Last week, the Nuclear Energy Institute (NEI), which is the U.S. nuclear industry’s premiere trade association, released key findings from a report prepared by UxC for NEI on the implications for nuclear power of the United Nations’ Intergovernmental Panel on Climate Change (IPCC) report from October 2018 that detailed various potential pathways to limit global warming to 1.5°C by 2050. We used the IPCC report as the basis for our analysis to establish global and regional nuclear capacity outlooks over the period to 2050. UxC also examined the types of reactor technologies that could be deployed over the next 30 years to keep global temperatures at no higher than 1.5°C above pre-industrial levels. In addition, UxC extrapolated the resulting potential global nuclear market size and interpreted what this means in terms of export opportunities for U.S. nuclear suppliers based on these projections.
The first and most important conclusion from our study is that the IPCC report suggests median scenario results as outlined in the 1.5°C pathways that imply nuclear capacity targets for 2050 in the range of 820-855 GWe. Thus, UxC determined that the IPCC report indicates an average nuclear capacity of 840 GWe in 2050 as the most effective means to mitigate the worst effects of global warming and climate change. Considering that current operable global nuclear capacity as of August 2020 is around 400 GWe (gross), achieving the IPCC 2050 target will require more than doubling nuclear power over the coming 30 years.
Achieving the 2050 growth target of 840 GWe will require major efforts, not least because we estimate that at least 200 GWe of current capacity will be lost by then. Thus, a net total of around 640 GWe of new reactor capacity must be built over the coming 30 years to attain the IPCC’s lofty goal. Still, when considering the time horizon, the expansion to 840 GWe by 2050 actually equates to a reasonable compound annual growth rate (CAGR) of 2.5% globally. Still, we expect that certain regions will see much faster growth as seen in the chart on the right. Notably, our outlook under the IPCC scenarios suggests a CAGR for Africa/Mideast of 10.6%, South America at 4.6%, and Asia/Oceania at 4.3%. All regions expand nuclear capacities, except for Western Europe – which holds steady – but the largest capacity growth is in Asia/Oceania, where we foresee 300 GWe added.
Building hundreds of reactors would have huge implications for the world, including an estimated $8.6 trillion in global spending (in 2020 US dollars) from both capital costs for construction as well as the growth in the market for fuel and services to support such a large fleet of reactors. NEI specifically asked UxC to analyze the potential ramifications for the U.S. nuclear industry, and our study shows that U.S. suppliers and related firms could capture between 15% and 22% of the world market, equating to $1.3-$1.9 trillion over the coming 30 years.
While our study did not explicitly analyze the impact on the global nuclear fuel markets, we can easily extrapolate from our analysis and deduce that uranium demand, for example, would rapidly expand if the IPCC 2050 scenario is realized. Given that global uranium demand is currently around 180 million pounds U3O8, an increase to 840 GWe capacity would likely result in uranium demand growing to at least 375 million pounds U3O8 in 2050. We would also likely see similar rates of increase in requirements for UF6, SWU, and fabricated assemblies, although some shift away from the currently dominant light water reactor fuel cycle could occur as we expect such a rapid expansion in nuclear power would spur development of new reactor technologies, including small modular and other advanced reactor designs.
There are several other important conclusions contained in our study for NEI, and we encourage our readers to download it for themselves and distribute it to any other potentially interested parties. Clearly, anyone focused on the challenges the world faces from climate change should read this report to gain a better appreciation for nuclear energy’s obvious role in limiting the increase of global temperatures.
UxC hopes this report helps to highlight the clear benefits of nuclear power for the world and the key message that it is not only possible, but also imperative for the world to transition to a climate-friendly system that incorporates nuclear energy as one of the main pillars of a future clean energy framework. While nuclear energy is certainly not the only piece of the puzzle to solving the global energy-environment paradox, the IPCC report instructs us that there is strong consensus around the world that achieving the goal of keeping the world’s average temperature from rising more than 1.5°C from pre-industrial levels by 2050 requires significant investment and political will to expand nuclear power capacity by more than double the current level.
The full UxC report can be accessed at: https://www.nei.org/resources/reports-briefs/uxc-global-nuclear-market-assessment-report
Jonathan Hinze is President of UxC, LLC. He has been at UxC since 2006, during which time he has helped to expand the company’s products and consulting work in numerous ways. Mr. Hinze has nearly two decades of direct experience in the nuclear industry, and therefore has an extensive wealth of knowledge on the nuclear fuel cycle and reactor markets. One of his main areas of focus over the years has been nuclear reactor developments and global nuclear power forecasting as well as analyzing the future of the nuclear fuel markets and the reactor supply chain. His areas of expertise include an in-depth knowledge of the international nuclear marketplace, nuclear technologies, government policies, nonproliferation, and the strong interplay between all these forces on a domestic and international level. Mr. Hinze received a Bachelor of Arts in East Asian Studies from Haverford College and a Master of Arts in International Trade and Investment Policy from the George Washington University.