The year 2020 has immersed in the ongoing shutdowns due to the COVID-19 outbreak, where people and businesses around the globe are trying to drive through these uncertain times. Some of the industrial sectors have adopted the new normal for their employees to work from home, have essentially explicated the need for resilient electricity supply. During this pandemic, an overhaul of the power sector has been engendered, redefining power generation, distribution, and consumption. The power sector has encountered sustainability, stability, resilience, and self-sufficiency to be the main pillars of energy solutions. Nuclear fuel is a part of power generation for over 30 countries concerning their future electricity needs, being a resilient electricity source.
Nuclear Power Plants maintain greater security of supply than for fossil fuel plants, as many of the reactors utilize fuel assemblies for around three years. In contrast, fossil duel plants require constant coal or gas supply. Nuclear Fuels need to reload after every 12-18 months, and the operating companies have developed the reloading strategies during the outages to avoid the excessive need for staff. Also, nuclear reactors possess high capacity functions that provide a more reliable and stable source of electricity than the renewables.
Nuclear Power for Reliable Future Power Supply
The ongoing crisis has underlined the importance of the reliable and continuous supply of electricity. Nuclear is one of the lowest Greenhouse Gas (GHG) emissions energy technologies available now that produces only 15 grams CO2-equivalent per kWh, considering over a plant’s entire lifecycle. Nuclear fuel produces a low-carbon, resilient electricity source, satisfying the planet’s need for reliable and stable electricity supply. From 1970-2013, the use of low-carbon energy sources expressed the elimination of 163 Gt of CO2 emissions, according to the International Energy Authority (IEA). Solar and wind contributed 6% while nuclear power accounted for 41%. As revealed by significant independent analysis, power-generating technologies’ combined lifecycle reports Nuclear energy as one of the lowest GHG sources. Nuclear energy registered the provision of 2700 TWh of electricity in 2018 with 452 operating reactors, plays a significant role as the second-largest source of low-carbon electricity today, and contributes 10% of the global electricity supply.
Nuclear Power for Low-Carbon Energy Transition
The nonexistence of new nuclear projects and further lifetime extensions that could end up with an additional 4 billion tonnes of CO2 emissions have underlined the importance of Nuclear foundation, for low-carbon energy transition across the world. According to Tracking SDG 7: The Energy Progress Report, the world will fall short of ensuring a way to affordable, sustainable, reliable and modern energy by 2030, despite the accelerated efforts; Sustainable Development Goals (SDGs) are 17 goals of United Nations with 169 targets, agreed by all 191 UN Member States to try to achieve by the year 2030. The report reveals significant efforts made over the various Sustainable Development Goal (SDG) 7 aspects prior to the start of the COVID-19 crisis. This progress signifies the contraction in the number of people lacking access to electricity worldwide, strong uptake of renewable energy in power generation, and energy efficiency enhancements.
To meet SDGs’ goals, the Paris Agreement has a particular purpose for nuclear energy, targeting to double the present installed capacity by 2050. The Paris Agreement aims to reduce or mitigate greenhouse gas emissions covering a span of 10 to 15 years. The world necessitates defeating its dependency on fossil fuels to combat climate change with reduced greenhouse gas emissions. Nuclear power can be deployed over a large scale within the specified time frame for the satisfactory low-carbon transition worldwide.
The Role of Nuclear Energy in Post COVID-19 Economic Recovery
Governments worldwide are adopting new technologies to sustain the consequences of the ongoing crisis and start planning for post-COVID-19 economic recovery. While moving ahead with the energy transition, the post-crisis economic recovery is the best opportunity to create high-value jobs and economic development. Building a stronger tomorrow: Nuclear power in the post-pandemic world, a recently released whitepaper by The World Nuclear Association (WNA), revealed the advantages of considering Nuclear Energy as part of the world’s post-COVID-19 economic and employment recovery. As per the paper, the recovery strategies, including Nuclear Power investment, will boost economic growth, create jobs, fulfill the climate change commitments, and establish a clean and reliable power system.
