Facts and Trends NUCLEAR

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1 Facts and Trends NUCLEAR CONTEXT Nuclear energy was rapidly developed for civil use during the 1960s, with a slowdown following the accidents of Chernobyl and Three Mile Island. Nuclear had a 17% share in world power generation in It provides the majority of electricity in France and is also widely used in other countries such as the USA, the UK, Sweden, Finland, China and Japan. While some major developing countries (China, India) have confirmed their willingness to build nuclear plants on a wide scale, the issues of rising energy demand, supply security and climate change have led to a new debate over the future role of nuclear in several developed countries (the USA with the 2005 Energy Bill, the UK, Italy, Poland). Relatively expensive to build but cheap to operate, nuclear can be competitive with coal or gas-fired generation in some countries, even without including any considerations of paying the costs of release. There is sufficient uranium most of it located in non-sensitive regions to build and operate more than four times the number of nuclear plants currently in use. The uranium resource lifetime could be extended by approximately 15% through reprocessing spent fuel to make mixed oxides (MOX) and by up to a factor of 50 by using fast breeder reactors (there would then be enough resources to operate 225 times the current nuclear fleet). Virtually all the wastes it produces are contained and managed, and nuclear power does not cause any emissions during operation. Today, the vast majority of nuclear power is based on Generation II light water reactors. New plants to 2040 are likely to be Generation III light water reactors, incorporating many improvements, particularly safety and economic performance. From Generation IV fast breeders could come online. ISSUES 90% of waste produced by nuclear power has low radioactivity and is disposed of in shallow storage sites. Public concern has concentrated on the 10% high level waste (HLW). Part of this is highly radioactive and will remain so for a few hundred years. The remainder has a low radioactivity level but will remain so for some tens of thousands of years. This HLW can be vitrified, which allows safe storage over a very long period. Fuel reprocessing can substantially reduce waste volume. Final disposal of HLW is regulated by governments, not by the industry. Most national authorities plan to dispose of HLW from nuclear power generation in deep, stable geological formations. Nuclear also faces challenges in public acceptance because of lack of transparency in the past. Safety has always been a very high priority in nuclear reactor design, engineering and operation. About one-third of the capital cost of a typical reactor arises from safety systems and structures; and the safety record of nuclear energy is better than for any other major industrial technology in countries.

2 THE WAY FORWARD The possibility that nuclear power could be Mtoe a major component of the hydrocarbonfree generation required to address climate challenges has been fully recognized by the International Energy Agency (IEA) in its 2006 Accelerated Technology (ACT) scenarios. These build on the opportunities delivered by existing and emerging technologies to define an energy future meeting those challenges. World nuclear energy use by scenario, Baseline 2030 (WEO 2005) Baseline 2050 Map ACT scenarios Low Nuclear Low Renewables No CCS Experience tells us that nuclear power can be a safe and economic means of generation, ensuring security of supply and enjoying public acceptance, if it is supported by a competent and credible safety authority, clear and coherent industrial organization allows for standardization and the associated economies of scale. Low Efficiency TECH Plus 2050 Source: International Energy Agency (IEA). Energy Technology Perspectives license design and siting procedures, and if Ensuring public acceptance through stakeholder participation in structuring choices is key, in particular with regard to legitimate concerns about waste management and the safety and security of installations. Governments of countries that master nuclear technologies and envisage using nuclear power in the decades to come must take the steps required to do so effectively. In countries with successful past experience, maintaining the existing nuclear regulatory framework and allowing utilities to use viable industrial models (diversified business portfolio, long-term contracts with customers, risksharing industrial consortia) should be sufficient. In countries with less successful experience, governments should ensure that all success conditions previously mentioned are met and might also consider giving investors initial financial incentives and/or accept some risk transfers. R&D programs that prepare for the future, i.e., that pertain to Generation IV reactors, must be pursued as public-private partnerships and real collaborative research. They must be managed at the global level to cover all options with reasonable redundancies and develop world reactor standards at least cost. Various initiatives have been taken recently to develop regional or international partnerships on fuel cycle management. They should be supported since such partnerships would allow all countries wishing to use nuclear power peacefully to take the advantage of an optimized and secure fuel cycle, including fuel reprocessing. FACTS AND TRENDS NUCLEAR Powering a Sustainable Future (October 2006)

