Nuclear power and the energy transition in non-OECD countries
While COP26 attendees in Glasgow discuss emission reduction commitments, funding requirements and ways to achieve net zero CO2 emissions, the energy transition challenge is central in non-OECD countries. There are at least four reasons to focus on these countries: (1) They accounted for around 60 percent of global primary energy and electricity consumption in 2020; (2) with their high dependence on fossil fuels (86 percent) and the consumption of 82 percent of the world’s coal, they caused around two thirds of the world’s energy-related CO2 emissions; (3) Their energy needs are expected to grow faster than OECD countries over the next 30 years due to population, income and urbanization increases, which will further increase their share of global primary energy and greenhouse gas emissions; (4) These countries need funding and technical support from the OECD countries, which committed in Paris to provide US $ 100 billion a year to support developing countries in their efforts to mitigate and adapt to climate change. Although a consensus has solidified on the importance of investing in renewable energy, the place of nuclear energy on the list of zero emission options is more uncertain, but potentially very significant. In non-OECD countries, the long development times and high costs associated with building large reactors will prevent nuclear power from increasing its share of electricity generation (currently 5 percent of electricity generation and 16 percent of zero carbon electricity). But the emerging generation of small modular reactors (SMRs) and other advanced nuclear technology could increase their profitability as a more important source of clean electricity in 2030-2050.
At the G20 meeting before COP26, the heads of state and government agreed to end foreign financing of coal-fired power plants by the end of the year. Another commitment followed shortly afterwards at COP26, at which 23 countries – including the most important non-OECD coal consumers Indonesia and Vietnam – committed to phase out coal. These policies will push some non-OECD countries, particularly in coal-intensive South and Southeast Asia, to look for other sources of energy to meet their growing electricity needs. They have already started diversifying away from coal to natural gas and imported liquefied natural gas (LNG), as well as renewables and, in some cases, nuclear power.
Nuclear power plants are currently in operation in fifteen non-OECD countries and offer a solid, emission-free and base-load capable substitute for coal. However, it does not appear that nuclear energy – aside from China, India, Russia and the United Arab Emirates, four countries actively involved in new nuclear projects in their own country – will make a major contribution to major non-OECD emitters by 2030 in view of the planning status and the long lead times for the completion of conventional, large-scale nuclear blocks. Even in China and India, which have made new commitments to net zero by 2060 and 2070 respectively, and are currently building 25 of the 35 nuclear power plants under construction in non-OECD countries, the role of nuclear power in reducing coal production will be up 2030 will be modest, which account for less than 6% of total production.
Post-2030, given the accelerating innovation in the nuclear sector and the emergence of SMR technologies now entering the demonstration phase in the US, Canada and the UK, in some cases in collaboration with Japanese and South Korean ones, the story could be very different Companies. China has also begun construction of an SMR demonstration project for a 125 megawatt (MW) pressurized water reactor on land, and Russia is working on a modification of a 50 MW icebreaker reactor for remote sites. SMRs of 300 MW or less create new opportunities for nuclear use in non-OECD countries, including those with smaller electricity systems and without the means to pay for $ 5 billion to $ 10 billion in third generation reactors. These modular systems can be built faster and can offer grid flexibility to complement intermittent renewables. They can also provide heat for industry and communities, energy for desalination plants, and hydrogen to replace natural gas and oil in various sectors. Sufficient economies of scale and cash injections from a variety of sources – private, public and multilateral – will be required to get SMRs off the ground, but their potential to make clean energy stable and affordable should not be ignored.
In its Roadmap to Net Zero by 2050, the International Energy Agency emphasized the importance of innovation and the development of technologies that are not yet commercially operated. COP26 is an opportunity to highlight the emergence of new nuclear technologies that could make a significant contribution to the clean energy transition in non-OECD countries between 2030 and 2050. The US State Department’s announcement at COP26 that a Nuclear Futures Package worth 25 million was a good first step. However, the United States, Canada and the United Kingdom – currently leaders in SMR innovation – along with France, Japan, South Korea and other OECD countries, should make further efforts to work with non-OECD countries to prepare for SMR commercialization and help ensure that these technologies are safely, securely and economically adopted and operated.
Dr. Robert F. Ichord, Jr. is a non-resident Senior Fellow at the Atlantic Council Global Energy Center.