IEA calls for investment in nuclear to achieve climate goals

3 June 2019

The International Energy Agency (IEA), in a report published on 28 May,  warned that a decline in nuclear energy capacity would threaten climate goals and supply security unless advanced economies find a way to extend the operating lives of their reactors.

Nuclear Power in a Clean Energy System concludes that a failure to invest in existing and new nuclear plants in advanced economies would have implications for emissions, costs and energy security.

The IEA says nuclear is needed to achieve sustainable energy goals, and that without action to provide more support for nuclear power, global efforts to transition to a cleaner energy system will be more difficult and expensive.

Removing nuclear from the energy equation results in higher electricity prices for consumers, says IEA, adding that replacing nuclear with renewables would be more expensive. The report pointed out that markets and regulatory systems today often penalise nuclear power by not taking into account its value as a clean energy source and its contribution to energy security. It said that strong policy support is needed to secure investment in existing and new reactors. The focus should be on designing electricity markets in a way that values the clean energy and energy security attributes of low-carbon technologies, including nuclear power, it says.

The report recommends that markets should value dispatchability and should properly compensate nuclear power plants that provide the system services needed to maintain electricity security, including capacity availability and frequency control services. It added that licensing processes should support new construction by not leading to project delays and cost increases that are not justified by safety requirements.

Nuclear is currently the world’s second-largest source of low-carbon electricity, behind hydropower. Nuclear accounts for 10% of global electricity generation but many of the world’s 452 reactors are set to close as cheap gas, and more stringent safety requirements make it uneconomical to operate them. “Without policy changes, advanced economies could lose 25% of their nuclear capacity by 2025 and as much as two-thirds of it by 2040,” the IEA writes in report. Although wind and solar capacity have increased by 580GWe in advanced economies over the past 20 years, IEA estimates that the 36% share of clean energy sources in global power supply in 2018 was the same as two decades ago due to the decline in nuclear.

To offset further expected decline in the next two decades, renewables investment would have to grow fivefold, but that would not only be very expensive but would also meet public resistance and require significant power grid investment, IEA said.

IEA director Fatih Birol said on a webcast that the agency is not asking countries that have phased out nuclear to reconsider, but that those who have continued with nuclear should do more to support the industry. IEA Energy Markets chief Keisuke Sadamori also noted that it is more expensive to build new wind and solar than to extend the lifespan of existing reactors, which require an investment of $500 million to $1 billion per GW of capacity.

The report, which was discussed at the 10th Clean Energy Ministerial (CEM10) in Vancouver, Canada, makes eight policy recommendations:

  • Keep the nuclear option open by authorising lifetime extensions of existing plants for as long as safely possible;
  • Value dispatchability by designing the electricity market in a way that properly values the system services needed to maintain electricity security and ensuring that the providers of these services, including NPPs, are compensated in a competitive and non-discriminatory manner;
  • Value non-market benefits by establishing a level playing field for nuclear power with other low-carbon energy sources and remunerating it in recognition of its environmental and energy security;
  • Update safety regulations where necessary to ensure the continued safe operation of NPPs, and where possible allow  flexible operation of NPPS to supply ancillary services;
  • Create an attractive financing framework by setting up risk management and financing frameworks that can help mobilise capital for new and existing plants at an acceptable cost;
  • Support new construction by ensuring that licensing processes do not lead to project delays and cost increases that are not justified by safety requirements including facilitating standardisation and learning-by-doing across the industry;
  • Support innovative new reactor designs by accelerating innovation in new reactor designs, such as small modular reactors (SMRs), with lower capital costs and shorter lead times and technologies that improve operating flexibility to facilitate integration of increasing wind and solar capacity into the electricity system; and
  • Protect and develop the human capital and project management capabilities in nuclear engineering.



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