3 Facts and Trends NON-HYDRO RENEWABLES (IN ELECTRICITY GENERATION) CONTEXT Renewables other than hydro generated nearly 2% of the world s electricity in Biomass generated more than half of this, with geothermal and wind generating the vast majority of the remainder. Renewables currently have a larger role as sources of direct energy (e.g., biodiesel, solar water heating), where they are more competitive and convenient. The International Energy Agency (IEA) projects that non-hydro renewables will account for 6% of power generation in Other scenarios and commentators advocate much higher renewables shares; sufficient financial and policy support could lead to a generation share of over 10% in It is unlikely that any policy scenario could raise the share as high as 20% by Currently, growth in new renewables is driven by government policy and support schemes (e.g., feed-in tariff support, quotas and tax incentives). Renewable energy policies varywidely between and even within countries, as well as over time. The renewable resources are vast and could cover existing electricity demand many times over. ISSUES Only a fraction of the resources are economically accessible with today stechnologies; reasonable costs, sufficient surface areas and practical proximity to transmission and/or load centers are required, which all vary on a local basis. Shares of non-hydro renewables in power generation in 2002 and 2030 Percent (%) World Europe North Pacific Latin China South Transition Economies Source: International Energy Agency. World Energy Outlook Africa Middle Other renewables tend to be capital intensive but have low operating costs with low volatility. Their lifetime can be long. In general, wind and solar photovoltaic power are more expensive per unit of electricity generated than conventional technologies. Cost improvements will depend on technological innovations, which benefit from increasing scale of deployment, particularly with newer technologies such as solar photovoltaics. On the other hand, increasing scale also means that some resources may become more costly to access. This applies especially to wind power, where many of the most economic onshore sites have already been developed.

4 Electricity-generating costs of renewable energy technologies, 2002 and 2030 Intermittency of wind power Dollars (2000) per MWh Wind onshore Cost range in 2002 Cost range in 2030 Wind offshore Hydro Geothermal Biomass Solar thermal Tide/ wave Solar PV Wind power feed-in as % of peak grid load (%) E.ON control area (Germany), Source: International Energy Agency. World Energy Outlook Jan Feb Mar April May June July Aug Sept Oct Nov Dec Source: E.ON Netz. Wind Report Many renewables (e.g., wind and solar) are intermittent. On-grid, hydro reservoirs and reserve plants can compensate for intermittency; off-grid, batteries can fill this function, but they are expensive. Large-scale use of intermittent generation would require investment in more capacity for transmission, storage, and/or back-up generation. Renewables offer undisputed environmental benefits. Life-cycle GHG emissions per unit of electricity generation are a fraction of those from fossil fuels. Local pollution is zero or low;other impacts principally relate to the large areas needed for resource recovery and the visual and other impacts of facilities in attractive natural areas. THE WAY FORWARD The skills required to develop and maintain renewables are still emerging in less developed areas, and will be necessary to support wider implementation. R&D activities involve improving resource mapping, the development of both existing and novel technologies, and the continued development of lower cost batteries for electricity storage on- and off-grid. The prospects for other renewables also depend on the levels of carbon constraints agreed, on legislation and regulation, on fossil fuel prices and on how capital costs change relative to those from other technologies. They could become significantly more competitive as external costs of environmental and other impacts of other resources are taken into account through new policies and other measures. FACTS AND TRENDS NON-HYDRO RENEWABLES Powering a Sustainable Future (October 2006)

