The Clean Energy Ministerial’s Nuclear Innovation: Clean Energy Future (NICE Future) initiative and the International Youth Nuclear Congress (IYNC) hosted a webinar on Earth Day, 22 April 2021, on Policy & Financing Lessons: Advancing Energy and Climate Goals with Low-Carbon Energy Systems. The webinar highlighted the role young and future generations will play in the clean energy transition.
The NEA participated in the discussion with a presentation on the costs of decarbonisation. NEA nuclear energy analyst Michel Berthélemy spoke about the recent NEA work on electricity markets and underlined the importance of system costs and full cost accounting within the context of a clean energy future. “You will often hear in the headlines about plant-level costs, about renewables such as wind and solar breaking new records in terms of costs, which is very good news for the climate,” said Berthélemy. “However this only gives you a partial view about the costs of electricity, particularly because it doesn’t talk about the costs at the grid level in terms of integrating these technologies and in terms of the grid itself.”
Decarbonisation commitments made as part of post-COVID-19 economic recovery plans must be approached with a full understanding of the costs and impacts of various technologies in the electricity system as a whole. The full costs of electricity provision come in three categories: i) plant‑level production costs, ii) grid‑level system costs, and iii) external social and environmental costs. The social and environmental impacts of electricity provision affect people in ways currently not captured by market prices. Therefore, to improve welfare, energy decision makers must integrate full costs accounting into their policies.
Policymakers also need to take into account system costs in order to reconcile climate objectives with economic goals. A recent NEA study highlights can impact the costs of electricity provision. These issues appear as overall system costs, which comprise profile, balancing and connection costs, as well as transmission and distribution costs. As such, at higher rates of variable renewable energy, the value for nuclear flexibility increases progressively.
Both large Generation III reactors and Small Modular Reactors (SMRs) have inherent load-following characteristics that make them capable of operating flexibly in electricity systems with large penetration of VRE technologies. It is increasingly recognised that advanced reactor technologies, including SMRs, can also be suitable for non-electric applications such as industrial heat, desalination and hydrogen production. Such flexibility inherent to SMRs could present some benefits from the perspective of system cost optimisation.
“Small modular and advanced reactors can really broaden the contribution that nuclear energy can make towards decarbonising the energy sector,” said Berthélemy during his presentation. “Considering the need to decarbonise heavy industry and transport, the massive requirements for low-carbon hydrogen production, and all the coal power plants that will have to be replaced in the coming two decades, we see that having SMRs or advanced reactors will also be key assets to decarbonise these sectors as well.”
There is growing interest from policymakers, nuclear power companies and energy analysts around the world in the potential of SMRs as a low-carbon technology component of future clean energy systems. A new NEA report provides a comprehensive overview of SMR technologies in order to assess the potential role SMRs could play in decarbonising energy systems. The report also analyses the main challenges that these technologies have to overcome to achieve large-scale deployment and economic competiveness.