Renewed interest in nuclear energy might yet support renewables in outpacing global coal-fired power generation. While this growth may not be sufficient to support an upward electricity demand trend, here's why a nuclear renaissance is a welcome resource, writes Nicolette Pombo-van Zyl.
In January, the International Atomic Energy Agency's (IAEA) Director-General, Rafael Mariano Grossi, advised that globally countries are either planning to introduce nuclear power in their energy mix or expand existing nuclear energy programmes.
"We have seen a clear positive shift in recent years, with a growing realisation that nuclear energy is an indispensable part of the solution to some of the most pressing global challenges of our time," said Grossi.
The IAEA outlines that aside from its low carbon credentials, nuclear power has other features that further support energy supply security and the clean energy transition.
"For example, one large nuclear power plant can replace multiple coal-fired power plants to provide the same level of energy. Or small modular reactors could be slotted in to replace the old coal-fired plants of similar size, on the same site."
Energy-intensive industries such as steel production, which use coal for heating and hydrogen production, could also be decarbonised using nuclear power, thanks to the ability of advanced reactors to produce high-temperature steam.
Also, uranium is available from a range of diverse producer countries and is incredibly energy dense, which means comparatively low volumes are required.
The 2026 global forecast for nuclear
The IEA's Electricity 2024 report forecasts global nuclear generation is almost 10% higher in 2026 compared with 2023.
This is as new plants start commercial operation in various regions, as well as France's nuclear recovery plan and expected restarts in Japan. Between 2024 and 2026, an additional 29GW of new nuclear capacity is expected to come online globally — more than half of them in China and India.
Notably, China commenced commercial operation of its first fourth generation reactor at the Shidaowan plant in December 2023. This 200MW unit has a high-temperature gas-cooled reactor using a modular design; there are 10 similar units planned for the site.
Bangladesh, with financial and technical support from Russia, currently has its first nuclear power plant (NPP) under construction at the Rooppur site.
This plant recently received its first fuel shipment and is officially scheduled to begin commercial operations in 2024. Japan is set to continue its revival of nuclear energy as public opinion starts to favour the restart of nuclear reactors for the first time since the Fukushima incident.
Current plans indicate a steady increase in operating capacity from 2024 to 2026, with a goal for nuclear to account for 20% of the country's energy mix by 2030. While development is underway in Egypt and plans afoot across Africa (refer to the sidebar), the El-Dabaa NPP will be the continent's second nuclear plant and a first for Egypt. The plant will comprise four units – each with a capacity of 1,200MW – equipped with a Generation III+ VVER-1200 reactor.
Compelling dual risks of construction and finance
At the COP28 climate change conference that concluded in December 2023, more than 20 countries signed a joint declaration to triple nuclear power capacity by 2050. Among the signatories are Ghana, Morocco and the UAE.
However, to achieve this goal the market must address reducing construction and financing risks. Financing nuclear projects entails hefty upfront costs spread over long periods. Thus, project profitability hinges on mitigating construction risks and managing capital expenses, especially sensitive to interest rate fluctuations.
The construction phase bears the brunt of risks, which include technical glitches, staff shortages and regulatory hurdles that prolong timelines and escalate expenses. Therefore, pre-construction completion of thorough design and planning, stringent documentation standards and integrated dependency planning are crucial. Well-structured projects with creditworthy operators are essential.
Government interventions like contracts for difference (CFDs) or guarantees can manage capital costs, though over-subsidisation risks must be monitored. State involvement in financing is common, as seen in China and India.
Guarantees, like those provided for the Vogtle NPP Units 3 and 4 in the US and loan guarantees in Sweden, reduce capital costs. Vendor financing, like Russia's for Rooppur (Bangladesh) and El-Dabaa (Egypt) plants and public support, as in the UK's Regulated Asset Base model, are other methods.
Stable energy sector frameworks by governments can mitigate operating risks. Instruments like PPAs and CFDs stabilise revenue, as seen in Türkiye's Akkuyu plant and UK's Hinkley Point C reactor. Dedicated institutions such as the International Bank for Nuclear Infrastructure (IBNI) provide financial and advisory services.
