US study looks at nuclear export opportunities

6 August 2020

A new report by US consulting firm UxC for US trade association the Nuclear Energy Institute (NEI) said exports of nuclear energy equipment and technology to 2050 required to meet the needs projected by the Intergovernmental Panel on Climate Change (IPCC) could bring the USA $1.3-1.9 trillion. The Global Nuclear Market Assessment Based on IPCC Global Warming of 1.5°C Report, was commissioned to look at the global market opportunities that will arise assuming nuclear power plays an increasing role in mitigating climate change. US suppliers “will have numerous opportunities to expand their market presence, including in new reactor construction projects (large, small modular, and advanced designs), maintaining and fuelling the global fleet of reactors, as well as decommissioning ageing reactors,” UxC noted.

NEI said on 28 July that, according to the study, total capital expenditure globally between 2020 and 2050 for new reactors will be $5.88 trillion, and total expenditures, including for operations, will be $8.6 trillion by 2050. This is a modest part of the $67.7 trillion spent on all forms of energy by mid-century. UxC’s figures are based on the IPCC’s median estimate of what would be needed to hold warming to 1.5 degrees C, making assumptions about economic growth, electrification of transportation and industry, and other factors.

The projection is based on construction of 840 gigawatts of new nuclear electric capacity around the world, which is a little more than double the amount in service now. UxC concluded that, based on high confidence shutdown scenarios for existing reactors up to 2050, a total of roughly 640 GWe of new nuclear capacity must be built between 2020 and 2050 to achieve the 840 GWe in 2050 target.

UxC stressed the need to maintain as much of the current reactor fleet as possible to allow for adequate new builds to reach the ultimate long-term growth objective of 840 GWe by 2050. It said various actions must be taken to promote existing plant lifetime extensions, including:

  • Actions by power market system operators that provide consistent revenue streams for non-emitting, baseload generation, and that properly places nuclear plants into an emerging flexible power mix that is becoming more heavily reliant on intermittent, renewable power supplies.
  • Utility and supplier efforts to improve power plant operational performance through innovative new technologies.
  • Ongoing public awareness efforts to ensure public understanding that older facilities can continue operating safely and economically.
  • Reasonable regulatory mechanisms that ensure ongoing high safety levels at existing plants.
  • Government policies that value existing non-emitting NPPs to guarantee adequate financial rates of return and stable operating environments.
  • Efforts to reinvigorate the nuclear energy workforce as the current human resource base ages.

As long as these and other important measures are taken, UxC said the 840 GWe of nuclear capacity by 2050 target set out by the IPCC median pathway scenarios “is a lofty but achievable goal”. However, reaching 840 GWe by 2050 “will require the world to build new reactor capacity of roughly 640 GWe over the coming 30 years”.

“American companies are well on their way to being able to claim part of that market, but face stiff competition from foreign competitors, some of them supported by national governments. For example, Rosatom, a company heavily supported by the Russian government, has been highly successful in exporting its technology, partly because it offers one-stop shopping. It can supply the fuel and finance the projects,” said NEI.

UxC also considered the selection of reactor technologies to meet the growing nuclear capacity requirement noting that, while the near-term outlook is primarily centred on extended operation and new construction of large, traditional reactor types, the longer-term future is likely to see a transition to a mix of emerging new technologies, including small modular reactors (SMR), microreactors, and other advanced designs. It estimated that “the percentage of non-traditional reactor designs could reach upwards of 25% of the total market by 2050”.

As to market opportunities for the US, UxC noted that much of the new build money is being spent in Asia, Eastern Europe, and the Middle East, and that US suppliers have yet to make heavy in-roads into many of these markets. UxC considered the following to be the most promising future prospects driven by the IPCC target of 840 GWe in global nuclear capacity 2050:

  • Given the extensive US experience with extended reactor operations, US vendors have significant advantages to support similar lifetime extensions in markets across the globe especially as much of the global reactor fleet has its origins in US technology and suppliers.
  • Although most global new builds are expected to be based on large reactor technologies, there will also be a rapid expansion of the SMR/advanced reactor market. As long as US projects can be proven within the next decade, US vendors should be able to access a sizeable portion of the global SMR/advanced reactor market.
  • The operating reactor services market will expand rapidly as new units are added around the world. US suppliers active in engineering services, component supply, fuel cycle services, etc. will be able to access this market,
  • Finally, the rapidly growing nuclear decommissioning market will create significant new opportunities for US suppliers active in this area.

NEI noted that the USA has recently moved to finance some nuclear energy exports, which is a positive step. In Asia  reactors could produce more than half its electricity by 2050, the study found. Referring to UxC’s prediction that the mix of reactors will include SMRs. NEI commented: “That means that they would be built by highly-paid skilled labour in the USA, even if they were installed abroad., making them good export products.”  

It added: “Clearly, if the IPCC 2050 target is achieved, US nuclear vendors and related companies will see significant new sales opportunities throughout the world,” the study said. “The ability of U.S. nuclear suppliers to compete in global markets is important for the U.S. domestic economy, but also for American influence globally. Supplying a reactor provides a long-term commercial relationship between countries, which leads to closer political ties as well, NEI said. 

NEI concluded: “The market today is dominated by Russia and China, which are motivated by strategic interests to gain market share. To enable US companies to succeed, the US Government must enhance its export financing and ensure that new markets are open to U.S. supply. And with the global need to decarbonise electricity and other sectors, it is clear that the US has tremendous export opportunities that could help meet growing global demand for carbon-free energy, while reasserting our leadership in nuclear technology.”

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