Governments aim to maintain and determine affordable energy transition strategies and economic recovery plans to align with the long-term socio-economic and environmental objectives of the Paris Agreement of the UN Sustainable Development Goals. While building a low-carbon energy system, countries must invest and develop in sectors with a proven track record that contributes to local, national and regional economic growth and job possibilities, also the infrastructures like roads, railways, electricity infrastructure, healthcare systems, and welfare provisions that contribute to raising the life quality for societies.
Creating High-Value Jobs in Post Pandemic Recovery
Countries such as France, Japan, or Korea have proven nuclear power development as a spur for industrial and economic growth and prosperity. Around 438 nuclear reactors are proposed and planned globally; whose success could play a key role in post-pandemic recovery. Along with preserving the current reactor fleet, the development of new reactors is also necessary for countries, and the need to actively invest in ensuring the long-term operations (LTO) of these assets. Nuclear LTO is the most cost-effective low-carbon energy source that provides shovel-ready investment projects, which ensure preserving current jobs and result in spill-over jobs and economic development. Nuclear Energy generates an average of 3 000 jobs/GW or around 1.2 million jobs irrespective of direct or indirect with a global Nuclear fleet of about 400GW at resent (NEA, 2020). Nuclear Energy supports the United States by creating nearly half a million jobs and contributes approximately $60 billion to the U.S. gross domestic product each year. Nuclear Power Plants can employ up to 700 workers in the U.S. with 30% higher wages than the local average. The jobs generated through nuclear power require highly-educated and skilled people, long-term employment to spur the spill-over investment into the global economy.
Risk Allocation for Stakeholders
Allocating project risks to the stakeholders best suited to mitigate them is the general principle for efficiently allocating project risks. The two types of stakeholders are usually allocated with various construction risks:
1) The risk owners having primary risk mitigation responsibility, and
2) Other stakeholders are significant for effective risk mitigation.
In most of the categories, risk allocation varies in many complementary contractual arrangements such as ownership arrangements, procurement arrangements, and financial arrangements.
It is remarkable that rather than policy framework-related risks, stakeholders tend to own technological and organizational risks. The policy framework-related risks tend to be owned by the plant owner but often shared with the government. It may vary from project to project. Governments can support with financing to nuclear projects through direct equity stakes, loans, or loan guarantees. Likewise, the risks related to the licensing framework essentially remain with the industry.
Hurdles in Financing Nuclear Plants
The private financial institutions like equity funds hold a limited credit time horizon, as they remain unwilling to invest in long-term assets because of the dilemma in policy changes beyond 10-15 years, rapidly increasing risk premiums. Following the 2008 financial crisis, banks introduced new regulations to improve their safety ratios complying with Basel-III regulations. These regulations indirectly affect bank financing for long-term assets such as nuclear projects. Banks today are less likely to fund long-term capital-intensive projects like new NPPs, as these funding restrict them to enter in new engagements during the tendering period.
Nuclear projects are supposed to comply with specific regulatory frameworks for safety and non-proliferation, including national and international norms and rules: IAEA guidelines, international treaties, conventions, and industry standards. The Equator Principles (EPs) and The International Finance Corporation (IFC) Sustainability Framework set the standards, concerning environmental and social risks. Now, EP governs all the nuclear projects financed through international financial institutions.
Complementarity of Nuclear Energy during COVID-19 and beyond
The COVID-19 crisis has underlined the importance of a resilient power system, and the Governments around the world are about to meet their environmental and energy security policy goals. It is the time for action, to building new Nuclear Plants on the way to achieve global decarbonization goals. Owing to its attributes as a low-carbon and reliable energy source, Nuclear Power will become increasingly attractive. Also, the cost of new nuclear projects is efficiently addressed by policymakers.
In many countries, the problems experienced by first-of-a-kind (FOAK) nuclear projects such as construction delays and cost overruns need to be addressed for succeeding installations. Looking at the long-lasting and structural impacts of nuclear fuel on the global economy and power system, it is crucial for governments to consider nuclear projects as national infrastructure projects of strategic importance. This states the need for governments to unite various stakeholders at large, to address the ongoing global pandemic with economic overhaul during and post COVID-19.
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