Nuclear Energy and the Decarbonisation of Electricity · •Nuclear energy can play a large role in the future, but the electricity markets must be modernized and nuclear technology

© 2019 Organisation for Economic Co-operation and Development

Reliable Long Term Electricity Supply and the Role of Nuclear EnergyBudapest, Hungary - 25 January 2019

Nuclear Energy and the Decarbonisation of Electricity:Challenges and Opportunities

William D. Magwood, IVDirector-General

Nuclear Energy Agency

4th IEEJ/APERC International Energy Symposium17 May 2019

IEEJ：May 2019 © IEEJ2019

© 2019 Organisation for Economic Co-operation and Development© 2018 Organisation for Economic Co-operation and Development 2

The NEA: 33 Countries Seeking Excellence in Nuclear Safety, Technology, and Policy

• 33 member countries +strategic partners (e.g., China,India, etc.)

• 8 standing technicalcommittees and over 80working parties and expertgroups

• Major International Initiatives—GIF, MDEP, IFNEC

• NEA Data Bank

• 23 international joint projects2



COP 21 and Energy Production

UN-sponsored meetingconcluded with 195 countriesagreeing to developapproaches to limit globalwarming to below 2°C.

Energy represents 60% ofglobal CO2 emissions - ¾ ofglobal electric powerproduction today is based onfossil fuels.

Many countries – includingChina and India indicate thatnuclear will play a large role.

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• Paris Agreement is intended to hold “increase inglobal average temperature to well below 2°C”.

• Current emission intensity is 570 gCO2/kWh - targetis 50 gCO2/kWh

• Electricity contributes 40% of global CO2 emissionsand will play key role. Annual emissions fromelectricity will need to decline 73% (global) and 85%(OECD countries).

Paris Agreement Implies a 50 gCO2/kWh Target

Source: OECD Environmental Outlook

GHG Emissions will need to decline despite GDP growth ...

___ Baseline----- Paris Agreement goals

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© 2019 Organisation for Economic Co-operation and Development© 2018 Organisation for Economic Co-operation and Development

All Costs Should be Reflected in Future Energy Decisions

• Market prices and production costs account for an important share of the overall impacts of electricity.

• However, the market value of electricity is not the whole story:– “Grid-level” Costs– Atmospheric pollution, climate

change risks and land-use– Impacts on security of supply and

societal costs• The price of electricity in today’s

markets does not accurately reflect the FULL COSTS of electricity, which include the impacts on society and the environment.

Plant-level production

costs

Grid-level costs

Full costs including all

external costs

http://www.oecd-nea.org/ndd/pubs/2018/7298-full-costs-2018.pdf

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http://www.oecd-nea.org/ndd/pubs/2018/7298-full-costs-2018.pdf


• Total system costs are the sum of plant-level generation costs and grid-level system costs • System costs are mainly due to characteristics intrinsic to variable generation

System costs depend on:– Local & regional factors

and the existing mix – VRE penetration and

load profiles– Flexibility resources

(hydro, storage, interconnections)

Additional impacts on load factors of dispatchable generators and prices.

Profile costs(Changing mix)

Balancing costs(Short-term variations)

Transmission and distribution costs

Assessing the System Costs of Electricity

Sour

ce: L

. Hirt

h

VREs are not always available

VREs are difficult to predict

Good VRE sites are distant from load centers

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10% Variable Renewables 75% Variable Renewables

• High VRE penetration result in challenges for system management.• Residual demand (BLUE line) – the available market for dispatchable generation becomes

volatile and unpredictable.

High VRE Shares Result in Large Inefficiencies

Annual Excess production = 37%

Hours

Hours

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As VRE Share Increases System Costs Grow Quickly

• System costs are large and increase with VRE generation share - Profile costs are the dominant component.

Total Costs Breakdown of System Costs

0

10

20

30

40

50

60

Reference No Intc No Intc, no hydro

10% VRE 30% VRE 50% VRE 75% VRE

Syst

em c

osts

(USD

/MW

h VR

E)

Profile Costs Connection Costs Balancing Costs T&D Costs

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Decarbonising the electricity sector in a cost-effective manner while maintaining security of supply requires:

–Recognising and allocating system costs to the technologies that cause them

–Encouraging new investment in all low-carbon technologies by providing stability for investors

–Enabling adequate capacity, transmission and distribution, and flexibility

–Implementation of carbon pricing – the most efficient approach for decarbonising electricity

Policy Recommendations for Cost-efficient Decarbonisation

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Key Observations Renewables will be deployed in

significant quantities and arealtering electricity markets.

Natural gas prices are at historiclows in many markets and areexpected to remain low for manyyears – if not decades.

According to Eurostat, CO2emissions in the EU increased 1.8percent in 2017 despite a 25percent increase in wind powerand 6 percent growth in solar.

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Key Observations (2) While electricity production

receives most focus, around 20% ofall , CO2 emissions originate fromindustrial processes requiring heat.

