, creating a potential barrier for new projects. Furthermore, new regulations on reactor cooling water make plant maintenance expensive. In comparison, alternative renewable energies like wind and solar are significantly cheaper investments and have lower maintenance costs. Also, with radioactive isotopes like uranium-235 being found only in finite amounts and in specific geographic locations, some countries are unwilling to import the fuel source as a result of trade complications. Finally, nuclear energy produces radioactive pollutants as waste-products, which can have harmful effects on living organisms. The infamous 1986 Chernobyl explosion is an extreme example of nuclear energy’s potential to cause disasters. In Chernobyl an overactive water-cooled reactor led to an uptick in thyroid cancer cases across Belarus, Ukraine and Western Russia. This was because citizens were drinking contaminated milk which contained high doses of iodine-131 and the populations surrounding the explosion site were not evacuated to safe distances. More recently, following a major earthquake, a tsunami flooded the power supply and cooling system of three nuclear reactors in Fukushima, Japan, which resulted in 154,000 citizens having to be evacuated from a 12-mile exclusion zone.
Pre-Fukushima, the OECD published a study showing that 37% of Europeans were clearly opposed to nuclear energy, and although most participants believed nuclear power improved energy security, 53% believed that the risks of nuclear power outweighed its advantages. After the incident, detractors from nuclear seemed to become more vocal, with over 200,000 people protesting across Germany, 20,000 in Switzerland and hundreds of thousands attending protests in Taiwan from 2011 through 2014. This outcry led to many governments deciding to phase out nuclear power completely, with countries such as Belgium, Germany and Switzerland vowing to phase out nuclear power completely.
As public opinion and stringent regulations threaten to close more nuclear plants, it is important efforts are made from a policy standpoint to retain the carbon benefits of nuclear power. Governments could explore long-term fixed-price contracts so that nuclear energy maintains a guaranteed contribution to energy grids. Alternatively, bodies could introduce a Carbon Floor Plan to tax fossil fuel usage on electricity generation. This may prevent the use of natural gas and oil to compensate for decreased nuclear engagement.
In the late 1990s, nuclear power contributed 25% of the UK’s total annual electricity generation but this has since declined to 21% with older plants shutting down. As part of the UK’s New Build Plan, EDF Energy, a European pioneer in nuclear energy, is planning life extensions which average 8 years for its advanced gas-cooled reactors. They also announced a seven year life extension for Hinkley Point, a £150M project to prepare Dungeness with a 10-year license extension to 2028 and a £600M investment in upgrading 8 plants to enable continued UK nuclear operation. These huge investments provide a strong case for implementing lifetime extensions elsewhere in Europe too, even if wind and solar profits accelerate. In order to achieve the International Energy Agency’s international climate goals an 80% increase in global nuclear power production would be required. Preventing their premature decommissioning and enabling longer extensions would help meet this target. The UK has also created a new nuclear sector deal whereby the government will raise total Research & Development (R&D) investment to 2.4% of GDP by 2027, increase the rate of R&D tax credits to 12% and to invest £725 million in a new Industrial Strategy Challenge Fund Programme to capture the value of innovation within the nuclear sector. Under this scheme, the UK is making use of fast neutron reactors which have 60 times the amount of energy from uranium.
Another example where nuclear energy is valued is in the US where Bill Gates’ venture capital group TerraPower LLC and GE Hitachi Nuclear Energy are planning to commercialise a station called Barium. They are aiming to store nuclear energy supplies to grids alongside solar and wind power and fortunately this is all with the US Energy Department’s backing. This plan also aims to provide more consistent temperatures within a plant so maintenance costs will be minimised due to less wear and tear.
Overall, nuclear energy usage is in decline for multiple reasons, including its biohazard waste and unprecedented market conditions that create barriers to lifetime extension investments. Nuclear energy’s harsh PR stories have tarnished its reputation; however it remains a clean energy source and will play a vital role in low-carbon energy frameworks. Therefore, consumers and investors should still consider implementing and elongating nuclear power’s potential, for the sake of a greener future.