IAEA projects growth for nuclear due to climate and energy security needs; IEA projects same

In “Energy, Electricity, and Nuclear Power Estimates for the Period up to 2050,” the IAEA revised its annual projections of the potential growth of nuclear power during the coming decades, increasing it’s “high” case scenario by 10% compared to last year’s report.  The new estimate more than doubles the projected world nuclear generating capacity to 873 GWe, compared with current levels of around 390 GWe.  In the “low” case scenario evaluated by the IAEA in the report, the nuclear generating capacity essentially remains flat.

The IAEA Report follows up on the projections of nuclear power capacity for electricity generation that the IAEA published in September 2021. The 2021 projections were the first time the IAEA revised its annual energy and electricity projections for nuclear power since Japan’s Fukushima Daiichi nuclear accident in 2011.

The Report underscores that recent events such as the geopolitical tensions and military conflict in Europe have “impacted the reliability of energy systems, impeded energy flows across regions and led to significant increases in energy prices.”  See IAEA Report at 2.  The evolving energy landscape, with strong commitment to climate action and renewed scrutiny of energy supply security, contribute to government announcements of a larger role for nuclear energy in their energy and climate strategies, leading to the notable upward revision by about 10% compared with the 2021 edition of the published projections. Additionally, a number of IAEA Member States have revised their national energy policy, leading to support for the long-term operation of existing reactors, new construction of next generation reactors, including the development and deployment of small modular reactors.  See IAEA Report at 3.

Complementing the IAEA’s Report on energy and electricity projections, also this month the International Energy Agency (“IEA”)  issued a report that outlined how governments and companies can work together to deploy clean energy technologies in high-emitting sectors like power, agriculture, road transport and steel.  The IEA Report projects that nuclear generating capacity will increase by 40% by 2030 in order to support the world’s climate reductions goals. 

We go through the IAEA findings in more detail below, and also address the IEA findings in some detail as well.

About the Projections in the IAEA Report

The IAEA Report presents global and regional nuclear power projections as “low” and “high” cases, generally encompassing the uncertainties inherent in projecting trends. Specifically, the projections are based on a critical review of (i) the global and regional energy, electricity and nuclear power projections made by other international organizations, (ii) national projections supplied by individual countries for a 2020 joint OECD Nuclear Energy Agency and IAEA study, and (iii) estimates of the expert group participating in an annual IAEA consultancy meeting.  See IAEA Report at 1.

The assumptions of the low case are that current market, technology and resource trends continue and there are few additional changes in explicit laws, policies and regulations affecting nuclear power. This case was designed to produce a “conservative but plausible.” The high case projections are “much more ambitious but still plausible and technically feasible,” and also consider country policies on climate change.

According to the IAEA Report, the low and high estimates reflect contrasting, but not extreme, underlying assumptions about the different driving factors that have an impact on nuclear power deployment. See IAEA Report at 3.  These factors, and the way they might evolve, vary from country to country. The estimates presented provide a plausible range of nuclear capacity development by region and worldwide, and are not intended to be predictive or to reflect the whole range of possible futures from the lowest to the highest feasible. In both cases, the same outlook of economic and electricity demand growth based on current expectations is assumed.  Ultimately, according to the IAEA Report, the IAEA increased its “high case” scenario by 10% compared with last year’s report for the projected global nuclear capacity for electricity generation by 2050.  See IAEA Report at 3.

In addition to the two case scenarios, the IAEA Report is organized by world and regional subsections and starts with a summary of the status of nuclear power in IAEA Member States as of the end of 2021 based on the latest statistical data collected by the IAEA’s Power Reactor Information System.  Following the status of nuclear power in the IAEA Member States, the IAEA Report presents global and regional projections for energy and electricity up to 2050 derived from two international studies: 1) the International Energy Agency’s  World Energy Outlook 2021 and 2) the United States Energy Information Administration’s International Energy Outlook 2021.

Below we highlight some of the key findings on nuclear capacity projections in more detail.

General IAEA Report Takeaways

By 2050 global energy consumption is projected to increase by about 30% and electricity production is expected to double.  Today, nuclear contributes about 10% of global electricity production.  According to the 2022 Report, the use of nuclear power “has avoided about 70 gigatonnes of CO2 emissions over the past 50 years.” See IAEA Report at 3.

Relative to a global nuclear electrical generating capacity of 390 GWe in 2021, the low case projections indicate that world nuclear capacity will remain essentially the same, at 404 GWe. In the high case, world nuclear capacity is expected to more than double to 873 GWe by 2050.  See IAEA Report at 3.

The IAEA Report cites the IEA’s World Energy Model Report from 2021 stating that almost half of the carbon emission reductions needed to reach net-zero in 2050 must come from technologies that are currently under development and not yet on the market. See IAEA Report at 3. For nuclear, accelerating the pace of innovation and demonstration of advanced nuclear reactors including SMRs is critical if nuclear is to play a role in decarbonization beyond electricity e.g., providing low carbon heat or hydrogen to the industrial and transport sectors. See IAEA Report at 4.

