If nuclear falls back, what takes its place?



International Energy Agency : Economist, engineer
Of the new generation capacity that is built to 2035, around one-third is needed to replace plants that are retired. Half of all new capacity is based on renewable sources of energy, although coal remains the leading global fuel for power generation. The growth in China’s electricity demand over the period to 2035 is greater than total current electricity demand in the United States and Japan. China’s coal-fired output increases almost as much as its generation from nuclear, wind and hydropower combined. Average global electricity prices increase by 15% to 2035 in real terms, driven higher by increased fuel input costs, a shift to more capital-intensive generating capacity, subsidies to renewables and CO2 pricing in some countries.
The world’s demand for electricity grows almost twice as fast as its total energy consumption, and the challenge to meet this demand is heightened by the investment needed to replace ageing power sector infrastructure. Of the new generation capacity that is built to 2035, around one-third is needed to replace plants that are retired. Half of all new capacity is based on renewable sources of energy, although coal remains the leading global fuel for power generation. The growth in China’s electricity demand over the period to 2035 is greater than total current electricity demand in the United States and Japan. China’s coal-fired output increases almost as much as its generation from nuclear, wind and hydropower combined. Average global electricity prices increase by 15% to 2035 in real terms, driven higher by increased fuel input costs, a shift to more capital-intensive generating capacity, subsidies to renewables and CO2 pricing in some countries. There are significant regional price variations, with the highest prices persisting in the European Union and Japan, well above those in the United States and China. The anticipated role of nuclear power has been scaled back as countries have reviewed policies in the wake of the 2011 accident at the Fukushima Daiichi nuclear power station. Japan and France have recently joined the countries with intentions to reduce their use of nuclear power, while its competitiveness in the United States and Canada is being challenged by relatively cheap natural gas. Our projections for growth in installed nuclear capacity are lower than in last year’s Outlook and, while nuclear output still grows in absolute terms (driven by expanded generation in China, Korea, India and Russia), its share in the global electricity mix falls slightly over time. Shifting away from nuclear power can have significant implications for a country’s spending on imports of fossil fuels, for electricity prices and for the level of effort needed to meet climate targets.


WEO 2012