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The Role Of Nuclear Power In A Clean Energy System

Jun. 12, 2020 12:35 PM ETNLR, URA, UXA:COM2 Comments
MassifCapital profile picture


  • Nuclear power has historically been the most critical source of zero-carbon emission electricity globally.
  • Policies in the developed world appear likely to result in the marginalization of nuclear power.
  • A fade in nuclear power will likely produce an increase in the importance of natural gas in power markets.
  • & Increase in the cost of electricity to consumers which may impact economic growth.
  • & Increase in the cost and timeliness of addressing climate change;

Nuclear power is the most widespread source of zero-carbon emission electricity in the world. It accounts for roughly 10% of the world's electricity and 2,000 terawatt-hours of zero carbon emission electricity in advanced economies, or approximately 70% more carbon-free electricity then wind and solar generate combined. As such, Nuclear is not only important in the current power grid but also critically important to a timely transition to a low-carbon economy.

Despite its status, policymakers in Europe, Japan, and North America (home to the vast majority of the global nuclear fleet and most mature electricity markets) have turned sour on the technology. Since the 1980s, the developed world has largely abandoned efforts to grow the reactor fleet despite the increasing need for reducing emissions from the power sector.

The prospects for new nuclear plants globally are grim. The one exception is China, where nuclear power is seen as a critical source of electricity for the future. In the world's advanced economies, some policymakers have decided to prohibit investment in new projects, others to phase out existing capacity in a progressive manner, but few, if any, envisage a long-term role for nuclear power in their energy systems.

A 2019 IEA study finds that if nuclear power only serves as a bridging fuel, addressing climate change becomes increasingly difficult and increasingly expensive. It is possible, but it makes a challenging problem more difficult. The study looks at the impact of fading nuclear power in the context of two potential low carbon energy pathways aimed at holding the increase in the global average temperatures to below 2C.

In this context, nuclear fade is defined as a forward-looking scenario in which no new nuclear power capacity is built beyond projects already under construction, no further life of plant extensions is granted, and no new investment in existing plants

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MassifCapital profile picture
Massif Capital is a value-oriented investment partnership focused on global opportunities in energy, basic materials and industrials. We invest principally in businesses with long lived assets that generate predictable cash flows that require not only capital allocation acumen from management but a keen focus on operational excellence. Our investment practice is primarily concerned with the nature of risk and value as it relates to protecting, enhancing and deploying the irreplaceable capital of our investors into a concentrated portfolio of economically productive assets.

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Comments (2)

The public lost confidence in nuclear power, not because it's a failed technology, but because it's been badly managed. Investors and ratepayers were burned, whistleblowers mistreated and silenced, safety flaws were covered up, there were several high-profile accidents. And there's the ever-present problem of what to do with nuclear waste. If nuclear is to have a future, the industry must regain public trust by cleaning up its act.
ngtenor profile picture
@NeedMoreCoffee agreed on all points, but I do believe that the current fleet of PWRs are an appalling failure in terms of cost and efficiency. The reason that we have so much waste piling up at these reactors is that they can only burn 2% of the energy inside each fuel pellet, primarily for safety reasons. Dangerous fission gasses build up inside each pellet as it burns, and if you burn too much, it can crack and release the gas.

There's enough energy stored in the unburnt fuel currently discarded as 'waste' to power the entire planet for decades. This is the opportunity that companies like Moltex Energy will exploit with the next generation of reactors. Moltex's design deals with the waste issue by burning all of the fuel, the waste from which is safe after 200 years.

Nuclear will make a big comeback in the next decade.
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