Can nuclear energy be a competitive climate change option today?

6 November 2019

Kirsty Gogan

Co-founder

Energy for Humanity

Lessons from Recent World Experience

Eric Ingersoll, Andrew Foss, John Herter, Kirsty Gogan

LucidCatalyst, Energy Options Network, Energy for Humanity

 

To manage climate change, we need to reduce carbon dioxide emissions from the global energy system to near zero by mid-century. Meanwhile, global energy demand might double from current levels. All credible studies, including the IPCC, IEA and European Commission therefore conclude that nuclear energy should continue to play a significant role in a cost effective, timely and successful climate mitigation effort.

However, in light of high profile construction delays and cost overruns suffered by a handful of new nuclear projects in Europe and the USA, some argue that nuclear projects may be too expensive or slow to play a substantial role in decarbonizing the global energy system.

The truth is that the majority of nuclear projects around the world are being built today at a 50 to 80 percent lower capital cost, and almost twice as fast, as recent projects in the United States and Europe. At this cost level, nuclear is highly competitive with both fossil-fueled sources of electricity as well as many renewable sources.

Research by LucidCatalyst on behalf of the Energy Technologies Institute found that the gap between most and least expensive nuclear project costs is due principally to best in class industrial practice, labor productivity and a strategy to build the same design repeatedly, while maximizing learning between units. The cost reductions had very little to do with lower labor rates, build quality or rigor of safety regulation.

These best practices are not country-specific. They can be transferred globally and improved on to further reduce cost and build times. Indeed, historical examples of this include successful, and relatively low cost, nuclear new build programmes in the United States, as well as in Sweden and France when rapid deployment of nuclear largely, and rapidly, decarbonised electricity production.

A significant part of the higher costs can be indirectly traced back to inexperience and First-of-A-Kind (FOAK) projects. Building something for the first time or in a country for the first time (or after a prolonged pause) makes it very hard to implement best practices and high labor productivity – two of the big cost drivers according to our study – throughout the project.

Achieving cost reduction will require significant, internal transformation of the nuclear industry and this must be supported by public policy and continuing RD&D. While these cost reduction initiatives will not address all the barriers to global nuclear energy expansion, they will make nuclear a far more viable option for decarbonization, and as a result, our decarbonization efforts significantly more efficient.

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