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A litany of obstacles threaten to derail a pledge from dozens of countries to triple nuclear power capacity by 2050, executives and officials at a recent industry confab warned.
Financing challenges, supply chain disruptions, an uncertain talent pipeline, and — critically — a widening shortfall of the uranium required to run nuclear power facilities all loom as issues for a sector seen as key to addressing electricity demand growth while weaning grids off fossil fuels. And while each problem is addressable, when taken in sum they point to the scale of the challenge facing the sector. Attendees at the World Nuclear Symposium in London were quick to point out that while nuclear has huge opportunities to grow, it must compete fiercely with other forms of energy if it is to power the global economy.
“We are worried that there is an increasing gap,” Meirzhan Yussupov, chief executive of Kazatomprom — the world’s biggest uranium miner — said in an interview, referring to forecasts of a growing gap between projected nuclear-power growth and supplies of uranium to fuel that demand. “At some point, you can’t replace uranium with anything else. It’s not like diesel or kerosene.”
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The three-day symposium brought together executives, regulators, and other members of the global nuclear sector — including officials from Russian and Chinese state-owned firms — for talks that largely focused on the enormous opportunity available to the industry. Demand for zero- and low-carbon electricity is skyrocketing, countries worldwide are electrifying, and mammoth economies like the United States are seeing power use grow for the first time in a generation: Nuclear offers a green source of power that is not vulnerable to weather patterns, offering a baseload source of electricity.
Yet even as many conference delegates voiced confidence that the COP28 pledge to triple nuclear power capacity by 2050 would be reached, others were quick to point out the obstacles that remained.
When it comes to financing, tripling nuclear capacity will likely require firms to look beyond their traditional partners — governments — to the private sector. National capitals, particularly in the West, have piled up debt in recent years, and in any case, such a massive targeted expansion of capacity would require a broadening of partnerships.
Progress is being made, though. The World Bank this year ended its ban on financing nuclear power projects, opening up a new potential stream of financing from multilateral development banks, many of which follow the Washington-based lender’s policies and rules. Fewer funds now bar investments in nuclear energy, and credit markets are increasingly willing to finance nuclear power projects. Meanwhile, nuclear developers themselves are becoming more precise in their delivery schedules, reducing uncertainty and, by extension, the cost of borrowing.
Uranium supply is also vexing: The World Nuclear Association, the main industry trade group, forecasts global uranium requirements will grow by a third by 2030, and more than double by 2040, but output from mines operating today will halve in the long term. And the time required to develop new mines is, if anything, lengthening. “We need new supply just to pretty much stay where we are, let alone to meet the growth in demand,” Malcolm Critchley, the chief executive of uranium supply-chain firm ConverDyn, told the Symposium.
However, there are positive signs: Kazatomprom is embarking on exploration programs domestically and abroad, and other uranium miners are doing the same.
Other issues include barriers to trade — Critchley warned that a once-largely frictionless market for uranium and fuels was now fracturing — and questions over the future talent pipeline. Training nuclear engineers and industry workers can be a protracted process, and with multiple countries either launching new nuclear programs or expanding existing ones, qualified employees are at a premium.
The View From Africa
Many African countries are following South Africa’s lead — it is currently the only country on the continent with a nuclear program —and Pretoria looks likely to expand its efforts, too. But the challenges they will need to overcome go beyond those facing richer countries.
Ghana and Rwanda are leading the race to deploy the continent’s first small modular reactors, and they, along with South Africa and Egypt — which is building four nuclear power units — all have talent challenges. Whereas the countries without active programs are having to build a base of workers from scratch, South Africa has seen talent flee because it has not expanded its nuclear power efforts in decades, leading to low mobility for skilled developers, engineers, and operators.
The overriding difficulty is the perception that investing in the continent carries increased risk, particularly when it comes to infrastructure projects. African businesses and governments have long complained that ratings agencies unfairly downgrade them relative to similar non-African peers, pushing up borrowing costs. One way to address that is through increased transparency on the part of African institutions as well as lobbying mostly Western-based financial institutions, attendees at the Symposium said.
The other way to address Africa’s borrowing challenges, Loyiso Tyabashe, chief executive of the South Africa Nuclear Energy Corporation, told Semafor, is tied to execution. African firms need “to prove [investors’ negative attitudes] wrong by doing projects in time, by operating the plant safely, so that we can say, here we are, and this is the proof that there is no risk of that nature.” His solution is for the continent to carry out projects, “bearing in mind that the first ones will suffer that risk premium. But going forward, we need to be challenging systemically… those sort of perceptions.”
Notable
- Wind and solar is outpacing nuclear power deployment in Europe at a 14 to 1 ratio, Global Energy Monitor said in a recent report.