5 Percent (%) Facts and Trends HYDRO CONTEXT Hydropower is a major renewable energy source, responsible for 89% of the world s renewable electricity production in Hydro s share was 16% of worldwide electricity generation in 2002, with 801 gigawatts (GW) of installed hydro capacity worldwide generating some 2,610 terrawatt-hours (TWh) of electricity. The International Energy Agency (IEA) projects that hydro capacity will increase by 63% between New hydro plants will continue to be built, but not at a high enough rate to maintain the current share of electricity generation; this is projected to fall to 13% by Share of electricity generation: Hydro It is estimated that two-thirds of the world s economically feasible potential is still to be exploited and is mainly concentrated in developing countries in Africa, and South. China has used only one-quarter (115 GW in 2005) of its huge potential of 450 GW. It is the main contributor to hydro development today and government figures suggest that it will add more than 12 GW of new capacity each year until 2020 to reach 300 GW. ISSUES Hydropower is the main function of only about 10% of dams, the rest being used primarily for irrigation or other purposes. The development of large hydropower is almost always part of larger water management schemes (other services are primarily flood control, irrigation, access to drinking water and tourism) World European Union North Transition China Pacific Economies South Latin Source: International Energy Agency. World Energy Outlook Africa Middle Hydro schemes often have major positive impacts on social and economic local development in areas with water resources but with inadequate or no access to basic needs such as electricity. Attention has recently focused on environmental and social issues, particularly the resettlement of people due to the construction of large reservoirs. By following available guidelines (for example, those of the International Hydro Association), large schemes can be developed with mitigated and acceptable impacts.

6 One constraint on development is the geographical separation between potential supply and demand, which involves the development of costly infrastructure (long transmission lines, roads, etc.). GHG emissions from reservoirs in tropical areas can be significant, due to emissions of methane from biomass contained in the reservoir. However, overall emissions are significantly below those of fossil fuels. Studies for northern countries show that emissions are 100 times lower than for coal. THE WAY FORWARD The development prospects of hydro in developing countries are encouraging and should be supported by international financial institutions and technological know-how from developed countries. Dam uses by continent O 15% DW 10% H 11% I 11% N&C FC 13% MP 40% Flood control (FC) Multi-purpose (MP) DW 20% H 6% Africa O FC 2% 1% I 50% Irrigation (I) Other (O) DW H FC MP 2% 7% 2% 21% MP 20% I 63% Hydropower (H) Drinking water (DW) Source: International Commission On Large Dams (ICOLD) Developed countries are now beginning to focus on rehabilitation and upgrading (increasing capacity and/or generation, optimization, and safety) programs. Few such schemes have been developed to date but can offer significant improvements. In some countries, proposed upgrading schemes for one large hydro plant offer an increase in renewable generation of the same order as the generation from all other (non-hydro) renewables. Hydro scheme impacts can be both positive and negative and are not fixed by purely technical factors; good governance is key. Stakeholder participation and public/private partnerships are important to properly develop hydro projects and to optimize and share the costs and benefits of multi-purpose projects. The development of hydro schemes is almost always sustainable and will thus yield projects under the Kyoto Protocol s Clean Development Mechanism (CDM). The first carbon credits (CERs) issued under the CDM (October 2005) were for small-scale hydro plants in Central. Now, efforts are being made to obtain CERs for larger hydro projects worldwide. Many studies and measurements are assessing the net impact of reservoirs on greenhouse gas emissions. R&D for hydro projects is mainly focused on environmental aspects such as improvement of turbine design for reducing fish mortality or development of new lubricating systems which have no risk of leakage, do not use any oils or use green oil to avoid water pollution in case of leakage. FACTS AND TRENDS HYDRO Powering a Sustainable Future (October 2006)

7 Facts and Trends HYDROGEN CONTEXT Like electricity, hydrogen is but a carrier of energy, not a source of primary energy. Generally, hydrogen would most likely complement electricity. For some uses, for example, in transport, the two carriers could compete with each other. Hydrogen can be produced, as electricity is, from a wide range of primary energy, including fossil fuels, renewables and nuclear. It could also be produced from electricity, although the efficiency of the electrolysis of water is prohibitively low with current technologies. Hydrogen energy options ISSUES At the point of use, hydrogen produces no. It emits only water vapor when used by fuel cells. In common with all combustion processes, burning hydrogen also produces NOx. Electricity produces no, water or NOx at the point of use. Today, hydrogen is produced mainly from natural gas without carbon capture and storage (CCS), raising issues of resource depletion, emissions and security of supply, similar to other fossil fuels. In the future, production of hydrogen from renewables (e.g., solar photochemical cells), high temperature nuclear reactors, or coal with CCS could be a sustainable solution but will not be attainable on a wide scale before 2020 for coal and 2040 for other sources. The cost of hydrogen infrastructure remains very high. The challenge is to manufacture and use itcost-effectively and safely (hydrogen gas is explosive), taking care that the resultant impacts are acceptable. Hydrogen is more difficult to transport and store than fuels that are liquid or solid at room temperature.