Addressing structural issues like supplychain disruptions and labour shortages is imperative, along with pooling demand in consortia to ensure steady revenue and standardising projects for risk mitigation and supply chain stability.
The taxonomy of nuclear in the energy mix
Green taxonomies are debated politically, with the EU considering nuclear energy as a transitional green power source. However, many major private banks exclude nuclear energy from their green financing frameworks. The COP28 declaration urges financial institutions to reconsider this stance and include nuclear energy in their energy lending policies to achieve the goal of tripling nuclear energy by 2050.
Once a nuclear power plant is commissioned, the steady sale of electricity and the low share of fuel cost in total costs make it a low-risk asset (although there are some risks in relation to technical issues and maintenance) and a stable fuel supply remain. Another IEA report, The Clean Energy Market Monitor, highlights that over the past five years, 28 reactors in 10 countries with a total capacity of 30.5GW started operations.
Collectively, these nuclear reactors avoid more than 16Mt of CO2 emissions per year by displacing mainly coal and natural gas power plants. This indicates a clear message that nuclear technology can enhance energy security and mitigate carbon emissions in alignment with global climate objectives.
Nuclear in Africa: 10 countries that could implement between 2030 and 2050
1. Algeria operates a research reactor and plans to commission a plant.
2. Egypt awarded a $25 billion contract for 4.8GW and began construction in November 2022.
3. Ghana began collaboration on SMRs with the US and Japan; and operates a research reactor.
4. Kenya is developing a policy organisation and regulatory regime with the aim to develop a 1GW plant.
5. Morocco signed an agreement with Russia to develop capacity and construct reactors.
6. Rwanda is working to set up a nuclear training centre with the help of Russia and has appointed members to a policy board.
7. South Africa, besides an existing plant (pictured), is finalising procurement of 2,500MW.
8. Sudan has engaged with the IAEA on an infrastructure review and signed agreements with supplier countries.
9. Tunisia originally hoped to develop nuclear power by 2020 and has remained actively engaged with supplier countries.
10. Uganda has acquired land for an NPP and signed agreements with Russia and China.
Small modular reactors (SMRs): Some of the facts
1. SMRs range from microreactors (below 10MW) to large reactors of up to 400MW.
2. They address some of the financial and construction risks of traditional nuclear plants.
3. They allow for serial factory production with the final product ready for shipment to sites.
4. Few currently operational with only two countries (China and Russia) operating SMRs and Argentina plans to connect its test reactor Carem25 in 2027.
5. The largest players in developing new technologies are the US, China and Russia and account for more than half of projects in the design phase.
6. In Europe, there are currently 13 ongoing projects at varying stages of the design process including in the UK, France, Denmark, the Czech Republic, Netherlands, Sweden and Italy.
7. The OECD Nuclear Energy Agency (NEA) estimates global SMR capacity to reach 21GW by 2035.
8. SMRs offer flexibility in energy systems, with some models exploring cogeneration or high-temperature steam for industrial use.
9. Micro-reactors are being developed for remote areas and specific applications.
10. New SMR models promise greater flexibility than current reactors and some combine SMRs with storage technology to boost system output during peak hours.
Russia going nuclear in Africa
Russia signed several deals with African countries at the 13th Atomexpo at the end of March 2024. The most notable is an agreement to get involved in lithium mining in Mali.
The West African country also signed a cooperation agreement with Russia in the field of civil nuclear power. Russia also signed a deal to build a nuclear power plant in Burkina Faso.
This follows a memorandum of understanding signed between Russia and Burkina Faso in October 2023 to construct said nuclear power plant.
If brought to fruition, the project would double the country's electricity production.
The Ministry of Energy in Algeria and Russian state nuclear corporation Rosatom signed a memorandum of cooperation around the peaceful use of nuclear energy.
This agreement, which will run for 2024 and 2025, involves:
• Health and nuclear pharmaceuticals;
• Radiation treatment;
• Research reactors;
• Scientific and technical training; and
• The development of nuclear technologies for peaceful purposes.
South Africa's Eskom and Rosatom entered a cooperation encompassing human resource projects and initiatives and personnel development.
Rosatom also reiterated a plan touted in 2023 which involves South Africa and the Russian state nuclear corporation jointly developing a floating nuclear power plant project for the country. ESI
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