The Organisation for Economic Co-operation and Development’s Nuclear Energy Agency (OECD-NEA) on 24 June launched a series of policy briefs that examine nuclear energy’s role in the post-pandemic economic recovery. The policy briefs have four themes: building resilience; job creation; cost-effective decarbonisation; and unlocking finance.
NEA said the COVID-19 pandemic has had "significant impacts" on the global economy and energy sector, underlining the importance of electricity reliability and resilience during major disruptions.
“With governments considering a broad range of options for economic recovery and job creation, it is becoming increasingly clear that stimulus packages have the opportunity to support energy systems that both fulfil these criteria while meeting long-term environmental goals and energy security,” it said.
NEA is examining the regulatory and operational impacts of the crisis, and working with its members for exchanges of policy approaches and best practices around the world. NEA issued the policy briefs as part of these efforts, and is hosting a series of discussions to explore the role that nuclear energy can play in the post-COVID-19 recovery, whilst also supporting the path towards a truly sustainable and environmentally responsible energy future.
The four policy briefs are:
- Nuclear power and the cost-effective decarbonisation of electricity systems.
- Creating high-value jobs in the post-COVID-19 recovery with nuclear energy projects.
- Unlocking financing for nuclear energy infrastructure in the COVID-19 economic recovery.
- Building low-carbon resilient electricity infrastructures with nuclear energy in the post-COVID-19 era.
On cost-effective decarbonisation of electricity systems, NEA encourages governments to take advantage of the post-COVID-19 economic recovery to accelerate the energy transition towards meeting climate objectives. It says post-pandemic recovery plans to reconcile climate objectives with economic goals need to put system costs at the heart of energy policy. “Nuclear energy projects achieve deep decarbonisation with optimal use of land and mineral resources. Moving to a carbon neutral electricity system without nuclear power would significantly increase system costs and threaten security of supply.” However, achieving cost-effective decarbonisation requires structural reform of the electricity market.
On creating high-value jobs, NEA says nuclear power is capable of supplying large amounts of low-carbon electricity and heat cost-effectively while creating a large number of high-value jobs in the local and national economies. “Investing in nuclear energy creates a large number of high-skilled jobs, accelerates the transition to a low-carbon economy, and increases energy resilience. Nuclear energy projects are a proven way to create large numbers of long-term, high-skilled domestic jobs that pay premium wages. Nuclear projects provide high spill-over investment into the local and regional economy.”
On unlocking financing, the sheer size of nuclear projects might be a barrier in some markets where private investors are looking for short-term paybacks, NEA notes. However, during a period of economic recovery, large-scale and long-term energy infrastructure projects, such as nuclear power plants, can galvanise the social cohesion and economic spill-overs required to relaunch general economic activity, “Governments should incentivise investments in resilient low-carbon energy infrastructure, such as nuclear energy, in the aftermath of the COVID-19 pandemic.” Policy and market frameworks to incentivise investment in essential infrastructure that supports low-carbon electricity security and economic development are needed.
“Transitional, targeted government support for nuclear energy projects will be indispensable to unlock the benefits of nuclear energy in the post-COVID-19 economic recovery. Government support can and should be leveraged to attract cost-effective private financing to deliver nuclear energy infrastructure projects.” There is currently a window of opportunity for governments to support sustained cost reductions in nuclear energy projects through timely new build decisions – thus reinforcing the process of learning by doing and allowing these designs to move along their learning and cost curves.
On building low-carbon resilient electricity infrastructures, NEA notes that during the COVID-19 crisis, nuclear power has continued to generate electricity reliably and around the clock, ensuring the continuous resilient operation of critical services indispensable to cope with the global health crisis and maintain social stability. “Nuclear power has been an important source of power system flexibility, helping to maintain electricity security by operating in a load-following mode, complementing the supply of variable renewable generation.”
NEA concludes that nuclear power is a key contributor to electricity security and already contributes positively to building a low-carbon resilient infrastructure at the plant and system levels.
“Nuclear energy, both new nuclear projects and the long-term operation of existing reactors, can play a key role in the post-COVID-19 economic recovery efforts by boosting economic growth in the short term, while supporting, in a cost-effective manner, the development of a low-carbon resilient electricity infrastructure in the long term.”
Speaking at a webinar based on the briefs, NEA Director-General William Magwood said the NEA believes that investments made during the COVID-19 pandemic recovery should be made with the long term in mind. "It is possible we can spend a lot of money on the short term that in the long term will not benefit us," he said. "We believe at the NEA that the long-term investments that are made to improve our energy infrastructure to prepare for a low-carbon future should include a consideration of nuclear energy."
He noted that while organisations like the IEA and NEA give their opinions, "each national government really has to look at its particular situation carefully and that's where system costs are very important because the resources, the grid, the options are different country to country".