8 THE WAY FORWARD According to the International Energy Agency s (IEA) Energy Technology Perspectives 2006, hydrogen will provide 6% of 2050 demand for liquid fuel and hydrogen in the TECH Plus scenario. This scenario is much more optimistic about the progress for new energy technologies than the other cases. Hydrogen could be a long-term solution beyond 2050, as a complementary energy carrier to electricity, if cost-effective production, transportation and enduse technologies can be developed. World liquid fuel supply by scenario, Mtoe Hydrogen Biofuels Synfuels Oil 2003 Baseline 2030 (WEO 2005) Baseline 2050 ACT Map 2050 TECH Plus 2050 Source: International Energy Agency (IEA). Energy Technology Perspectives Large scale production of electricity from hydrogen could be realized by the gasification of coal, with CCS used to capture. The hydrogen produced could either be burned by gas turbines or electro-chemically reacted by high temperature fuel cells (e.g., solid oxide fuel cells). A future carbon-free transportation system will have to involve at least one or all three end-use energy carriers that are zero-carbon: electricity, hydrogen, and/or bio-fuels. Vehicles are likely to provide the first new, large-scale demand for hydrogen. Reducing the adverse impacts from conventional fuel use in the transport sector is a priority. There are major challenges in mass producing the hydrogen, delivering and storing it and converting it into motive power (using either proton exchange membrane fuel cells or internal combustion engines). The use of hydrogen from low-carbon or zero-carbon sources in fuel-cell vehicles could practically decarbonize the transport sector in the long run. But a switch to hydrogen will require huge infrastructure investments. Although recent advances in hydrogen fuel-cell technologies have been impressive, they are still expensive. Hydrogen is an easier energy carrier to store than electricity, however future development of new batteries and other electricity storage technologies may overcome this weakness of electricity. The efficiency of the whole supply chain is a basic issue. Hydrogen will only develop if it is better than the alternative carriers; for example, in transport, if an improved battery is developed hydrogen will not be competitive. FACTS AND TRENDS HYDROGEN Powering a Sustainable Future (October 2006)

9 Facts and Trends CARBON CAPTURE AND STORAGE (CCS) CONTEXT 40% of current global emissions from fossil fuel combustion are from power plants. The demand for cheap, reliable electricity means fossil fuels share in the generating mix will increase to over 70% by 2030 according to International Energy Agency (IEA) projections. Operating fossil fuel plants more efficiently, switching to -free technologies such as nuclear and renewables, or reducing demand for electricity can reduce power sector emissions. Capturing the and storing it using CCS techniques offers a fourth option that may have great potential. It would also enable mid to longer term use of fossil fuels, and could offer a bridging technology to more sustainable electricity generation. Several technological avenues for CCS are currently being explored. For power generation, these include pre-combustion, post-combustion and oxyfuel combustion. Technology options for CCS Post-combustion Pre-combustion Oxyfuel Coal Biomass Industrial processes Coal Gas Biomass Gasification Gas, Oil Air Coal Gas Biomass Coal Gas Biomass Air/O 2 Steam Air Air/O 2 Power & Heat Reformer + Sep. H 2 Air Power & Heat O 2 Air Separation Process + Sep. N 2 O 2 Separation Power & Heat N 2 O 2 N 2 Compression & Dehydration ISSUES capture efficiencies are below 100%, and capture consumes energy. Plants with CCS fitted will emit around 10-20% of the emitted by plants without. Large emissions sources (principally power plants but also other industrial sources) offer significant economies of scale. CCS costs depend on factors such as fuel, technology, location, national circumstances and potential use. Capture costs make up over half of overall CCS costs. New plant cost estimates from the 2005 Special Report on Carbon Dioxide Capture and Storage (by the Intergovernmental Panel on Climate Change, IPCC) range from US$ /metric ton avoided (typically 1-5 cents/kwh electricity). There is limited potential for early opportunities with substantially lower costs (e.g., enhanced oil recovery) and these should be used for technological learning. Systems could be implemented for US$ 25-50/metric ton in 25 years, especially if capture costs can be substantially reduced. Technical experts are confident that storage in carefully chosen and managed sites would be secure over the very long term. Available evidence suggests that there is a technical potential in geological formations alone sufficient to cover the demand for geological storage over the next century. Oceanic storage potential could be vast. CCS is the application of known techniques to a sophisticated, new, immense challenge. Most of the main elements of the CCS chain are now being implemented at full scale, but bringing Raw material Gas, Ammonia, Steel Source: Intergovernmental Panel on Climate Change. Special Report on Carbon Dioxide Capture and Storage

