Eastern Promise: The Nuclear Renaissance in Asia

The West is falling behind in the race to install new nuclear capacity

Introduction

Last month saw the annual World Nuclear Symposium take place in London. The conference was viewed as a big success, with increasing interest in nuclear power as a means of providing clean, abundant energy to power the world. The conference also saw the launch of the biannual Nuclear Fuel Report (NFR) published by the World Nuclear Association. The report forecast a big increase in nuclear capacity expected by 2040. However, it also revealed significant regional disparities in the race to a nuclear future.

This article looks at where we are in nuclear power generation and the leaders and laggards in the forecasts for 2040. The latest nuclear fuel report is used as the main reference throughout. Usually, I provide links to references for readers, however, on this occasion, I obtained a media only copy where distribution is prohibited, so I cannot provide a link.

History of Nuclear Generation

Figure 1, taken from the NFR using data from the IAEA, shows the history of nuclear generation since the 1970s.

Figure 1 - History of Nuclear Electricity Generation

Electricity production grew rapidly until about 1990, then the rate of growth tailed off and plateaued in the mid-2000’s. After the Fukushima accident in 2011, with Japan and Germany closing many of their reactors. However, generation is now close to prior peaks as new generation has come online.

Figure 2 shows how North America and Europe dominate the current generating capacity, although China and the rest of Asia (including the Indian sub-continent) together are already nearly as large as North America.

Projected Growth in Nuclear Generation Capacity

The WNA produce three scenarios for nuclear generating capacity out to 2040 as shown in Figure 3.

Figure 3 - WNA Nuclear Generating Capacity Projections to 2040 (GWe)

The Reference Scenario assumes the relative economics of nuclear compared to other generation technologies remains largely unchanged over the projection period. However, political support for nuclear power is not expected to change significantly over the period. The Upper Scenario assumes new technological improvements reduce nuclear plant construction times and costs, resulting in the relative economics of nuclear improving. It also assumes that political support improves with greater policy support for all low-carbon energy sources. Nuclear is recognised as providing extra value in the form of reliable generation. The Lower Scenario assumes the cost of renewables falls and the challenges of slow nuclear construction times are not overcome.

The Lower Scenario projects installed capacity rising from 366GW in 2022 to 485GW in 2040, with a compound annual growth rate (CAGR) of 1.6%. The Reference Scenario predicts growth to 651GW and the Upper Scenario to 848GW with CAGRs of 3.6% and 5.4% respectively. These projections represent an increase over the last report, partly due to the changing attitudes in the US where existing plants are being given life extensions, Japan where their reactor restart plan is underway and France where plans to phase down nuclear power have been reversed. These developments outweigh the recent closures in Germany.

Regional Differences in Nuclear Growth

However, the headline growth figures mask large regional variations in expected growth. Figure 4 shows the expected growth by region.

Figure 4 - WNA Forecast Change in Nuclear Generating Capacity by Region 2023-2040 (GWe Net) Reference Scenario

The vast majority of the growth in the Reference Scenario is expected to come from China and the rest of Asia, with North America and Europe lagging behind. This results in China becoming by far the largest single country and the rest of Asia overtaking North America and closing in on Europe’s generating capacity. The Upper scenario sees China powering even further ahead as seen in Figure 5.

Figure 5 - WNA Generating Capacity by Region 2023 and 2040 Upper Scenario (GWe)

There was much handwringing in the press earlier this year that the UK was falling behind in the “global green race.” What they meant by this is not spending enough on renewables, electric vehicles, heat pumps and the like. However, if the Government is serious about decarbonising the grid, then reliable nuclear energy ought to play a big role in electricity generation because the storage required to make intermittent renewables work is simply too expensive. It looks like China and the rest of Asia have made that connection while Canada, the US and Europe are struggling to reboot their nuclear industries.

The Role of Small Modular Reactors (SMRs)

All the analysis above has focused on conventional, large scale nuclear reactors, typically with capacities of around 1,000MW or more. However, there is increasing interest in Small Modular Reactors (SMRs). These are smaller reactors with capacity up to around 300MW that are engineered to be built as modules in factories to provide economies of scale from series production and shorter construction times. SMR is a generic term that covers many different design types. They can be classified into two broad types, the first being smaller versions of the Light Water Reactor (LWR) designs used in most large reactors today and the second, sometimes termed advanced reactors, being a catch all for other reactor types such as gas-cooled reactors, fast neutron and molten salt reactors. The Nuclear Fuel Report helpfully provides a table of the most developed designs as seen in Figure 6.

Figure 6 - Small Modular Reactors (SMRs) Under Development

Russia already has a barge-based floating SMR power plant operating and China connected its high temperature gas-cooled SMR to the grid in December 2021 that as well as generating electricity can be used to provide industrial heat.

Designs in the west are less well advanced, however several companies such as GE-Hitachi, X-Energy and Terra Power are working with partners to secure licenses for their first reactors, with a view to have reactors operating by 2030-35. The UK Government has recently announced the results of an SMR competition, where six companies, including Rolls Royce, have been selected to go through to the next phase of development. However, the UK timetable suggests a final investment decision during 2029 and for the first reactor to be operational in the mid-2030s. Clearly, the west is behind Russia and China in SMRs, but has more designs under consideration so could catch up and overtake these countries.

The WNA has introduced the concept of a “generic SMR” covering only LWR-type designs and added this to their model of future generating capacity as shown in Figure 7.

Figure 7 - WNA Nuclear Generating Capacity Scenarios to 2040 including SMRs

The Lower Scenario predicts a small role for SMRs, reaching only 1.5GW (or about 5-10 installations) by 2040. The Reference Scenario projects a notable deployment of SMRs are a rate of 3-4GW per year and reaching 35GW (or 115-230 installations) by 2040. The Upper Scenario expects the deployment of SMRs to being in the late-2020s with growth of 6-7GW per year, reaching 83GW (275-550 installations) by 2040.

Conclusions

It is clear that a nuclear renaissance is underway, but most new developments are going to be in China and the rest of Asia. It appears the West has lost the political will and in many cases the skill base to build out new nuclear. There are encouraging signs in both Europe and the USA with life extensions, but precious little new capacity to be built by 2040.

Yet strangely, it is Europe that has the most stringent climate change legislation. Germany, that shut its remaining nuclear power plants earlier this year and is reopening coal plants this coming winter, and the UK have emissions reductions enshrined in law. If the West is serious about energy security and decarbonising electricity, it needs to accelerate its own nuclear renaissance.

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