Nuclear power bank. Supporting infrastructure

Tag: export-import bank

From left: Romanian minister of energy Virgil Popescu, U.S. Export-Import Bank president and chair Reta Jo Lewis, Romanian president Klaus Iohannis, U.S. special presidential envoy for climate John Kerry, and U.S. State Department assistant secretary Geoffrey Pyatt. (Photo: ExIm)

The Export-Import Bank of the United States has issued two letters of interest (LOIs) for the financing of U.S.-sourced pre-project technical services in connection with the proposed reactor construction project at Romania’s Cernavoda nuclear plant, the bank announced last week.

Company launched to develop NuScale SMRs in Romania

From left: Romanian energy minister Virgil Popescu; E-Infra CEO Teofil Mureșan; Nuclearelectrica board chairman Teodor Chirica; and U.S. undersecretary for economic development, energy, and environment Jose Fernandez. (Photo: Nuclearelectrica)

Energy firms Nuclearelectrica and Nova Power Gas have launched a joint venture, RoPower Nuclear, for the development of small modular reactors in Romania, with SMR technology provided by NuScale Power, of Portland, Ore.

Largely state-owned, Nuclearelectrica operates Romania’s sole nuclear power facility, the two-unit Cernavoda plant, while Nova Power Gas, a subsidiary of the privately held E-Infra Group, is a supplier and distributor of electricity and natural gas in Romania. The two firms own equal shares of RoPower.

Report sizes up nuclear new-build financing from five top exporters

As energy security and environmental concerns prompt some countries to increase their reliance on nuclear energy or become first-time adopters of the technology, the U.S. government must decide whether it will offer financing for reactor exports—a move that poses financial risks but could create jobs, address global climate and energy security challenges, and limit Chinese and Russian influence. A new report released on August 25 by the Center on Global Energy Policy at Columbia University’s School of International and Public Affairs, Comparing Government Financing of Reactor Exports: Considerations for U.S. Policy Makers, digs into the history of nuclear reactor financing and delivers recommendations for U.S. policymakers.

Matt Bowen, research scholar at the center and the report’s lead author, told Nuclear News, “Given how important financing is to countries considering new reactor construction, as well as the competition that U.S. vendors face from foreign state-owned entities, Congress and the White House should both FOCUS attention on the issue, including policy options to increase U.S. competitiveness.”

Legislation introduced to reestablish U.S. as global nuclear energy leader

Sens. Joe Manchin (D., W.Va.) and Jim Risch (R., Idaho) recently introduced the International Nuclear Energy Act of 2022, a measure aimed at developing a strategy to counter the growing influence of Russia and China on the global civil nuclear export market.

Manchin is chairman of the Senate Energy and Natural Resources Committee, and Risch is the ranking member of the Foreign Relations Committee.

Bill basics: The legislation, according to the lawmakers, would:

Establish an office to coordinate civil nuclear exports strategy, establish financing relationships, promote regulatory harmonization, enhance safeguards and security, promote standardization of licensing framework, and create an export working group.

What is the role of nuclear power in clean energy transitions?

Nuclear power accounts for about 10% of electricity generation globally, rising to almost 20% in advanced economies. It has historically been one of the largest global contributors of carbon-free electricity and while it faces challenges in some countries, it has significant potential to contribute to power sector decarbonisation.

Nuclear power plants contribute to electricity security in multiple ways by keeping power grids stable and complementing decarbonisation strategies since, to a certain extent, they can adjust their output to accompany shifts in demand and supply. As the share of variable renewables like wind and solar photovoltaics (PV) rises, the need for such services will increase.

What are the challenges?

Nuclear power faces a contrasted future despite its ability to produce emissions-free power. With large up-front costs, long lead times and an often-poor record of on-time delivery, nuclear power projects have trouble in some jurisdictions competing against faster-to-install alternatives, such as natural gas or modern renewables. It also faces public opposition in many countries. Its uncertain future could result in billions of tonnes of additional carbon emissions.

A new dawn for nuclear energy?