10 these elements together in one integrated system remains to be demonstrated and is still very costly. Commercial implementation is not expected for another 20 years. post-combustion capture at a plant in Malaysia. Courtesy of Petronas Fertilizer Kedah and Mitsubishi Heavy Industries. THE WAY FORWARD In order to gain acceptance as a large-scale option, CCS must convince the public that it is safe (large releases could lead to oxygen deprivation); that storage would be long-term; that its energy use is a reasonable use of fossil fuels; that ecosystem impacts are acceptable; that inter-generational equity concerns of a CCS legacy can be met. Costs for all parts of the CCS chain must be reduced through aggressive research and demonstration, especially for capture at power plants. Even if costs come down substantially, a power plant with capture facilities will always be more expensive to build and run than one without. Therefore, implementing CCS will always require additional incentives, e.g., through captured and stored carbon being valued as avoided emissions by international and national regulations and policy. CCS under the Kyoto Protocol s Clean Development Mechanism (CDM) is currently under review. For implementation in developing countries, technology transfer based on local development of engineering capacity will be critical. CCS cannot be applied economically to all emissions and will be part of a portfolio of measures. The IPCC Special Report projects that by 2050, around 20-40% of global fuel emissions could be technically suitable for capture, including 30-60% of power generation. A wide range of national and international R&D initiatives are underway, e.g., Future Gen, GreenGen, or the Carbon Sequestration Leadership Forum. FACTS AND TRENDS CARBON CAPTURE AND STORAGE (CCS) Powering a Sustainable Future (October 2006)

11 Percent (%) Facts and Trends COAL CONTEXT Coal is the most abundant fossil fuel; it is widely distributed, and there are over 200 years of economically recoverable reserves at current extraction rates, an important contribution to energy security. Most coal is used within the country of extraction. A small, growing percentage (currently 12%) is traded between regions. Transport costs exhibit regional differences but are significant; thus trade is limited to high-quality coals. Coal is a relatively cheap and abundant fuel and will continue to be used where it has major cost advantages. The International Energy Agency (IEA) projects a coal share of 38% in 2030, and continuing large generation shares within the rapidly growing markets of China (80% of electricity generation) and India (over 60%). In certain locations, coal offers the only cost-effective route to electrification. More electricity is generated from coal than from any other fuel. In 2002, coal was responsible for 39% of world generation. Share of electricity generation: Coal World European Union North Pacific Transition Economies China South Latin Africa Middle Source: International Energy Agency. World Energy Outlook 2004.

12 ISSUES 95% of the electricity generated from coal is from conventional pulverized coal (PC) plants, with efficiencies typically between 33 and 39%. Capital costs are higher than natural gas combined cycle gas turbine (CCGT), but coal is a relatively low-cost fuel. Power generation from new coal plants is often more competitive than new CCGT, especially where coal prices are low. The challenge with coal is to reduce its environmental impacts. Technologies that reduce the environmental impacts of coal generation exist and are being developed; they have higher operational efficiencies but higher capital costs. Coal power generation emitted 70% of power sector in Conventional old generation PC plants emit up to twice as much per unit of electricity generation as natural gas CCGT. Well-maintained coal plants with modern controls can meet environmental regulations for local pollutants (NOx, SOx and particulates) in the most demanding countries. Poorly-maintained equipment with missing or ineffective emissions controls can cause environmental impacts. Most new plants use advanced coal technologies (higher efficiency PC with flue gas desulfurization). THE WAY FORWARD More advanced clean coal technologies (e.g., integrated gasification combined cyle (IGCC), fluidized bed combustion (FBC)) have been demonstrated. Uptake is currently limited by higher costs, perceived technology risks and lack of clear financial incentives. However, recent announcements of new IGCC plants to be built in the U.S. indicate a growing change in overcoming past obstacles. R&D needs to be focused on further increasing efficiencies, reducing emissions of local air pollutants to near zero, developing plants compatible with carbon capture and storage (CCS) and reducing the capital costs of plants. CCS technologies must be demonstrated at scale and incorporated as soon as they are commercially available (see also the CCS fact sheets). Local air pollution must be minimized using advanced generation and emissions control equipment, where applicable. FACTS AND TRENDS COAL Powering a Sustainable Future (October 2006)

