Syllabus Connect:- GS III (Energy)
Context:-
At the beginning of the new millennium, amid growing awareness of the link between energy-related greenhouse gas emissions and climate change, the notion of a ‘nuclear renaissance’ became popular. Scientists and policy makers identified low carbon nuclear power as a potential protagonist in the transition to clean energy.
However, the accident at the Fukushima Daiichi Nuclear Power Plant, operated by the Tokyo Electric Power Company (TEPCO), on 11 March 2011 dealt a blow to plans for swiftly scaling up nuclear power to address not only climate change, but also energy poverty and economic development.
As the global community turned its attention to strengthening nuclear safety, several countries opted to phase out nuclear power.
Following efforts to strengthen nuclear safety and with global warming becoming ever more apparent, nuclear power is regaining a place in global debates as a climate-friendly energy option. That is due to its vital attributes: zero emissions during operation, 24/7 availability, a small land footprint and the versatility to decarbonize ‘hard-to-abate’ sectors in industry and transportation.
But even as technology-neutral organizations such as the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA) recognize nuclear power’s ability to address major global challenges, the extent to which this clean, reliable and sustainable source of energy will achieve its full potential remains uncertain.
The Fukushima Daiichi accident and public acceptance in some countries continue to cast a shadow over nuclear power’s prospects. Furthermore, in some major markets, nuclear power lacks a favourable policy and financing framework that recognize its contributions to climate change mitigation and sustainable development.
Without such a framework, nuclear power will struggle to deliver on its full potential, even as the world remains as dependent on fossil fuels as it was three decades ago.
Impact on electricity generation
The biggest immediate blow to nuclear electricity generation came in Japan. With public confidence in nuclear power at record low levels following the accident, authorities suspended operations at 46 of the country’s 50 operational power reactors.
Nuclear energy, a strategic priority since the 1960s, supplying almost a third of Japan’s electricity, was suddenly shelved. In 2019, nuclear power provided only 7.5% of Japan’s electricity. Just nine nuclear power reactors have resumed operation.
Meanwhile, public and government opinion turned against nuclear power in some other countries as well.
Germany, less than three months after the accident, decided to phase out nuclear power entirely by 2022. All but six of the country’s 17 power reactors have since been permanently shut down.
Nuclear power produced about 12% of the country’s electricity in 2019 compared with around 25% before the accident at Fukushima Daiichi, while coal-fired plants remained the largest source of electricity, according to the IEA.
Elsewhere, Belgium confirmed plans to exit nuclear power by 2025.
In Italy, a government-backed plan to bring back nuclear power, shuttered since 1990, fizzled.
And countries such as Spain and Switzerland decided not to build new nuclear plants.
Between 2011 and 2020, some 48 GWe of nuclear capacity was lost globally as a total of 65 reactors were either shut down or did not have their operational lifetimes extended.
The immediate effect was a decline in global nuclear electricity generation through 2012. At the same time, efforts to deploy other low carbon sources, such as variable wind and solar, intensified as countries looked for new ways to address the climate crisis.
Still, nuclear energy remained the world’s second largest source of low carbon electricity after hydro, providing at the time about 40% of all low carbon power.
Rebuilding confidence
The road back for nuclear power was built on actions taken at the national and international levels to share factual information on the real impact of the Fukushima Daiichi accident and further strengthen nuclear safety, combined with ongoing innovations in reactor design and performance and the long-term operation (LTO) of existing plants.
While newbuild projects in some liberalized markets faced cost and schedule overruns, several countries have made significant progress on the deployment of large scale advanced reactors, including in Belarus, China, the Republic of Korea, Russia and the United Arab Emirates. Russia’s deployment in 2016 of the BN-800 fast reactor, a technology that minimizes waste, underscored the potential for nuclear power’s long-term sustainability.
Meanwhile, efforts accelerated in the development of small modular reactors (SMRs), including the deployment of the first SMRs. Today, SMRs are among the most promising emerging nuclear energy technologies. In comparison to existing reactors, proposed SMR designs generally are simpler and rely more extensively on inherent as well as passive safety features.
