Nuclear Energy Financing, Advantages, Global Status

Context: Brussels hosted the first-ever Nuclear Energy Summit highlighting nuclear energy’s role in combating climate change.

Overview of the Nuclear Energy Summit

Motivation from COP28

• Event: UN Climate Change Conference (COP28) in Dubai, December 2023.
• Outcome: Recognition of nuclear energy’s essential role in achieving climate goals.
• Global Initiative: 22 world leaders signed a declaration to triple nuclear energy capacity by 2050.
• IAEA’s Role: Collaboration with IAEA’s ‘Atoms4Netzero’ programme for decarbonization.

Advantages of Nuclear Energy

• Low carbon emissions – 4 times less than solar or wind.
• Reliable and uninterrupted energy supply – not dependent on weather.
• Low operating costs compared to other renewables.
• Smaller land footprint than other renewables.
• Longer lifespan than other renewables.

Challenges of Nuclear Energy Financing

• Limited funding from Multilateral Development Banks (MDBs) and private investors.
• The World Bank hasn’t financed a nuclear project since 1959.
• Need to reform MDB financing policies to include private capital or blended finance models.

Successful Financing Models

• Cooperative funding models used in France, South Korea, Russia, and the UK.
• Investors raise credit and take responsibility for project delivery.
• Finland’s Mankala model: multiple companies co-own energy producers, and share plant costs.
• Financial creativity and market support are needed to unlock nuclear energy’s potential.

Global Status of Nuclear Energy

• 440 nuclear reactors worldwide, generating 25% of the world’s low-carbon energy.
• 60 reactors under construction, 110 planned (mostly in Asia, led by China).
• China targets 10% of its electricity from nuclear by 2035, and 18% by 2060.
• Challenges: Project cost overruns, and bankruptcies (e.g., NuScale, Westinghouse, Areva).

India’s Nuclear Energy Scenario

• Energy Cost: India’s first commercial NPP in Pahalgarh, Tarapur offers energy at competitive rates compared to solar power.
  • At Kudankulam, Tamil Nadu, a newer power plant provides electricity at costs similar to coal-fired thermal power plants.
• Low nuclear energy contribution: 1.6% of India’s renewable energy mix.
• Reasons for low adoption: stigma, safety concerns, regulation, high upfront costs, delays.
• Recent developments:
  • Encouragement of private investment ($26 billion)
  • Plans to triple nuclear capacity by 2031-2032
  • Prime Minister Modi’s support for Prototype Fast Breeder Reactor (PFBR)

Sharing is caring!