(Bloomberg) -- Amid rising public acceptance and political commitments for nuclear energy, analysts have a message for industry advocates: temper your enthusiasm.
Countries that pledged this month in Dubai to triple nuclear generation by 2050 face an uphill battle that is likely to leave them short of their goal, scientists and energy researchers wrote in their annual World Nuclear Industry Status Report, released Wednesday.
Such a target is “highly unrealistic,” given the long lead times in building reactors, according to the study, which was partly funded by the German government.
Read More: US, UK Lead Pledge to Triple Nuclear Power by 2050 at COP28
New nuclear units can take many years and billions of dollars to construct, and investment in renewable energy is soaring past that for atomic power, it said. The nuclear industry is largely maintaining an aging fleet of reactors as it faces skyrocketing costs, construction delays and questions about how to dispose of atomic waste.
Nuclear power generation fell 4% last year, reducing the technology’s share on global electricity grids to 9.2% — just half its peak more than a quarter century ago. Meanwhile, total investment in wind and solar capacity surged to a record $495 billion last year, 14 times the estimated support for new nuclear plants.
The assessment is the first since Germany shuttered its last nuclear reactor in April. While Europe’s biggest economy remains a major nuclear fuel maker and supports world-class research facilities, the exit from atomic energy makes it an outlier among nations that want to see a nuclear renaissance.
But even in places where low-emissions nuclear power is seen as part of the solution to mitigate global warming, industry executives say there are better options than building more reactors.
“We have no current plans to expand,” said Uniper SE Chief Executive Officer Michael Lewis, whose company owns six reactors in Sweden — one of the countries that’s pledged to triple nuclear generation. “The lead times for nuclear investments are long, and in the short- to mid-term we have enough high-quality investment opportunities in green flexible generation, green gases and renewables.”
The report echoes the caution urged by International Atomic Energy Agency Director General Rafael Mariano Grossi, who has chided the industry for unfulfilled promises. He said last month that the IAEA’s own forecast of doubling capacity worldwide by mid-century “could be very challenging.”
At present, only state-controlled Chinese and Russian companies are building new reactors at the scale needed to drive down costs. There are just five new units being constructed in Europe and the US. The report said there’s little evidence to suggest western economies have the resources or capacity to ramp up production in the near term.
Europe and the US have the world’s oldest reactor fleets, requiring ever more human and financial resources to keep them generating beyond the initial four decades they’re usually licensed to operate. Last year, France had to bring in 100 North American workers to supplement its labor force repairing broken reactor systems, in what state-run EDF called its “annus horribilis.”
“We’re going to face a lot of challenges and the first one is the money,” said China National Nuclear Corp. Vice President Wang Kai during a COP28 panel discussion on Tuesday. Investors have to wait as long as 15 years until the money needed to build a reactor begins to generate returns.
During that long wait, “you still have to pay interest to the bank, which isn’t attractive to private sector investors,” Wang said, adding that’s why most “nuclear owners and builders and financial entities” are state-owned in China.
To spur market-oriented investments in atomic power, the report recommended government officials focus less on direct subsidies and more on policy incentives.
“No-regrets policies such as putting an appropriate price on carbon would help nuclear economics,” lead author Mycle Schneider wrote.
--With assistance from Petra Sorge.
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