They are likely to require lower up-front costs and offer greater flexibility for smaller grid, and integration with renewables and non-electric applications such as hydrogen production and water desalination. Innovative designs will also generate less waste or even run on recycled spent fuel.
Five years after the Fukushima Daiichi accident, as the Paris Agreement entered into force, an increasing number of countries were looking to nuclear power as a means not only to address climate change, but to improve energy security, reduce the impact of volatile fuel prices and make their economies more competitive.
Around 30 countries are working with the IAEA to explore the introduction of nuclear power for the first time.
Bangladesh and Turkey are building their first reactors while Belarus and the UAE started generating nuclear electricity last year, demonstrating the important role that newcomer countries will play in the future of nuclear power.
Nuclear energy’s share of global electricity production also ticked up slightly in 2019, to 10.4%, while generating almost one third of the world’s low carbon power. And in 2020, during the pandemic lockdowns, nuclear power played an important part in providing secure, flexible and stable generation in markets characterized by significant drops in electricity demand and large shares of variable generation
Over the last decade, the centre of nuclear power expansion has shifted to Asia, which accounts for more than two thirds of all reactors under construction. In total, 59 GWe in capacity has been added between 2011 and 2020, including 37 GWe in China alone.
Momentum has also begun to build behind the idea that nuclear power has a key role to play in climate change mitigation as well as sustainable development. When the UN Sustainable Development Goals (SDGs) were unveiled in 2015, it was clear that nuclear power could contribute to many of them, including economic development, energy access and climate change.
In its 2018 Special Report on Global Warming of 1.5° C, the IPCC’s model pathways showed that nuclear power will need to make a major contribution to keeping the average global temperature increase (relative to pre-industrial times) under this key threshold. In 2019, an IEA report explained how the transition to net-zero emissions by 2050 will be more difficult and expensive without nuclear energy.
The road ahead
Nuclear energy can help slash emissions beyond the electricity sector as well as address electricity consumption growth, air quality concerns, energy supply security and the price volatility of other fuels. Yet its prospects in some countries remain clouded by policy uncertainty, which adds to the cost of financing this capital-intensive technology.
In its latest annual projections published in September 2020, the IAEA said nuclear generation capacity could almost double by 2050 or decline to slightly below current levels.
According to the report, immediate and concerted action is required to reach the high case scenario. Commitments made under the Paris Agreement and other initiatives could support nuclear power development, but that would require the establishment of energy policies and market designs to facilitate investments in dispatchable, low carbon technologies.
One immediate challenge is the age of the reactor fleet. More than two thirds of operational reactors are over 30 years old and will either be retired in the coming decades or have their lifetimes extended. The anticipated shutdowns of a combined 13 reactors in Germany and Belgium by 2022 and 2025 respectively represent some 14 GWe of lost capacity. The fate of existing reactors in Europe, Japan and the US also remains unclear.
The challenge ahead is to build a safe bridge between ageing reactors and the deployment of advanced technologies. Existing rectors must maintain safety and reliability while staying economically competitive. Advanced reactors under development must be backed up by a proof of concept to successfully clear regulatory hurdles.
Beyond electricity
Global electricity needs, meanwhile, are poised to rise in the decades to come and in key energy scenarios that achieve stringent mitigation targets, a significant role for nuclear power is envisaged. That’s because decarbonizing electricity production through greater use of nuclear power, hydro, wind and solar is only the first step. Clean energy is also needed by sectors such as industry, transport and buildings if the world is to achieve net zero by 2050.
Nuclear power can be used to produce low carbon hydrogen at a competitive cost. Low carbon hydrogen is a key future option for the transport sector, where emissions have tripled since 1970.
While nuclear power’s role on climate change and sustainable development has become better known since the Fukushima Daiichi accident, public acceptance and policy uncertainty still constitute hurdles to the nuclear renaissance once envisaged—but it’s role for future is undeniable.
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.