World Economic Forum – Future Global Agenda series
Demand for electricity in the emerging economies is growing very strongly – between 5% and 6% each year, on average, compared to 1% or less in developed economies – and will continue to rise in the decades ahead. Moreover, many of these same countries have goals to improve energy security and avoid emissions of greenhouse gases and other air pollutants.
It’s impossible to rely solely on natural gas or sources of renewable energy to meet this demand. Nor is it possible to rely exclusively on coal, the most carbon-intensive fossil fuel.
From our past work it is clear that almost all of the increase in nuclear power capacity over the coming decades is set to come from emerging countries. There are three that are particularly crucial: China, India and Russia. Within the OECD, South Korea is the only country expected to see any notable expansion. There are also many other countries that are considering the introduction of nuclear power for the first time. Although significant caution should be exercised in assessing which might actually succeed and over what timeframe as doing so will require a lot of time, expertise and determination.
Countries pursuing an expansion of nuclear power face big challenges. Nuclear power plants have high upfront investment costs and long construction times, which creates particular issues in competitive markets where utilities face significant market and regulatory risk. Nuclear power also faces intense public concern about a wide range of issues. Safety is the dominant concern – safety in plant operation, safe radioactive waste disposal and safeguards against the proliferation of nuclear weapons. And perhaps most importantly, there is the need to improve confidence in the competence and independence of regulatory oversight. If these challenges are not adequately addressed, the nuclear component of future generation may be lower than many expect.
Our world is facing twin challenges of climate change and energy security. Nuclear power can be part of the solution and I believe it will remain an important part of the electricity generation mix in the decades to come in many countries.
This article features in the World Economic Forum’s Outlook on the Global Agenda 2015, published Nov. 7
Fatih Birol is Chief Economist and Director of Global Energy Economics of the International Energy Agency (IEA) and Chair of the Global Agenda Council on the Future of Electricity.