Chennai, May 11 (IANS) A combination of factors such as the move towards decarbonization, fuel diversification, geopolitical situations leading to higher fossil fuel prices, and climate change affecting solar and wind energy form the basis nuclear power expansion in the Asia-Pacific region, Moody’s Investors Service said.
“Decarbonization and fuel diversification will determine the share of the nuclear power sector in the energy mix in Asia-Pacific,” said Ada Li, vice president and chief credit officer at Moody’s.
“Recent disruptions, such as soaring fossil fuel prices due to the Russian-Ukrainian war, and less stable solar and wind performance due to climatic conditions, also underpin an increased role for nuclear energy in the region’s long-term carbon transition plans,” Li added.
According to Moody’s, nuclear energy will maintain its 10% share of the global energy mix until 2050, supported by an expanding APAC fleet.
Around 60% of new nuclear units under construction worldwide were in Asia-Pacific at the end of April 2023.
Nuclear power’s share of APAC’s energy mix will rise from current levels of 5% to 8% by 2050, Moody’s said.
The stability of nuclear power generation – relative to solar and wind power – increases its cost competitiveness among low-carbon energy options. Recent disruptions, particularly due to the Russian-Ukrainian war and climatic conditions, have further increased the attractiveness of nuclear energy.
China, Japan and Korea will lead APAC’s nuclear power expansion with plans to increase the sector’s share of their energy mix to more than double-digit percentages.
China is the world’s largest builder of nuclear units, with a goal of doubling the share of nuclear power in its energy mix by 2035. Soaring fuel costs and supply shortages have pushed the Japan to switch to nuclear policy, with further restarts planned. South Korea is heavily dependent on nuclear power, with nuclear expected to supply 35% of the country’s total electricity by 2036
According to the report, technological advances for safer, structurally strengthened and climate-resilient reactors, the gradual commissioning of next-generation reactors without material cost overruns or delays, and the provision of safe waste disposal plans and decommissioning should help alleviate political obstacles and public concerns about nuclear power.
Moody’s said new nuclear capacity additions, mainly led by Asia, as well as a more open attitude towards nuclear power to meet net zero targets in markets like the UK, offset nuclear withdrawals and exits in markets like Germany.
There have been announcements of life extensions for existing reactors in developed markets that had originally planned to phase out nuclear power, such as Belgium, according to the report.
Regarding the number of nuclear units currently under construction in the APAC region, China leads with 19 units totaling 19,805 MW and is followed by India with 8 units, 6,028 MW; Korea 3 units, 4,200 MW; Japan 3 units, 4,038 MW; and Bangladesh 2 units, 2,160 MW.
The ratings agency said construction delays and cost overruns are common in innovative projects, especially under enhanced safety requirements for next-generation reactors.
For example, the European Pressurized Reactor (EPR), a third-generation nuclear power technology, its first unit in Finland, Olkiluoto 3, experienced multiple delays and cost overruns. The plant, which began construction in 2005, did not begin commercial operations until early 2023, some 14 years after its original commissioning date.
The Flamanville EPR in France provides for commercial operation, the cost of which is estimated at more than 12 billion euros, against an initial budget of approximately 3 billion euros. Although the Chinese EPRs at Taishan took less time to come on stream, it still took nearly nine years to complete construction and connect to the grid, Moody’s said.
In India, the prototype 500 MW fast breeder reactor (PFBR) is delayed for various reasons. The reactor is the first of its kind for India and designed by the Indira Gandhi Center for Atomic Research ((IGCAR).
“Continued political support in the research and development of new civilian nuclear power technologies (e.g., small modular reactors (SMRs)) will improve the long-term competitiveness of nuclear power and cultivate the technical expertise of personnel “, said Moodya.
SMRs are nuclear reactors with a capacity of up to 300 MW per unit, approximately one third of the production capacity of traditional nuclear reactors.
They are expected to have a lower initial investment and shorter construction time than traditional reactors due to their smaller scale, components that can be assembled and transported to the factory, and lower site requirements.
On the other hand, wider application of SMRs is limited by their overall economics after incorporating infrastructure costs, e.g. grid connection.
There are currently 50 SMRs worldwide, most of which are pilot reactors or reactors built for academic research purposes. Wider application of commercially viable SMR technologies will benefit long-term nuclear development because, given the smaller-scale investments required, they are more likely to attract private investors and therefore make it easier to secure financing, Moody’s said.
That apart from countries like China, India, Japan and others are developing or exploring thorium-based nuclear reactors as an alternative to uranium, thorium being three times more abundant than uranium. However, extraction costs remain high and there are other challenges in terms of material and waste treatment.