Amid today’s global energy crisis, reducing reliance on imported fossil fuels has become the top energy security priority. No less important is the climate crisis: reaching net zero emissions of greenhouse gases by mid-century requires a Rapid and complete decarbonisation of electricity generation and heat production. Nuclear energy, with around 413 gigawatts (GW) of capacity operating in 32 countries, contributes to both goals by avoiding 1.5 gigatonnes (Gt) of global emissions and 180 billion cubic metres (bcm) of global gas demand a year.

While wind and solar PV are expected to lead the push to replace fossil fuels, they need to be complemented by dispatchable resources. As today’s second largest source of low emissions power after hydropower, and with its dispatchability and growth potential, nuclear – in countries where it is accepted – can help ensure secure, diverse low emissions electricity systems.

Tracking Nuclear Electricity

Nuclear power is an important low-emission source of electricity, providing about 10% of global electricity generation. For those countries where it is accepted, it can complement renewables in reducing power sector emissions while also contributing to electricity security as a dispatchable power source. It is also an option for producing low-emission heat and hydrogen. efforts are needed to get nuclear power on track with the Net Zero Emissions by 2050 Scenario. Lifetime extensions of existing nuclear power plants are one of the most cost-effective sources of low-emission electricity, and there have been several positive policy developments to take full advantage of these opportunities including in the United States, France and Japan. Additional effort is needed to accelerate new constructions – 8 GW of new nuclear capacity was brought online in 2022, but the Net Zero Scenario calls for over four-times as much annual deployment by 2030. Support for innovation in nuclear power, including small modular reactors, will also help expand the range of low-emission options and widen the path to net zero power.

Country and regional highlights

Many countries have recently taken steps to extend operations at existing nuclear power plants and build new ones

Belgium recently decided to extend the operation of two existing reactors from 2025 to 2035, which will meet around 15% of electricity demand.
Canada introduced an investment tax credit of up to 30% for clean energy technologies in late 2022, explicitly including small modular reactors (SMRs), and Canada’s Infrastructure Bank granted a loan to build an SMR as early as 2028 at an existing nuclear site.
China continues to lead in nuclear capacity additions, with two large reactors completed in 2022, four more starting construction and plans to further accelerate deployment.
Finland completed Olkiluoto 3 in 2023, the first new nuclear reactor in Western Europe in 15 years.
France agreed in 2022 to construct 6 new large nuclear reactors that will meet around 10% of electricity demand, with an option to build 8 more. The first reactor is targeting 2035 for commissioning.
Japan established a law in 2023 under the Green Transformation initiative that allows power companies to operate nuclear assets for longer, in some cases over 60 years, by excluding periods during which they were suspended for safety reasons. A new policy announced in December 2022 also aims to maximise the use of the existing fleet and foresees the development of new nuclear power plants.
Korea aims for nuclear power to expand to over 30% of electricity generation by 2030 under the 10th Basic Energy Plan, up from 28% currently.
In Poland, the cabinet formally approved in November 2022 the decision that the first nuclear power plant in Poland will use three Westinghouse AP1000 units. In addition, the development of APR1400 units are progressing, and SMRs continue to gain traction among the private sector.
The United Kingdom’s 2022 Energy Security Strategy targets 8 new large reactors, as well as SMRs, to achieve nuclear power capacity of 24 GW by 2050, which could provide up to 25% of projected electricity demand.
In the United States, the Inflation Reduction Act of 2022 created a tax credit for the production of zero-emission nuclear power, dramatically improving the economics of existing nuclear reactors with additional support for nuclear new-build also included.

CO2 emissions

Nuclear power has avoided nearly 70 Gt of CO2 emissions over the past 50 years, concentrated in long-time market leaders

CO2 emissions avoided by nuclear by country or region, 1971-2022

Nuclear power has been a part of electricity supply for more than 50 years, and over that period has avoided around 70 Gt of CO2 emissions globally by reducing the need for coal, natural gas and oil (for context, total global CO2 emissions from energy combustion and industrial processes were 37 Gt in 2022). Without nuclear power, power sector CO2 emissions in advanced economies would have been 60 Gt higher over the past 50 years, led by the United States and European Union. Emerging market and developing economies have recently seen strong growth in nuclear power, led by China and India, helping to cut some 9 Gt of emissions to date.

