Nuclear Power Is Staging A Remarkable Comeback

Authored by Tsvetana Paraskova via OilPrice.com,

• As governments around the world struggle with a seemingly insurmountable energy crisis, policymakers are reconsidering nuclear energy as a possible solution.

• Natural gas prices continue to break record highs, making the clean and reliable nature of nuclear power increasingly interesting for governments.

• While the IEA has highlighted the importance of nuclear power in combatting climate change, increasing extreme weather events could actually undermine nuclear power.

Faced with an unprecedented energy crisis, governments in the West are rethinking their long-held positions on the role of nuclear power generation, setting the stage for what could be the biggest energy source ‘comeback’ story of recent times. 

Support for nuclear has grown in recent months as policymakers see nuclear energy as an alternative to the most expensive gas countries have ever paid to import, and as a zero-emission electricity source that would help keep climate ambitions and targets alive.

Even Japan and Germany, which had vowed to reduce or phase out nuclear power as a source of electricity in the wake of the Fukushima disaster in 2011, are now considering using nuclear power for longer.

In the United States, the recently adopted Inflation Reduction Act extends tax credits and funding to nuclear power plants, while California is looking to keep its last operating nuclear power plant open beyond the planned closure deadline set for 2025. 

Keeping old nuclear plants operational beyond their original expiry date is not always easy due to the safety concerns associated with extending the lifetime of facilities. Yet, faced with new challenges and unattractive alternatives, governments are increasingly willing to compromise when it comes to solving energy shortages.

Perspectives are changing amid a global energy shortage and sky-high natural gas prices, especially in Europe and Asia, which are scrambling for non-Russian gas supply after Russia’s invasion of Ukraine and Putin’s weaponization of gas pipeline deliveries to Europe. 

IEA: Nuclear Power Set For Comeback

“The policy landscape is changing, opening up opportunities for a nuclear comeback,” the International Energy Agency (IEA) said in a June 2022 report.

According to the IEA, nuclear is well-placed to help decarbonize the electricity supply. Without nuclear power, net-zero by 2050 will be much harder to achieve, the agency said. 

Also, “extending nuclear plants’ lifetimes is an indispensable part of a cost-effective path to net zero by 2050,” the IEA says, adding that such extensions need substantial investment but they generally yield a cost of electricity that is competitive with wind and solar in most regions. 

Moreover, momentum is building behind small modular reactors which have lower costs and risks compared to traditional nuclear power plants, according to the IEA. 

Still, nuclear power will need strong policy and incentive support from governments to ensure the safe and sustainable operation of nuclear plants and to mobilize the necessary investments including in new technologies, the agency noted. 

Germany, Japan Reconsider Role Of Nuclear In Power Supply 

Some Western U.S. allies, including Japan and Germany, have signaled they could reconsider the role of nuclear energy to ensure more electricity and potentially make up for lower gas supply amid Russian cuts in Germany’s case, and high LNG prices in Japan’s case. 

Germany is debating whether to end nuclear power generation at the end of 2022, as planned, in light of the gas crisis. Germany has three remaining nuclear power plants, and they should be shut by the end of this year under a plan the country adopted to stop the use of nuclear energy following the Fukushima disaster. In early August, German Chancellor Olaf Scholz signaled that “it could make sense” to keep nuclear power plants operating. However, such a move could be difficult because many parties, including the Greens that are part of the coalition government, firmly oppose extending nuclear power generation beyond 2022. 

In Japan, in a major U-turn last week, the government now wants to restart more nuclear plants that were idled after Fukushima and is interested in developing small nuclear reactor technology, amid an energy crisis that has led to calls on consumers to conserve energy this summer.  

The U.S. Backs Nuclear With Inflation Reduction Act

In the United States, the Inflation Reduction Act – the Biden Administration’s major legislation to tackle climate change – recognizes the key role nuclear will play in achieving net-zero emissions. The Act allows new production tax credits (PTCs) for existing nuclear plants, as well as “technology-neutral credits” for clean energy, including for clean hydrogen production using nuclear-generated electricity.

Last year, nuclear accounted for 19% of U.S. electricity generation, and was the single largest source of zero-emission power supply, ahead of wind power generation with 9.2%, per EIA data.

“The IRA’s support for existing nuclear generators, advanced nuclear energy projects, and development of advanced nuclear fuel will enable nuclear energy to contribute significantly to US climate goals, and in doing so, will establish capabilities that can be exported to enhance climate efforts worldwide,” Stephen S. Greene, Nonresident Senior Fellow at the Atlantic Council Global Energy Center, wrote earlier this month. 

Also this month, California Governor Gavin Newsom proposed extending the lifetime of the state’s only operational nuclear power plant, Diablo Canyon, through 2035 – ten years after the planned closure date of 2025. The power plant currently supplies around 17% of California’s zero-carbon electricity supply and 8.6% of California’s total electricity supply, the draft proposal says. Without nuclear power, California could struggle to keep the lights on in summer heat waves after 2025.  

Climate Change Could Challenge Nuclear Plant Lifetime Extensions 

As heatwaves and other extreme weather events become more frequent, intense heat and droughts could challenge the life extension of old nuclear power plants. Case in point: in France, where nuclear power generation accounts for around 70 percent of the electricity mix, EDF warned early this summer that nuclear power generation in France would be reduced as high temperatures of rivers Rhone and Garonne make them too hot to cool reactors.   

In Florida, the U.S. Nuclear Regulatory Commission (NRC) rescinded in February this year a 2019 license to Florida Power & Light to extend the lifetime of two 50-year-old reactors for another 30 years, ordering a new environmental review, including potential risks that climate change could pose.