InterRegional for Strategic Analysis


        
<p><strong>Most European countries, especially France and the UK, are beginning to boost efforts to replace fossil fuels with nuclear energy due to concerns over the global energy crisis. The current crisis has been impacted by a year of stagnation due to the COVID-19 epidemic followed by a sharp rise in the global demand for oil and gas since early 2021, reaching a climax after the outbreak of the Russian-Ukrainian war in February 2022. This has led to a number of hard-hitting repercussions on vital economic sectors, including frequent power-cuts and halts in many factories’ production.</strong></p>



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<p><strong>Many global economic institutions predict the crisis will continue throughout 2023. Consequently, European governments are focused on mitigating the crisis from developing further, particularly in light of concerns over a potential depletion in Europe’s natural gas reserves by the second quarter of this year.</strong></p>



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<p class="has-vivid-red-color has-text-color"><strong>Growing Trends</strong></p>



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<p>Many Western countries are looking to expand their reliance on nuclear fuel for energy security. This is evidenced in several indicators which include:</p>



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<p><strong>1. &nbsp;Escalating nuclear fuel agreements and projects: </strong>Britain recently announced it’s dedicating a £75 million fund towards bolstering its domestic nuclear fuel production as a means to reduce its dependence on Russian uranium supplies.</p>



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<p>The fund is specifically directed toward financing companies specialized in uranium conversion; a process critical to the production of nuclear fuel from metal. Nearly £13 million of the fund has already been awarded to Springfield’s Nuclear Power Plant in northwest England.</p>



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<p>Meanwhile, the Bulgarian state-owned Koslodoy Nuclear Power Plant has signed an agreement with the Swedish company Westinghouse Electric to supply nuclear fuel for its 1,000 megawatt Russian-built Unit 5, as a first step to diversify away from Russian supplies. Bulgaria seeks to enhance its energy security in the wake of the Russian military intervention in Ukraine, especially as its power plant produces about 35% of the country’s electricity and is currently using nuclear fuel provided by the Russian company Rosatom.</p>



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<p><strong>2. Renewed attention on nuclear energy:</strong> The growing interest in nuclear energy at the UN Climate Change Conference, COP27, reflects a renewed focus on nuclear energy expansion in the twenty-first century. This is due to the increasing power and influence of technologically advanced nuclear energy companies, alongside a growing number of plans to construct new nuclear plants. The International Energy Agency predicts that investment in clean energy—including new nuclear projects—will increase by $2 trillion annually by 2030.</p>



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<p><strong>3. Increased global reliance on nuclear power plants to produce electricity:</strong> During 2021, nuclear power plants produced a total of 2,653.1 TWh; a figure which amounts to 10% of the total electricity generated globally and is expected to rise to 14% by 2050. It is also important to note that EU nuclear plants contribute to approximately 25% of its total electricity production, with France acting as the largest producer of nuclear power in the EU, generating approximately 51.8% of the EU’s total nuclear energy production.</p>



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<p>Last December, France resumed work at three nuclear power plants in order to raise its electricity generation rates, as the country seeks to intensify its fleet of nuclear power plants after months of extended power shortages. According to Bloomberg reports, Electricite de France SA now owns 56 nuclear reactors. This comes as France aims to combat the energy supply crisis amid reduced natural gas flows from Russia. It is expected that France will continue to repair its existing reactors in a bid to increase its reliance on nuclear energy in the future as it aims to produce a total of 324 TWh during 2023, approximately 16% higher than last year’s level.</p>



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<p><strong>4. Expanding number of nuclear reactors globally: </strong>According to International Energy Agency reports, the global power generation from nuclear plants increased by 3.5% in 2021 compared to 2020. As of last May, 439 nuclear reactors were operational across 30 different countries, including 92 reactors in the US and a total of 55 new reactors currently under construction.</p>



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<p>It is predicted that countries across the world will increase their reliance on nuclear reactors as a means to meet their energy needs. For example, the UK’s 2022 Energy Security Strategy revealed government plans to approve the development of eight new reactors by 2030, which will supply approximately 25% of the expected demand for electricity in the UK by 2050.</p>



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<p class="has-vivid-red-color has-text-color"><strong>Underlying Factors</strong></p>



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<p>There are several underlying factors motivating countries to reconsider the need to increasingly replace fossil fuels with nuclear energy, most notably:</p>



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<p><strong>1. An ongoing global energy crisis:</strong> The global energy crisis is expected to intensify this year, with Brent crude oil prices predicted to exceed $100 per barrel in the first quarter of 2023 and some estimates reaching as high as $110-115 per barrel. This is expected to correspond with increasing prices of natural gas, liquefied gas, coal and electricity amid continuing instability in oil and gas markets.</p>



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<p>This crisis will hit hardest in areas such as the EU, Japan, China and South Korea as well as many low-income importing countries harshly impacted by economic shocks each time energy markets take a sharp turn.</p>