To get on track with the Net Zero Scenario, nuclear power will need to continue expanding to reduce the need for unabated fossil fuels, at the same time as increasing power output from renewables.

Energy

Nuclear power capacity increased slightly to 414 GW in 2022, but further expansion is needed to get on track with the Net Zero Scenario

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The World Needs Nuclear Power

Any serious effort to grapple with climate change must begin by reckoning with the math involved in transitioning to so-called net-zero carbon emissions—that is, the point at which humans are removing as much carbon dioxide from the atmosphere as they are adding to it, stopping humankind’s contribution to climate change. This transition to green energy is complicated by the fact that even energy sources widely considered to be “green” have negative externalities, despite what many policymakers may wish. In the Democratic Republic of the Congo, for example, children as young as seven mine cobalt, which is needed to make electric car batteries. In China, which controls 80 percent of all solar panel manufacturing, the solar industry relies on Uyghur slave labor. To put it simply, there is no such thing as a free lunch.

Although the International Energy Agency’s revised 2022 energy outlook raises some of these issues, it nonetheless lays out a path to net zero by 2050 that, as one would expect, maximizes wind and solar power while assuming countries can find and extract the required minerals at economic prices. But even under these optimistic assumptions, an often overlooked zero-carbon energy source still does much of the heavy lifting: to reach net zero by 2050, the IEA says nuclear energy capacity will need to double. Its model assumes an annual average of 30 gigawatts of new nuclear capacity coming online starting in the 2030s, and staying on that track until 2050.

Nuclear fission, the process that creates nuclear energy, produces abundant power while emitting essentially zero greenhouse gases, similar to wind, solar, and hydroelectric. over, it is a safe and proven technology that already provides over half of U.S. carbon-free energy generation while operating nonstop instead of at the whim of Mother Nature.

What would a doubling of nuclear power require? According to the Oxford Institute for Energy Studies. t he world would need to build 235 new reactors in the next eight years alone just to hit net zero by 2050. Since 440 reactors now operate globally and 60 new ones are under construction, the world would therefore need to construct and have online the equivalent of 180 more 1,000-megawatt reactors, or 25 more new reactors per year, by 2030, with further growth afterward to hit the 2050 target. This is a heavy lift, considering the many roadblocks that antinuclear groups put up to stop this zero-carbon power production, in addition to the lengthy permitting processes and the time and expense needed to bring a plant online.

There is also another hurdle in the way: the world’s largest multilateral green energy financier, the World Bank, has steadfastly refused to finance or co-finance nuclear projects. This self-imposed policy means that energy-hungry, developing countries have had to turn to authoritarian regimes for the financing and technology needed to build nuclear power plants. It is time for the bank to reverse this outdated, counterproductive policy, especially given its FOCUS on climate change mitigation. Countries should no longer be denied one of the key tools needed to solve the ambitious math of net zero.

RECONSIDERING NUCLEAR

Although a few countries, such as Austria and Australia, stubbornly remain opposed to nuclear power, Japan and France, which had planned to shut down a portion of their nuclear reactors, reversed course last spring after Russia’s invasion of Ukraine. Germany, which was scheduled to close all of its reactors by the end of 2022, temporarily halted the shutdown of its final two reactors to avoid energy shortfalls resulting from the war in Ukraine. Still other European countries, including Poland and Romania, are going further by committing to purchase nuclear reactors made in the United States. For similar reasons, the Czech Republic selected Westinghouse as one of three finalists (along with companies from France and South Korea) for a current tender for new nuclear generation. Even more noteworthy, developing countries, including Ghana, Kenya, and the Philippines, announced within the last three months that they intend to construct new nuclear power plants to meet their economic development and clean energy goals.

