Every year, the International Energy Agency (IEA) publishes the World Energy Outlook Report. On 12 July, IEA Executive Director Nobuo Tanaka appeared before the European Parliament’s Industry, Energy and Research Committee to present a preview of this year’s report, which will be published in November.
Tanaka reported that the projections for increase of energy from nuclear power will be halved. Under the current scenarios, 360 gigawatt (GW) of new capacity would be built by 2035. In light of recent developments, a review of this situation shows that only 180GW will actually be realized, and most of this will happen outside the OECD. This implies that the share of atomic energy in the world will drop from 14% to 10%, leaving a gap between energy production and growing demand.
NBF – I disagree with the IEA New Policy Scenario. China alone will build 200 – 400 GWe of new nuclear power by 2035. China will export nuclear reactors at half the price of current manufacturers (other than South Korea) who will match the price. Non-OECD countries will buy those reactors.
In new projections, named the ‘New Policy Scenario’, the IEA estimates that to replace nuclear power, roughly one-third of the gap will be filled by increasing production from coal, another third from gas, and the rest from renewable sources. In a startling comparison, Mr. Tanaka pointed out that this would require an increase of 130 million tons of coal (around the size of Australia’s current production), 80 billion cubic metres of natural gas (roughly Qatar’s production level), and 160 terrawatt-hours from renewables (five times Germany’s current output). Taking into consideration the increasing prices of the first two sources, with renewable energy already being very expensive, electricity costs are set to rise. In essence, a complete phase-out of nuclear power would create enormous risks for Europe’s energy security.
The IEA has also developed its new scenario based on the concept of the ‘golden age of gas’. In the need to replace nuclear power capacity, many states are turning to conventional (natural) and unconventional (shale) gas.
Another topic discussed from the framework of the global climate change negotiations is Europe’s target to reduce greenhouse gas emissions by 20% by 2020 (and 50% by 2050). The assumptions made under the ‘New Policy Scenario’ are not enough to reach the 2°C target, as enshrined in the Copenhagen Accord. The requirement to achieve this objective is that CO2 emissions are halved by 2035, but because of the increase in use of coal and gas, they are expected to rise by 30% in the power sector alone. In fact, Tanaka pointed out that the decline of nuclear energy would make reductions in greenhouse gas emissions realistic only technologically, but not practically.