Nuclear who?

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The “World Nuclear Industry Status Report 2023” overseen by French nuclear energy consultant Mycle Schneider shows that despite the significant global presence of the nuclear industry, which produced 2,545 TWh of energy last year, the sector is shrinking, with renewables looming large due to cheap costs and popularity.

Schneider told pv magazine that as costs between solar and nuclear continue to widen PV continues to come out on top.

“In the longer term, soft costs determine solar electricity prices and their key factor is the density of installations,” he said.

“This is no doubt the main reason why China was able to add over two-thirds of its gigantic 85 GW 2022 solar additions as decentralized, mainly rooftop, installations, systematically implementing programs through entire counties thus super high density of projects.”

Diverging LCOEs

Schneider said the levelized cost of electricity (LCOE) for solar and wind projects is lower than nuclear. He cited 2022 data collected by US-based Lazard showing the LCOE for combined solar and wind can be $45–130/MWh which is well below nuclear’s estimated mean of $180/MWh.

Schneider said there has only been one nuclear reactor construction license awarded in the United States, given to the NuScale with Utah Associated Municipal Power Systems (UAMPS), but operations were terminated in November as the project “did not identify enough subscribers for the projected power output at the projected price.”

“Estimated construction costs, long before construction starts, as the design has not been certified yet by the safety authorities hit $20,000/kW, which is about twice the cost estimate of the most expensive European pressurized reactors (EPRs) in Europe,” he said.

Schneider said fourth-generation reactors, described as “PowerPoint Reactors”, would not be able to compete with renewables as they “hardly exist on the drawing board” and have not been certified by licensing authorities.

“How can we discuss potential competitiveness if there is no design, no existing fuel chain, no safety analysis?” he said. “However, these ideas are decades away from implementation at any scale if ever. Many of these conceptual ideas, like fast neutron reactors or molten salt reactors, have been talked about for decades. The probability that they will ever exist is shrinking with the widening cost gap of existing designs with renewables.”

New reactors

Schneider said renewable energy and nuclear energy will never be complementary energy sources. He used Olkiluoto-3, the first European enterprise resource planning project, as an example. The nuclear facility had “hardly” started commercial operations in April 2023 when its output was reduced in May due to unprofitable wholesale market energy prices. It could not compete with the flexibility of renewables, Schneider said.

“Increasing penetration of variable renewables like wind and solar need fine-tuned, flexible, complementary elements like demand-response, storage, efficiency, sufficiency, hydro, and biomass,” he said. “Nuclear power needs to run as many hours as possible to amortize the huge upfront investment.”

Schneider said wind and solar technologies work well together and can produce a large chunk of the energy grid's base load. Not only this, he said, but they also “eat” into nuclear's profitability. “There are many systemic characteristics that clearly illustrate that not only are renewables and nuclear not complementary but they are increasingly contradictory as renewables increase their share,” Schneider said.

What is in the “World Nuclear Industry Status Report 2023”

The report states that renewable technologies – consisting of solar, hydropower, and wind – are the main area of “optimism” for energy security. “Nuclear power remains, at best marginal and all too often irrelevant to the challenges ahead,” the document reads.

The report also states last year and this year were pivotal for examining and improving the international energy sector. Insecurities exposed by the Ukraine war and the climate emergency forced countries to develop new industrial and economic strategies to strengthen domestic supply chains and manufacturing.

As a result, solar’s total installed capacity at the end of 2022 reached 1,047 GW. The industry increased its annual production at an “unprecedented” speed, with an annual production of 1,309 TW/h. In more than a decade the LCOE for utility-scale solar projects has decreased by 83% but rose by 47% for nuclear, meaning that nuclear power is “the most expensive generator.”

“Aside from natural gas peaking plants at discount rates of less than 5.4 percent, nuclear turned out always the most expensive resource on an LCOE basis,” the analysts said. “The growth of renewable energy is now not only outcompeting nuclear power but is rapidly overtaking fossil fuels and has become the source of economic choice for new generation.”

Nuclear fleet

Global energy power generation for nuclear dropped by 4% last year, according to the report. This is despite a net addition of 4.3 GW in operating nuclear power capacity and four reactors being decommissioned.

As of the end of June, however, 58 new reactors were under construction, which is five more reactors than last year, the document states. The share of the nuclear global commercial gross electricity generation fell to 9%, which, according to the report authors, is the largest dip since 2012 – the year following the major Fukushima nuclear accident.

“At the end of 2022, the nominal net nuclear electricity generating capacity had peaked at 368 GW, two having added 5.3 GW during the year, 1 GW more than the previous 2006 record of 367 GW, but it dropped again to 364.9 GW by mid-2023,” the authors of the report stressed.

They also explained that at the end of June, 407 operational reactors in 32 countries produced 365 GW. This is less than the 413 GW of installed solar capacity expected to be reached by the end of 2023, according to forecasts provided by New York-based research firm BloombergNEF.

Construction time

Reactor construction times now average six years, which is a drop since last year, the report states. Despite the expedited process, however, other challenges loom, such as year-long delays, “lengthy” licensing procedures, complex financing negotiations and site preparations.

China is developing the most new nuclear facilities, clocking in 39 from 2012 to 2021. The country also deployed the only SMRs in 2023: the twin-High Temperature Gas Cooled Reactor units, according to the report. But the authors write they were subject to a “historical pattern of cost escalations and time overruns,” meaning it will be “less likely” for SMRs to be commercialized in the future

“Despite optimistic numerical targets for expansion, the proposed role for nuclear power in a decarbonized world faces continued competitive pressures on both cost and technical capabilities,” according to the report.

“This includes the economics of operating reactors and the funding of new ones.”

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