From the 1960s through the first decade of this century, U.S. firms were the largest exporters of nuclear technologies worldwide, but over the last decade, developing countries have looked to Russia and China for help building new nuclear energy projects. Russia’s principal nuclear supplier, Rosatom, has signed memorandums of agreement with over 30 countries to provide nuclear development assistance, and currently Russia is building nuclear reactors in Bangladesh, Belarus, China, Egypt, India, and Turkey. For its part, China has only exported its technology to Pakistan, but it is actively pursuing other projects around the world. Developing countries have had to turn to Russia and China after the World Bank made it clear in 2013 that it would continue not to fund any nuclear projects.

At the time, the bank’s president, Jim Yong Kim, effectively banned financing nuclear projects, saying “Nuclear power from country to country is an extremely political issue. The World Bank Group does not engage in providing support for nuclear power. We think that this is an extremely difficult conversation that every country is continuing to have.” His public Комментарии и мнения владельцев built on prior bank statements including one in 2009, when the bank said that financing nuclear “ would engender serious risks related to proliferation, safety, and waste disposal. ” recently in 2021, it argued that financing nuclear is “ not in its expertise. ” These justifications were inaccurate then and continue to be so today.

To begin with, the World Bank cannot blame its decision on a lack of expertise. The World Bank is part of the UN system and thus under the same umbrella as the International Atomic Energy Agency (IAEA), whose head, Rafael Grossi, has lobbi ed for the bank to end its ban. The bank can access this deep font of nuclear expertise in the same way it consults with outside experts and entities for projects in areas as diverse as air pollution management in Egypt, irrigation in Pakistan, and public administration modernization in Djibouti, not to mention more complex green energy projects all over the world, such as hydropower and geothermal engineering. National institutions, such as the Export-Import Bank of the United States, which do have nuclear expertise and have provided significant lending capabilities for nuclear projects, could also serve as a resource for the bank.

The other justifications the World Bank offers for its nuclear ban are just as specious. The IAEA has worked for over 70 years to establish a framework to prevent nonproliferation. This system includes a wide variety of safeguard measures, including real-time electronic monitoring, which provides an effective means to identify and prevent nuclear proliferation. Furthermore, civilian nuclear energy is not an easy gateway to nuclear weapons. The fuel generated from civilian light-water nuclear power plants, such as those in the United States, is not an effective source of potential weapons material. A country would require highly sophisticated and expensive capabilities to make it useful for military purposes.

What about other safety concerns? Opponents of nuclear power raise three famous nuclear disasters. The first is the Three Mile Island accident, which occurred in 1979 and was caused by deficient control room instrumentation and inadequate training on emergency procedures. While the event did result in the release of a small amount of radioactive gas—below background levels—the containment structure of the plant prevented a large release of radioactivity, and, according to the U.S. government, no one was killed or seriously injured as a result of the accident. Chernobyl, the most famous and devastating nuclear disaster, occurred in 1986. It was the result of a poor design (one that was not used outside the Soviet Union), reckless low power testing of the reactor without the review or approval of the designer, and a failure to warn the public about radioactive releases in a timely manner. Finally, the nuclear disaster at Fukushima, Japan, in 2011, resulted from ignoring historic tsunami data and building the plant too close to the ocean where the needed safety equipment was vulnerable to flooding.

FUND THE FUTURE

At last year’s UN climate conference, known as COP27, industrialized economies (except China, the world’s largest emitter of greenhouse gases) promised to pay developing countries for their loss and damage ” from climate change. Developing countries felt it was an important step, but these countries need something better: cheap, reliable, abundant en ergy, including from all types of green energy, particularly those with steady baseload power such as nuclear. As the Egyptian economist Abla Abdel Latif told a U.S. congressional delegation at COP, Africa wants and needs financing to develop badly needed power. Perhaps it is one of the reasons Egypt ended up taking a loan from Rosatom (and got locked into Russian technology for decades) for its new nuclear plant.

Instead of paying for “ loss and damage from climate change, which amounts to only pennies per person affected in the developing world, the World Bank and its funders should deploy those billions of dollars as low-interest loans for nuclear projects by secure, nonauthoritarian providers that will help these countries escape energy poverty with safe and reliable zero-carbon power.

