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How phase-outs will impact Asia’s nuclear energy
INTERVIEW How phase-outs will impact Asia’s nuclear energy
It is expected to bring 30GW in electricity yearly with 32 reactors under construction, says Rystad analyst.
When France, the US, Sweden, and Russia shut down their 40-year-old nuclear reactors, the global nuclear capacity inevitably lost 5.4 gigawatts (GW). Now that plans to phase-out nuclear reactors in South Korea and Japan hang in limbo, will Asia also risk losing a portion of its capacity? Rystad Energy says it may not be the case —phase-outs will barely scathe the region’s nuclear capacity growth.
This is thanks to emerging markets, such as Pakistan and Bangladesh, that have scaled up production of energy from nuclear reactors, and even Vietnam, which is making progress in exploring small nuclear reactors.
“Many countries in Asia are ramping up the contribution from nuclear power so the nuclear phase-out plans or to reduce the dependency on nuclear power will not have a significant effect in the near term,” Karan Satwani, Rystad Energy, Analyst, Energy Services, told Asian Power in an exclusive interview.
Next to Europe with more than 170 nuclear reactors in operation, Asia leads the growth of installed capacity. The region has about 140 nuclear reactors and is the main driver of growth with 32 nuclear reactors in the works that will generate 30GW in electricity annually. This is largely driven by China, which has at least 150 new reactors planned in the next 15 years, as well as India, and South Korea.
In an exclusive interview, Satwani discussed further with Asian Power the growth potential of nuclear energy in the region as well as continuing challenges that it faces.
Could you tell us which markets are driving the investment in nuclear energy in Asia?
Investments in the nuclear sector are driven by large Asian countries like China and India where the government bodies are planning to increase the share of nuclear power. China aims to have 70 gigawatt electrical (GWe) of operational nuclear power capacity by 2025, with ambitions to reach about 180GWe of operational capacity by 2035. Meanwhile, India is counting on its nuclear programme to help the country meet its Paris climate commitments to reduce the emissions intensity of its economy by a third from 2005 levels by 2030. It plans to have 14.5GWe of nuclear power capacity by 2024 and about 22.5GWe by 2031, aspiring towards a 25% contribution of nuclear energy by 2050.
Apart from China, India, and South Korea, Pakistan also aims to increase its energy production from nuclear reactors to four times its current capacity by the end of 2030 to 8.8GW.
Bangladesh is also set to become a new entrant in the nuclear market as their first 2.2GW nuclear plant is expected to be commissioned in 2023 and has plans to extend the nuclear capacity to 7GW by 2041. Meanwhile, Southeast Asian countries like Vietnam are progressing with early studies related to a small nuclear reactor.
As mentioned in your report, there are countries in the US and France where nuclear reactors are being closed down. Is this a scenario that can be expected in Asia and how will it affect its growth in nuclear energy?
The early adopters of nuclear power technology were primarily centred in Europe and the Americas where many plants were commissioned in the 1970s are approaching the end of their technical life leading to the closure of these plants. In Asia, some nuclear power plants in Japan are approaching the end of their life
Nuclear reactor phase-outs will barely scathe Asia’s nuclear capacity growth (Photo: Karan Satwani, Analyst, Rystad Energy)
Investments in the nuclear sector are driven by large Asian countries like China and India
cycle and with the country’s plans to reduce dependency on nuclear power, we could see some plants being closed down after 2030.
A decline in installed capacity is expected, provided the countries like South Korea and Japan stay firm on their plans to phase out nuclear power. Many countries in Asia are ramping up the contribution from nuclear power so the nuclear phase-out plans or to reduce the dependency on nuclear power will not have a significant effect in the near term and the installed capacity in Asia could see positive year-on-year growth and reach the peak by 2040.
What is the role of nuclear energy in the clean energy transition? Should it be considered “green”?
Nuclear plants generate electricity through fission, without any fossil fuel combustion. Having the lowest land requirements of the low carbon energy sources can generate power 24/7 unlike wind power and solar energy.
Although it requires high capital cost upfront, nuclear operations can be cost-competitive with renewables over the long run.
Many countries have committed to increasing the share of power from nuclear energy to meet the Paris Agreement targets. But the political and economic environment, and the public lack of support, could make the prospect of accomplishing these ambitious objectives difficult. However, there is a need for innovation in replacing power plants reaching the end of their lives, and adding new power plants to the existing fleet.
