‘Peaceful atom’ as a cure for the energy crisis

Nuclear power is again on the radar as the energy crisis picks up steam, with no letup in sight. The Minister of Economy, Trade and Industry of Japan has said in a recent statement that nuclear generation will play a crucial role for the country’s energy security. Japan plans to restart more idled nuclear plants in the coming years and is looking to develop next-generation reactors.[1] Europe is also witnessing a resurgence of nuclear energy, which until recently was seen as holding no promise for the future: the worsening energy crisis has spurred renewed interest in France, while Belgium is backtracking on its resolve to phase out nuclear electricity generation. In Germany, the energy crisis has also revived a debate over whether to take another look at a technology it had long turned its back on.[2]

According to the IAEA, global operating nuclear power capacity now stands at around 388 GW, provided by 433 operational reactors.[3] The top five countries in terms of both the number of reactors and net electrical capacity are the US, France, China, Russia and Japan (see Fig. 1). However, this ranking may soon change. IHS Markit expects that China’s total newly built capacity will overtake that of France within five years and the United States within 10 years.[4]

Atomic power is high on the agenda not only among nuclear energy champions. Turkey is planning to launch the first reactor of its first nuclear power plant in the next 12 months,[5] while Poland, the only EU country without a nuclear plant, is already negotiating a number of nuclear projects.[6]

The nuclear renaissance is marked by a rise in uranium prices, which have now climbed to $50 per pound after falling briefly this summer (see Fig. 2). Uranium funds – ETF Global X Uranium, Sprott Uranium Miners ETF and Sprott Physical Uranium Trust – have also soared from their summer lows on the back of renewed interest in nuclear power[7] (see Fig. 3).

Although no restrictions on Russian uranium imports have been announced yet, such a move would pose major risks for the nuclear industry. Russia is a key player on this market, and the restrictions could slow down nuclear progress and disrupt the already tenuous balance among global partners.

While IHS Markit points to additions of 355 GW of new nuclear capacity between 2022 and 2050, global installed capacity will grow only 33% to 555 GW, with much of the new build to be offset by the retirement of old reactors.[8] Considering also the wider use of other energy sources, nuclear energy’s share of global power generation will therefore decline from the current 10% to 7% over the same period.