In this effort, the bank could follow the lead of the United States, which finally ended its own ban on financing foreign nuclear projects in 2020, when the U.S. International Development Finance Corporation (DFC) agreed to lend for nuclear projects because they are viewed as being renewable energy sources. As the DFC rightly said in its announcement: “This change will also offer an alternative to the financing of authoritarian regimes while advancing U.S. nonproliferation safeguards and supporting U.S. nuclear competitiveness.” Unfortunately, under the Biden administration, the DFC has yet to finance a single nuclear project.

The DFC should lean forward, as its colleagues at the Export-Import Bank of the United States have done, and provide funding for U.S.-sponsored nuclear projects internationally. This could encourage the World Bank to do the same. The United States should also push for the World Bank’s policy to be reversed, as proposed by Representative Patrick McHenry, a Republican from North Carolina and the incoming chair of the House Financial Services Committee. His bill, the International Nuclear Energy Financing Act, or H.R. 1646, is expected to be reintroduced this year.

Even the European Parliament redefined nuclear energy as green in a landmark vote in July 2022. By correctly changing the taxonomy of nuclear to environmentally friendly, European countries now have access to hundreds of billions in cheap loans and state subsidies. Thus, as Europe now has embraced nuclear (and even gas) as green, it continues to deny it to the developing world via its stance against nuclear at the World Bank and other multilateral regional development banks, ensuring Russia and China remain the only game in town.

In addition to making a massive contribution to reaching net zero, World Bank financing for nuclear projects would allow for a greater potential level of involvement by the IAEA to exercise more hands-on oversight during the life cycle of a nuclear project from conception through operations to decommissioning, which can range from 60 to 100 years. Today’s status quo is a lack of transparency on nuclear projects undertaken by China (in Pakistan) and Russia (in Iran), with the United States and Europe potentially being locked out of involvement with these programs for decades. Even if the bank provided financing only to assist in the creation of nuclear regulatory oversight activities for the host country seeking to build new nuclear generation, as opposed to funding the actual projects, it would increase Western involvement and enhance the global nonproliferation regime.

Similarly, funding nuclear research reactor projects that are involved with the production of radioisotopes, which have important medical uses, would create a triple win, and it would be akin to what U.S. President Dwight Eisenhower initiated during the Atoms for Peace Program in 1953. These projects could enable the establishment of independent, effective nuclear regulators; create an initial development project that could enhance indigenous nuclear capacity-building (including the development of local nuclear engineering and construction programs); and allow for the deployment of lifesaving health technologies. All of this could be accomplished in a manner fully consistent with maintaining nuclear safeguards.

An all-of-the-above green energy strategy is essential and means that much more nuclear power needs to happen, and quickly, for the world to stay anywhere close to a trajectory of net zero by 2050. This requires helping countries finance new projects. A good place to start is at the multilateral level via the World Bank, which could create new co-financing opportunities with the private sector as well as spur a change at the African Development Bank and the other multilateral regional development banks, in addition to the DFC and the Export-Import Bank. Given the reality of net-zero math and the change of heart about nuclear energy in Europe, the bank should have a robust discussion about its nuclear policy. It is a fortunate time for this debate to take place because the bank is seeking new ways to expand its lending capacity to address climate change. Changing the World Bank’s policy to provide funding for nuclear projects would be the quickest and easiest way to advance the net-zero effort in the developing world while also increasing security, safety, and prosperity.

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DJ NORDQUIST is former U.S. Executive Director of the World Bank. She serves on the board of ClearPath, a clean energy advocacy group, and is a Senior Adviser at the Center for Strategic and International Studies.

JEFFREY S. MERRIFIELD is former Commissioner of the U.S. Nuclear Regulatory Commission. He leads the energy section at the law firm Pillsbury Winthrop Shaw Pittman and serves on the boards of ClearPath and the United States Nuclear Industry Council.

Sources:

https://www.ans.org/news/tag-export-import%20bank/
https://www.iea.org/energy-system/electricity/nuclear-power
https://sharge.com/products/storm2
https://www.foreignaffairs.com/world/the-world-needs-more-nuclear-power