Nuclear power has been identified as a clean, low-carbon power source with a long lifespan. It may be on the brink of a resurgence as the EU prepares a draft proposal to classify it as a green investment.
ANALYSIS: RENEWABLE ENERGY Renewables growth in Asia risks collapse without transmission system expansion
Black & Veatch says this will need government policies, investment, and storage capacity.
When Vietnam grew its solar power to 16.8 gigawatts (GW) between 2019 and 2020, it showed great potential in renewable energy. But significant growth such as this needs to be backed up by a reliable transmission system—a lesson Vietnam learned the hard way as its grid overloaded, forcing it to restrict power.
After seeing its solar power rise to approximately a quarter of its grid capacity when Ninh Thuan and Binh Thuan overloaded, the country was forced to restrict some 365 million kilowatt-hours of power. Black & Veatch, Asia Power Transmission & Distribution Director Jerin Raj said this is in part due to the absence of enhancements to its power grid and transmission network.
As renewable energy grows rapidly across the region, countries in Asia may need to take note of Vietnam’s experience and strive to have better planned and designed systems, Raj urged.
“With wind and solar resources often located far from existing transmission lines, alongside other factors, such as the expansion of distributed energy resources and increasing bidirectional flows, Asia’s transmission and grid systems need more investment to manage a successful energy transition,” Raj said.
In its 2022 Asia Electric Report, Black & Veatch found that nearly 44% of respondents from the electric power industry agreed that issues in government policies, stemming from debates over decarbonisation, are the biggest challenge for reliable grid operations and performance in Asia.
This is followed by underinvestment in more reliable transmission networks and insufficient energy storage capacity as cited respectively by 36.8% and 31.6% in the report. The report surveyed 57 senior electric industry professionals.
Raj said transmission and distribution systems will need to expand as well as be invested in to support the growth of decentralised power that will help in optimising generation and enhancing grid stability and reliability.
Hurdles to reliable grid
Amongst the key issues that set back Asia in further improving and developing transmission networks are concerns over land acquisition and right-of-way access (37.3%). This is followed by the poor understanding of the integral and rising role of enhancements to the electric system (25.5%), as well as the lack of government policy support (19.6%).
“There is a clear need to increase awareness amongst government and other public stakeholders around the role of transmission in improving the effectiveness of renewable integration and achieving a successful energy transition,” Raj said.
Aside from these, other major challenges to a grid’s reliability include ageing infrastructure (26.3%), investment in network capacity that fails to keep up with demand growth (24.6%), and the introduction of too much variable renewable energy (19.3%).
Raj said as grid operations have become more complex due to a shift to more distributed and intermittent renewable plants and distributed energy resources from larger power plants, the electricity industry is called to reevaluate its system.
“These dynamics call for Asia’s electricity industry to re-evaluate transmission and distribution systems and conduct more advanced and interconnected planning and design across these systems,” he said.
“Partnering with industry leaders experienced with every aspect in the lifecycle of projects from early financing through to commercial operation will be key to expanding Asia’s transmission networks for renewable integration success.”
What more can be done?
There is no doubt that investment is needed for a more reliable transmission system, and according to Black & Veatch, private equity money is ready to be allocated with investors interested in generating facilities.
On the government side, funding for such infrastructure either comes from publicprivate partnerships as well as international financial institutions, like the World Bank and Asian Development Bank (ADB).
“As with any infrastructure, there has to be a revenue plan which allows for a build, own, and operate kind of model,” Narsingh Chaudhary, Executive Vice President & Managing Director, Asia Pacific, Black & Veatch said.
“I see some state grids having a strong enough balance sheet to be able to do it on their own, but there are others who will really need financial support.” This is where the World Bank and ADB could come in to help these state utilities in upgrading their infrastructure.
Chaudhary compared having enough generation without a strong and stable transmission to running a manufacturing business without access to roads and ports which is key in distributing your products.
“There is engagement required from financial institutions for those state grids who can’t afford it. And for those who can afford it, they need to really ensure that they are matching up step-by-step with the generation plans which are there,” Chaudhary told Asian Power.
Chaudhary said amongst the markets that have performed well in improving their transmission systems are the Philippines, China, and Australia. Singapore is also amongst the markets that are ahead of the game after its Energy Market Authority stepped in to help in importing clean and renewable energy.
Asia’s transmission and grid systems need more investment to manage a successful energy transition
