1 © OECD/NEA 2010 Nuclear Renaissance and Impact on Energy Policies Dr Kazuaki Matsui Chair, Nuclear Development Committee OECD Nuclear Energy Agency

2 © OECD/NEA * TWh End of World War II 2 nd oil price shock US recession Black Monday stock market crash Asian economic crisis Dot-com bubble burst Global credit crunch 1 st oil price shock Source: IEA World Energy Outlook 2010 Slide Library Energy demand has climbed consistently since The financial & economic crisis is expected to result in a 1.6% drop in electricity demand in 2009 – the first fall of any kind since the end of the 2 nd World War Historical world electricity consumption

3 © OECD/NEA 2010 Energy growth in the WEO-2009 Reference Scenario Such energy growth is unsustainable and a major de-carbonisation of world economies is needed - only governments can make this change happen Mtoe Other renewables Biomass Hydro Nuclear Gas Oil Coal WEO-2008 total In the reference Scenario, global energy demand grows by average 1.5% p.a. to 2030; 22% more oil, 42% more gas, 53% more coal than today Source: World Energy Outlook, IEA 2009

4 © OECD/NEA 2010 Contribution of different technologies and measures to CO 2 emission reductions in the BLUE Map scenario, compared to the Baseline A sustainable option – the BLUE Map scenario

5 © OECD/NEA 2010 © OECD/IEA 2009  Based on a scenario to halve CO 2 emissions by 2050  Establish a baseline of technology status today  Identify and address technology-specific barriers  Create technical, policy, legal, financial, and public acceptance milestones and priority near-term actions  Create a process for stakeholder collaboration  Special developing country focus on engagement, national roadmaps  Identify partners for implementation  Support technology diffusion, knowledge sharing among countries The Role of the Energy Technology Roadmaps

6 © OECD/NEA 2010 Nuclear is Already a Widely Used Low-Carbon Technology Source: World Energy Outlook, IEA 2009

7 © OECD/NEA 2010 Nuclear capacity triples in the BLUE Map scenario, and its share of electricity generation rises from 14% today to 24% in Under a High Nuclear case, nuclear capacity could reach GW, providing 38% of electricity Growth of Nuclear Capacity and Electricity Generation to 2050

8 © OECD/NEA 2010 Region / country United States & Canada OECD Europe OECD Pacific China India Latin America Other developing Asia Economies in transition 5565 Africa & Middle East 5520 World Avoided Annual CO 2 Emissions Source: IEA, 2010 Emissions avoided (Mt CO 2 ) through increased use of nuclear energy in the BLUE Map scenario, compared to Baseline scenario

9 © OECD/NEA 2010 Nuclear power plant construction starts, 1955 to 2009

10 © OECD/NEA 2010 LocationNo. of unitsNet capacity (MWe) Argentina1692 Bulgaria China Finland France India Iran1915 Japan Korea Pakistan1300 Russia Slovak Republic2782 Chinese Taipei Ukraine United States Total REACTORS UNDER CONSTRUCTION – end 2009 Source: IAEA PRIS.

11 © OECD/NEA 2010 Key Findings (1)  Nuclear is a mature low-carbon energy technology that is already available for wider deployment  In the ETP BLUE Map scenario, nuclear capacity grows to GWe by 2050, providing 24% of global electricity  No major technological breakthroughs will be required to achieve a major expansion of nuclear capacity  Obstacles to this expansion are mainly policy-related, industrial and financial, rather than technological  But in the longer term, technological development will be needed for nuclear to remain competitive  A clear and stable commitment to nuclear as part of national energy strategy is a prerequisite  Financing will be a major challenge, and government support may be needed for private-sector investment

12 © OECD/NEA 2010  Nuclear expanded rapidly in the 1970s and 1980s, but few nuclear plants have been built in recent years  The industrial capacities and skilled human resources for building and operating nuclear plants will need to increase  The political, regulatory, construction and market risks of nuclear investments may be too large for the private sector  Electricity and carbon markets need to provide sufficient confidence of an adequate return on investment  Government support, such as loan guarantees, may be needed to start or re-start some nuclear programmes  Longer term, the increased involvement of private-sector financial institutions in nuclear projects will be important Industrial & Financial Aspects

13 © OECD/NEA 2010 Is Nuclear Competitive? (1) Levelised Cost of Electricity Generation by Region (5% Discount Rate) Nuclear is already a very cost competitive technology Source: Projected Costs of Generating Electricity, IEA/NEA 2010

14 © OECD/NEA 2010 Is Nuclear Competitive? (2) Levelised Cost of Electricity Generation by Region (10% Discount Rate) But nuclear costs depend strongly on the discount rate Source: Projected Costs of Generating Electricity, IEA/NEA 2010

15 © OECD/NEA 2010 Key Government Actions 1. Clear and sustained policy support, as part of long-term national energy strategy; 2. Efficient & effective regulatory system; 3. Plan for waste and spent fuel management, with clear financial arrangements 4. Electricity market arrangements (for instance, long-run contracts) adapted for long-term investments such as NPPs (high fixed costs) 5. Suitable CO 2 pricing/trading arrangements 6. Possibly government support to financing (loan guarantees, export credits, MFIs…) 15

16 © OECD/NEA 2010 Key Findings (2)  Industrial capacity to build nuclear plants will need to double by 2020 for expansion in line with the scenario  Known uranium resources are adequate beyond 2050, if realised sufficiently quickly, and exploration is expected to discover additional resources  A great increase in highly qualified and skilled human resources will also be needed  Progress needs to be made in building and operating facilities for the disposal of spent fuel & high-level waste  Safeguards and physical protection measures must be maintained and strengthened where necessary. Regional solutions need to be considered  Generation IV reactor and fuel cycle technologies show potential to offer improved sustainability, economics, proliferation-resistance, safety and reliability, starting before 2050

17 © OECD/NEA 2010 Known conventional resources Total conventional resources With unconventional resources With present reactors and fuel cycles With fast reactors and advanced fuel cycles > 3 000> 9 000> Uranium resources/consumption ratios, and impact of recycling Source: NEA, 2008 Approximate ratios at present annual consumption for different categories of resources

18 © OECD/NEA 2010  Continuous development of reactor and fuel cycle technologies is needed to maintain nuclear competitiveness  Next-generation nuclear technologies potentially offer improved sustainability, economics, safety and reliability  Leading nuclear countries are collaborating to develop such advanced Generation IV reactors and fuel cycles  Proliferation-resistant small modular reactors (SMRs) may be suitable for deployment in a wider range of locations  High-temperature reactors could expand the use of nuclear energy for industrial heat applications  The recycling of nuclear fuel in fast reactors could extend the lifetime of known uranium resources by several millennia Further Development of Nuclear Technology

19 © OECD/NEA 2010  Nuclear is a proven technology and is a least cost option for a low- carbon strategy provided financial costs are contained  Most energy studies recognise nuclear’s role. The IEA/NEA roadmap indicates that installed capacity should reach GW and supply 24% of the world’s electricity in 2050 under the sustainable growth scenario  However:  Governments need to make long term commitments  Industry needs to demonstrate building to time and budget  Repositories for HLW need to be built  The public need to be involved meaningfully  Financing, skilled workforce and nuclear capacities must be addressed  While no major technology breakthroughs are needed immediately, deployment of Generation IV technologies and advanced fuel cycle technologies are needed for nuclear to remain competitive. Conclusions