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<p><strong>2. Reducing reliance on fossil fuels: </strong>Reliance on nuclear power plants has increased over recent years as, unlike fossil fuels whose carbon dioxide emissions are a main cause of global climate change, nuclear energy does not directly produce carbon dioxide emission. Strategic and environmental factors are driving countries to expand their reliance once again on nuclear energy to meet their domestic energy needs. Today, nuclear energy accounts for 25% of electricity generation in the EU and 10% globally, with growing investment in research and companies interested in this sector. Britain and France are keen to build new reactors. Even Germany’s pledge to shut down its nuclear reactors last year has been postponed until April 2023 to compensate for its lack of fossil fuel supplies from Russia.</p>



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<p><strong>3. High energy production capacity:</strong> In the wake of a severe shortage of energy supplies in the West, nuclear power plants have become a convenient and affordable alternative, generating higher levels of energy than any other source. As a result, it has become an essential source of electricity and a strong candidate to replace other electricity sources known to cause air pollution, such as large coal plants.</p>



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<p>Although a nuclear power plant is expensive to build, it is cheaper to operate and maintain than gas and coal. In addition, nuclear energy does not suffer from price fluctuations in the same way as fossil fuels, and nuclear prices are also easier to predict.</p>



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<p><strong>4. Reducing reliance on external energy suppliers:</strong> The impact of the dynamics of the Ukrainian war on the escalation of international interest in nuclear energy cannot be overlooked. It has left many Western countries feeling vulnerable to Russian pressure and leverage as a result of its gas supplies.</p>



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<p>Therefore, the interest in nuclear energy indicates, in part, an attempt of Western countries to reduce their reliance on external energy suppliers and move toward diversifying their energy sources in order to provide them greater flexibility when dealing with crises, and no longer depend on the decisions of external actors.</p>



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<p class="has-vivid-red-color has-text-color"><strong>Potential Obstacles</strong></p>



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<p>It is expected that these trajectories will face several obstacles globally due to a number of challenges related to replacing fossil fuels with nuclear energy, most notably:</p>



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<p><strong>1. Russian domination of the nuclear energy market:</strong> The EU has imposed restrictions on the purchase of Russian oil and gas after its military intervention in Ukraine, yet some countries continue to import Russian nuclear fuel excluded from EU sanctions under the pretext that it is not considered an important factor in ending Russia’s war in Ukraine. Furthermore, reducing Russia’s role in the West’s nuclear energy market will present several challenges since many operating reactors—as well as those under construction—use Russian technology. In Europe alone, during 2021, there were more than 30 reactors using Russian technology. Russia possesses about 20% of the global uranium conversion capacity, making it difficult for Europe to distance itself from Russian nuclear sources.</p>



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<p><strong>2. A long and costly energy crisis:</strong> The time involved in planning and operating a nuclear reactor may take at least 10 years, outside of the time needed to secure sources of financing for its construction. Due to the high-costs associated with many of the current nuclear plants, their financing is reliant on the approval of industry-giants who usually demand financial subsidies to continue their operation. For example, in 2016, three nuclear plants in upstate New York sought subsidies in order to stay operational, also claiming the plants were crucial for keeping carbon emissions low.</p>



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<p><strong>3. International commitments to climate change:</strong> The world is currently facing a climate crisis and countries globally have had a set of national and international commitments placed upon them in order to combat the crisis.</p>



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<p>Although nuclear power plants do not release carbon emissions directly, they still have a detrimental impact on the surrounding areas. Mining uranium ore uses large amounts of water, produces toxic waste and negatively affects the environment. Uranium mines release radon and arsenic gases which cause detrimental health impacts on those living nearby.</p>



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<p>Nuclear power plants also cause thermal pollution, especially since most nuclear power plants are located near bodies of water to facilitate water drainage from the plants. This causes the water temperature to change making it unlivable for most aquatic animals. Nuclear waste is toxic, making it a serious health and environmental risk that requires advanced technology and specialized management to deal with it appropriately. The amount of nuclear waste produced globally is estimated at 34,000 cubic meters per year and can take many years to decompose.</p>



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<p><strong>4. Nuclear energy’s bad reputation: </strong>Until recently, the word "nuclear" was a common topic among most environmental activists, many politicians, and even ordinary individuals due to the pollution risks associated with radioactive waste and as a result of the nuclear disasters at its power plants. Events such as the 1986 Ukrainian Chernobyl reactor explosion and the 2011 tsunami incident at the Japanese Fukushima plant have caused many to be fearful about their continued operation and prompted countries such as Germany and some US states, including New York and California, to shut down many of their nuclear reactors.</p>



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<p><strong>5. Non-renewable sources:</strong> Although nuclear energy is considered a clean energy source, it is not renewable. Nuclear technology depends on uranium ore as a fuel for energy production. However, as there is only a limited amount of uranium ore in the world, it means the more we rely on nuclear energy, specifically uranium ore, the less uranium resources will be available, which in turn will lead to an increase in the cost of extracting the ore.</p>



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<p><strong>As a result, current global plans to replace fossil fuels with nuclear energy will not be a simple endeavor due to the number of obstacles highlighted that have not yet rendered the quick and positive results needed to make these projects viable. Additionally, due to the amount of time it takes to establish and operate nuclear reactors, nuclear fuel will not be an immediate solution to the current global energy crisis. However, several indicators demonstrate that this has not hindered international efforts to increase reliance on nuclear energy in the long term. </strong><strong></strong></p>

      

Will Nuclear Fuel Solve the Global Energy Crisis?