Nuclear energy can play a largerole in the future of both electricityand industrial heat – if it can adaptto future markets.

Currently, nuclear energy use is ona path to decline in OECD countriesand grow in non-OECD countries inAsia, Africa, the Middle East, andLatin America.

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For Nuclear - Cost is the Controlling Issue

Source: NEA

In today’s market, the capital cost of nuclear power is a major issue.

Lack of construction experience and weak supply chains make construction costs uncertain.

As the costs of alternatives drop, these high costs become unsustainable.Overnight Construction Costs

for Plants Built in 2020

0

1000

2000

3000

4000

5000

6000

7000

OCGT CCGT Coal Nuclear Wind - Onshore Solar

Inve

stm

ent C

osts

(USD

/kW

)Overnight Costs IDC

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Innovation is Needed to Assure the Long-Term Role of Nuclear Energy

• Improving cost effectiveness and flexibility

• Enabling high levels of safety at lower cost

• Assuring a sustainable, long-term fuel cycle while addressing policymaker concerns about nuclear proliferation

• Resolving questions about nuclear waste and environmental impacts

• In general: Nuclear energy must fit in the future, as yet uncertain, global energy framework.

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Traditional Gen II/III Reactors:Success and Challenges

Global Successes

•Well-understood technology,can be built at large scale

•Despite 3/11, excellentrecord of safe operationaround the world

•Provides highly reliable,dispatchable, zero-emissionenergy

Ongoing Challenges

•“Bet-the-Company” reputation for new projects.

•Costly construction,operation and regulation

•Nuclear waste disposal

•Persistent public concernsabout safety in somecountries

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• New Deployment Models—Low cost modules can be installed as needed

• Higher Flexibility—small reactors may load-follow and be deployed in niche markets

• Manufacturability—enables factory construction, increasing quality and reducing cost, uncertainty, and schedule risk

• Safety—SMRs typically have small potential source term and large water inventories; potential for no need for offsite emergency response

Growing Global Interest

First technologies now nearing regulatory approval

Major technology projects underway in US, France, UK, and other countries

High interest in both OECD countries and developing economies

Small Modular Reactors

NuScale Conceptual Design15



Generation IV:20 Years of R&D Activity But

No Demonstrations in OECD Countries

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Nuclear Innovation Headwinds:Little Progress in the Last 25 years

COST•Nuclear technology researchbudgets have been under pressure inmost countries for the last decade.

•Nuclear technology often requiresan order-of-magnitude increase infunding to transition betweenresearch and engineering-scaledemonstration.

•The cost and risk of nucleartechnology innovation has becomeprohibitive in many countries.

REGULATORY•The job of today’s nuclearregulatory organisations is to assurepublic safety, not to promoteinnovation.

•Regulators in most countries willnot actively participate intechnology development – but willwait for the finished technology tobe presented for approval.

•Regulators are often viewed byresearchers and industry as abarrier to innovation.

INFRASTRUCTURE•Unlike many other areas ofinnovation, nuclear technology oftenrequires the availability of specialfacilities (test reactor, hot cells, testloops, etc.) and nuclear-skilledworkers.

•Tests using fissile materials requireappropriate facilities, trainedworkforce, security and licencing.

•Much of the global infrastructurewas built more than 40 years ago andis shrinking steadily.

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Nuclear Innovation 2050:Pursuing Global Agreement on theNuclear R&D Needs for the Future

• What technologies will be needed in 10 years? 30 years? 50 years?

• What R&D is needed to make these technologies available?

• Is the global community doing the R&D needed to prepare for the future?

• Can we cooperate to do more?

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SHORT TERM MEDIUM TERM LONG TERM

Ageing Management and Long Term Operation Decommissioning Technologies

Advanced Manufacturing and Construction Waste Management & Disposal

Nuclear Process Heat/Cogeneration (550/1000 C)

(Gen IV) Advanced Fuels & Materials

Hybrid Systems

Advanced Recycling

Severe Accident Knowledge and Management

ATF

R&D Infrastructures and Demos

NI2050 Targets for Innovation

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Passive Safety

ENABLERS: Life Cycle Management/Modelling and Simulation/Robotics and I&C

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Concluding Thoughts

•To meet global energy and environmental requirements, all low-carbon technologies must be applied in an optimized fashion.

•Nuclear energy can play a large role in the future, but the electricity markets must be modernized and nuclear technology must evolve to meet global needs

•In today’s environment, SMRs appear to have the best prospects for significant new nuclear deployment in OECD countries

•For the long-term future, we will need advanced fission energy technology that can be built and operated at costs comparable to other energy technologies.

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Thank you for your attention

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Contact :[email protected]　

Documents

Nuclear Energy and the Decarbonisation of Electricity · •Nuclear energy can play a large role in the future, but the electricity markets must be modernized and nuclear technology