Summary of the IAEA Report’s Global and North American Projections

Global Projections:

• Overview of Nuclear Power Developments in 2021 (IAEA Report at 9)
• As of the end of 2021, there were 437 operational nuclear power reactors, with a total net installed power capacity of about 390 GWe. Another 56 reactors with a total capacity of 58.1 GWe were under construction.
• Six new nuclear power reactors with a total capacity of about 5.2 GWe were connected to the grid, and ten reactors with a capacity of about 8.7 GWe were retired. Construction began on ten new reactors that are expected to add a total capacity of another 8.8 GWe.
• Nuclear power accounted for 9.8% of total electricity production in 2021, a decrease of 0.4% from the previous year.

• Electricity and Overall Nuclear Generating Capacity Projections (IAEA Report at 18, 22)
• High.  In the high case, nuclear electricity capacity is expected to increase by about 23% by 2030 and double by 2050 (increasing from about 390 GWe now to about 873 GWe in 2050). 
• Low.  In the low case, nuclear electrical generating capacity is expected to stay relatively flat—more specifically, it is projected to decline by about 2% by 2030 and then increase by about 3.5% by 2050.

• Reactor Retirements and Additional Capacity (IAEA Report at 20)
• 2/3 of operating reactors have been in service for more than 30 years. A number are scheduled for retirement in the foreseeable future.
• High. In the high case, it is assumed that the operating life of several nuclear power reactors scheduled for retirement will be extended such that only about 8% of the 2021 nuclear electrical generating capacity is retired by 2030. This is expected to result in net capacity additions (newly installed less retired) of about 90 GWe by 2030 and more than 390 GWe over the subsequent 20 years.
• Low. In the low case, it is assumed that about 18% of existing nuclear power reactors will be retired by 2030, while new reactors will add about 60 GWe of capacity. Between 2030 and 2050 it is expected that capacity additions of new reactors will slightly exceed retirements.

North America Projections:

• Overall Nuclear Electricity Capacity (IAEA Report at 32).
• The total generating capacity for electricity is projected to increase by almost 5% by 2030 and by about 40% by 2050.
• High. In the high case, nuclear generating capacity is projected to remain roughly constant until 2040, with an increase of about 14% by 2050.
• Low. In the low case, nuclear electrical generating capacity is projected to decrease by about 20% from current levels by 2030 and to be around one third of current capacity by 2050.

• Reactor Retirements/Additions (IAEA Report at 34).
• High. Between 2030 and 2050 it is expected that capacity additions of new reactors will exceed retirements by 14 GWe.
• Low. In the low case, about 20% of nuclear power reactors will be retired by 2030, with no reactor additions. Between 2030 and 2050 it is expected that significantly more capacity will be retired than is added, resulting in a net reduction in capacity of almost 50 GWe.

International Energy Agency Breakthrough Agenda Report

The IEA “Breakthrough Agenda Report,” also issued this month, similarly projects a significant increase in nuclear generating capacity, including a 40% increase by 2030.  IEA Report at 33.  Note – this prediction is relatively consistent – by comparison, the IAEA projected global nuclear generating capacity to increase by 23% by 2030, and then double by 2050.  IAEA Report at 18.

The IEA Report, prepared in partnership with the International Renewable Energy Agency and the U.N. Climate Change High-Level Champions, calls out the electricity sector as a severe global emitter, and an area where greenhouse gas emissions continue to rise, partly due to coal power's resurgence.  According to IEA analysis, coal plants generated a record amount of power in 2021, making up 36 percent of global electricity, while the fuel’s emissions climbed by a record 6.6 percent. The IEA Report also noted that international governments are not collaborating as needed to create welcoming markets for emerging technologies. See IEA Report at 102, 113, 119. 

The IEA Report also noted as a key takeaway for the power sector that “the pace and scale of decarbonization must increase urgently, driving emissions from the power sector down by more than 7% each year to 2030. This requires the deployment of readily available low-carbon technologies, coupled with the rapid phase out of polluting fuels, particularly coal.”  IEA Report at 29.  The Report also projected the increase of nuclear capacity if the world is going to meet its climate coals, including a 40% increase in nuclear capacity by 2030.  IEA Report at 33.  It further noted that nuclear is likely to play a key role in making the energy transition faster and more secure.  IEA Report at 33.  There is currently 413 GW of nuclear capacity operating.

The IEA report stated that nuclear is in 32 countries, with 70% of this capacity located in advanced economies. This is set to change, with stronger growth for nuclear power planned in emerging market and developing economies. Of the nearly 60 GW of nuclear capacity under construction, over 80% is located in emerging markets or developing countries.  IEA Report at 34.  The IEA also referenced its recently issued report, “Nuclear Power and Secure Energy Transitions” (June 2022), which we previously blogged about here.

For more information on the IAEA Report, the IEA Report, and projections of nuclear growth, contact Amy Roma, Partner, or Stephanie Fishman, Associate.