Nuclear Energy Institute – IAEA: Shale Gas, Renewables Subsidies Undermining Nuclear’s Value

A new IAEA report, “International Status and Prospects for Nuclear Power 2014,” sees slack electricity demand, “very low” natural gas prices and renewable subsidies reducing nuclear power’s competiveness in some developed countries.

“Nuclear power generated 2,359 terawatt-hours of electricity in 2013, corresponding to less than 11 percent of world electricity production, the lowest value since 1982,” the report says.

The report blames this year’s global decrease in nuclear electricity generation on the continued post-Fukushima shutdowns in Japan and Germany and on new shutdowns in the United States. However, unlike the shutdowns in Japan and Germany that were based on policy decisions, the key drivers of the U.S. shutdowns have been economic, the IAEA notes.

“Direct and indirect subsidies for renewable energy, especially wind, and renewable energy directives undermine the economic viability of nuclear power, particularly in liberalized electricity markets,” the report said. “Having zero marginal costs, wind and solar electricity are dispatched first, when available, pushing all other generation, including nuclear power, further down the order of supply. Feed-in tariffs for, and offtake obligations of, renewable electricity … further distort electricity markets and drive system costs up.”

The economic, environmental and energy security realities of developing countries, with their burgeoning electricity demand, are fundamentally different, keeping nuclear energy “an important option” for them. The IAEA notes that overall nuclear capacity growth continues to shift to the developing countries in Asia and the former Soviet Union as those countries experience a construction boom.

“[O]f the 72 units under construction globally, 38 are in the rapidly developing countries of non-OECD Asia. Since 2000, this region has accounted for 55 of the 92 construction starts and 30 of the 53 new reactors to have been connected to the grid.”

The IAEA notes that two countries—Belarus and the United Arab Emirates—have started construction on their first nuclear power plants. Turkey has ordered its first nuclear power plant at Akkuyu, although construction has not yet started. Six more countries have decided to launch nuclear energy programs, five are actively preparing nuclear energy programs without having made a final decision, and 19 countries are acquiring more information on starting their own nuclear energy programs, the report says.

via Nuclear Energy Institute – IAEA: Shale Gas, Renewables Subsidies Undermining Nuclear’s Value.