Nuclear Power

Countries and regions making notable progress to advance nuclear electricity include: 

• 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. 
  

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. 

In 2022, nuclear power capacity increased by about 1.5 GW globally (a 0.3% increase year-on-year), as nuclear power capacity additions outpaced more than 6 GW of retirements. Emerging market and developing economies (EMDEs) accounted for around 60% of new capacity additions, while more than half of retirements were in advanced economies such as Belgium, the United Kingdom and the United States.  

To get on track with the Net Zero Scenario, global nuclear capacity needs to expand by about 15 GW per year on average (just over 3% annual growth) to 2030, helping to maintain nuclear's share of electricity generation at around 10%. This expansion would need to occur in both advanced economies and EMDEs. Prioritising lifetime extensions in G7 members would bolster the low-emission foundation already in place and enable new nuclear capacity to increase the total. 

In 2022, 7.9 GW of new nuclear power capacity was brought online, a 40% increase on the previous year. China completed two reactors, marking the tenth year in a row that it added the most nuclear power capacity of any country. Projects were also completed in Finland, Korea, Pakistan and the United Arab Emirates. In addition, construction was started in 2022 on five reactors in China, two in Egypt and one in Türkiye. 

A new wave of nuclear construction in all active markets open to the technology, including in advanced economies, will be key to offset expected retirements and get onto a trajectory consistent with the Net Zero Scenario, stepping up global nuclear power capacity additions to around 22 GW per year on average in the 2020s.  

Ambitions to reach net zero targets have encouraged innovation in nuclear power technologies such as SMRs, which generally have a rated capacity of under 300 MW per reactor, down to 10 MW (compared to more than 1 000 MW for many conventional reactors). Small modular reactors hold the promise of being more affordable and easier and faster to build than conventional large reactors. Close to 80 designs are currently under development, including several designs that are already in operation. Small modular reactors can potentially be factory-built and transported to the final location, shortening project timelines and potentially reducing construction risk and financing costs. As power systems decarbonise and the share of solar and wind rises, SMRs can contribute to meeting rising power system flexibility needs. They can also be used for heat and hydrogen production. 

Government support for SMRs increased substantially in recent years, running well into the billions of US dollars, an order of magnitude higher than support just a few years ago. This support is unlocking public and private investment. Examples in 2022 and 2023 include: 

• At the 2023 G7 Summit, the United States, Japan, Korea and the United Arab Emirates announced public-private support of up to USD 275 million for an SMR project in Romania, expected to be deployed in 2029. 
• In the United States, the Department of Energy has launched the Advanced Reactor Demonstration Program. The first SMR in the United States is anticipated to be completed by NuScale around 2030. 
• France, as part of its 2030 investment plan, plans to invest EUR 1 billion to develop SMR technologies. 
• A co-operation agreement between United States-based energy company Holtec International and Ukrainian national nuclear operator Energoatom aims to install up to 20 SMRs in Ukraine by 2029. 
• In Indonesia, SMR technology is being considered to supply electricity for an electrolysis-based ammonia fertiliser plant, to begin operations as early as 2028. 
• In Japan, several companies have invested USD 80 million in a project to develop a molten salt reactor (MSR) nuclear power plant, with the aim of reaching commercialisation in the early 2030s. 
• Canada launched New Small Modular Reactor Funding Program with CAD 30 million in funding to support Canada’s SMR industry and research on safe SMR waste management, as part of its SMR roadmap and action plan. SMR technology also benefits from the investment tax credit of up to 30% for clean technologies, introduced in November 2022. 
• China has several advanced nuclear technologies under development, including the high-temperature gas-cooled reactor, with the first unit reaching initial full-power operation in 2022. 

Small modular reactors can also benefit from policy and regulatory reforms that streamline licensing and regulatory frameworks. Alongside learning from the first demonstration projects, these measures would accelerate deployment and drive down the cost of new projects.  

In order to meet the timelines required for widespread use in decarbonised systems, SMRs will also require further technological advancements. Generation III technologies, which focus on enhanced safety, include concepts already under construction that are expected to come online by 2030. Generation IV SMRs, which include liquid metal-cooled, molten salt-cooled and gas-cooled designs, are generally less advanced. Their ability to reach higher temperatures and potentially recycle used nuclear fuel makes them attractive technologies, provided progress continues within required timelines. 

Beyond electricity, opportunities for nuclear power could expand where other technologies make progress, including hydrogen production technologies and expansion of district heating networks. Small modular reactors, in particular, come in different sizes, configurations and output temperatures that can facilitate access to other industries where large light water nuclear reactors, because of their physical size and lower temperature requirements, cannot be used. Tapping into these markets could enable nuclear power to fulfil its full potential in energy transitions. 

Although most hydrogen today is made by steam reforming of natural gas or from coal gasification, demand for large volumes of low-emission hydrogen in the Net Zero Scenario provides new opportunities for nuclear power. This can be done in multiple ways, but the most technologically advanced option is to couple nuclear reactors with electrolysers, with several pilot projects involving both low- and high-temperature electrolysis. Applications to create hydrogen directly from nuclear power without the need for electrolysis are also being developed, including high-temperature thermochemical hydrogen production, which can achieve higher efficiencies by using the heat directly from the nuclear unit to split water into hydrogen and oxygen, helping reduce the costs of hydrogen production.  

In the Net Zero Scenario, demand for low-emission heat in district heating systems and in industry increases significantly due to the need to replace fossil fuel-based heating. Current reactor designs are already well adapted to providing district heating, and the smaller scale of SMRs means more localised district heat production could be possible. Moreover, the excess thermal energy created by nuclear electricity production can be injected into heating networks in a co-generation plant setup, significantly reducing the need for additional power plants. 

To reduce emissions in the power sector while simultaneously ensuring energy security, market designs need to adequately value both low-emission power generation and the full range of services needed from generation technologies. Nuclear’s ability to provide low-emission, dispatchable and flexible power boost its value to the system. As decarbonisation increases, these attributes become even more important and valuable to power systems.  

Carbon pricing puts an explicit value on the low-emissions benefits of nuclear power and is present in several electricity markets, including in the European Union, United States and China. Capacity mechanisms, which remunerate generators for making capacity available, are present in several markets in the United States and Europe, while ancillary service markets are established in more markets around the world and are evolving to reflect changing systems.  

Energy security concerns, particularly in the wake of Russia’s invasion of Ukraine, have also been linked to recent nuclear policy changes. In the United States, France, Belgium, Japan, Korea and other countries, additional lifetime extensions for existing nuclear reactors have been approved or signalled. In addition, plans to expand nuclear have been announced or accelerated, including in France, the United Kingdom, India and China. 

In 2016-2022, investment in nuclear averaged just over USD 40 billion per year. To align with the Net Zero Scenario, nuclear investment needs to scale up to about USD 125 billion per year in the late 2020s, more than triple the recent level. To achieve this objective, it will be critical for governments to reduce risks for investment in nuclear power wherever possible. 

• Diane Cameron, OECD Nuclear Energy Agency, Reviewer 
• Michel Berthélemy, OECD Nuclear Energy Agency, Reviewer