13 Percent (%) Facts and Trends NATURAL GAS (IN ELECTRICITY GENERATION) CONTEXT Natural gas share of global electricity generation has grown rapidly and is projected to increase from 19% in 2002 to 30% by The share of power generation is projected to be over 50% in certain countries by Countries that are net importers will have security of supply concerns. Natural gas technologies are available in all sizes to generate electricity, from a few kilowatts (kw) to hundreds of megawatts (MW). Electricity generation is dominated by high-efficiency CCGT (combined cycle gas turbines). There are proven reserves worldwide for at least 60 years at current production rates. Two-thirds of these reserves are in Russia, Iran and Qatar. Exploiting reserves will require major Share of electricity generation: Natural gas World European Union North Transition China Pacific Economies South Latin Africa Middle investments in capital-intensive production, terminals and transport facilities. Natural gas demand is likely to peak at some point in the 21st century. If this is the case, natural gas should be seen as a transitional resource. ISSUES Capital costs and project lead times for CCGTs are significantly lower than for other largescale generation technologies. Low up-front financing costs make CCGT attractive to investors, particularly in deregulated markets. Fuel costs are responsible for 65-90% of CCGT electricity generation costs. Increasing gas generation requires the expansion of gas availability at competitive prices. In the 1990s, gas supply outstripped demand, and much of thenecessary, capital-intensive infrastructure was already in place. Gas prices tend to track oil prices and are now considerably higher, forcing many potential investors to reconsider their options. emissions per unit of electricity generation using current technologies are approximately 50% lower than those from coal plants. emissions from gas-fired generation represented 7.8% of total emissions from fuel combustion in Carbon capture and storage from gas power plants is possible but likely to be more expensive per metric ton of avoided than from coal-based generation. Source: International Energy Agency. World Energy Outlook 2004.

14 Natural gas is easily the cleanest fossil fuel: SOx and particulate emissions are negligible; only coal plants with the best available emissions reduction technologies can match the NOx emissions per unit of electricity generation from gas. The safety record of natural gas distribution (including the transport of liquefied natural gas (LNG)) and generation has been excellent. However, some communities have expressed strong opposition to the construction of LNG receiving terminals on their coastlines. R&D aims to bring CCGT efficiencies up to their technical limit (over 60%) while controlling NOx emissions, to reduce costs of smaller units (engines and turbines) and to develop fuel cells. All fuel cells require hydrogen, but certain types (molten carbonate fuel cells (MCFC), solid oxide fuel cells (SOFC)) can form this directly from gas. Their efficiencies could be 10% higher than conventional CCGT. The availability of gas distribution networks would be a major advantage in marketing fuel cells. COOPERATION WITH INDUSTRY THE WAY FORWARD Demand for natural gas is projected to double over the next 30 years, with power increasing its share in gas use from its current 35%. Meeting the projected increased demand will require trade between regions at five times today s levels by 2030; this trade will serve to create more homogenous prices globally. Much of it will be via ships using LNG, requiring capital-intensive infrastructure. An important element of cooperation between electricity utilities and energy users are industrial CHP schemes. In order to achieve overall efficiency at minimum loss of electricity generation efficiency, utilities can supply high-temperature process steam from the steam circuit of a thermal power station (see picture). The key is that the generation and industrial site are located close to each other, making the transport of heat economical. Higher gas prices will make it more and more important to use combined heat and power (CHP) potential wherever feasible (see box, as well as the section on decentralized generation). Yokohama LNG-fired Combined Cycle Thermal Power Station (TEPCO) and neighboring industries FACTS AND TRENDS NATURAL GAS Powering a Sustainable Future (October 2006)