INTERNATIONAL ENERGY AGENCY

© OECD/IEA - 2009

Nuclear Power Forum Manila, 10 December 2010

The role of nuclear power in asustainable energy future

François Nguyen

Office of Energy Markets and Security

International Energy Agency

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Outline

IEA global energy and power sector outlook

Economics of nuclear power & cost of power

generation

Challenges in investment in new power plants

Key messages

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Emerging economies dominatethe growth in demand for all fuels

Demand for all types of energy increases in non-OECD countries, while demand for coal & oil declines in the OECD

Incremental primary energy demand in the New Policies Scenario, 2008-2035

- 600 - 300 0 300 600 900 1 200 1 500

Other renewables

Hydro

Nuclear

Gas

Oil

Coal

Mtoe

OECD

China

Rest of world

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Booming demand for mobility in the

emerging economies drives up oil use

0

200

400

600

800

1 000

1 200

1 400

1 600

1980 1990 2000 2008 2020 2035

Million

China

Other non-OECD

United States

Other OECD

Passenger vehicles in the New Policies Scenario

Getting the prices right, by phasing-out fossil-fuel subsidies,

is the single most effective measure to cut energy demand

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Projected electric and plug-in hybrid vehicle sales through 2020

Figure based on announced national sales and stock targets, with assumed 20%annual sales growth after target is met, if target is before 2020 (e.g. China’starget is for end of 2011). EV/PHEV sales could reach 8 million by 2020

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

EV +

PH

EV S

ale

s (m

illi

on

s)

Canada

Austria

Ireland

Netherlands

Sweden

Portugal

UK

Germany

France

Korea

Japan

Spain

United States

China

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Historical global electricity consumption

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

20 000

1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2009

TWh

End of World War II

1st Oil Price Shock

Asian Economic Crisis

Black Monday Stock Market Crash

Dot-com Bubble Burst

US Recession

2nd Oil Price Shock

Global Credit Crunch

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World Electricity Consumption

(2006 –2030)

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Energy-related CO2 emissions in

Baseline and BLUE Map scenarios

5

10

15

20

25

30

35

40

45

50

55

60

2010 2015 2020 2025 2030 2035 2040 2045 2050

Gt

CO

2

Other Non-OECD 19%

Other OME 14%

India 12%

China 27%

Other OECD 10%

OECD Europe 7%

United States 11%BLUE Map emissions 14 Gt

Baseline emissions 57 Gt

ETP2010 analysis WEO 2009 450 ppm case

Primary energy demand in non-OECD countries is projected to increase much faster than in OECD countries in the Baseline scenario.

In the BLUE Map scenario, most of the reductions in energy-related CO2 emissions are in non-OECD countries.

Non-OECD

countries

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De-carbonisation requires a radical

shift in electricity generation mix

0

5

10

15

20

25

30

35

40

45

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2007 Baseline 2050

BLUE Map 2050

BLUE High Nuclear 2050

BLUE High Ren 2050

PWh

Other

Solar

Wind

Biomass+CCS

Biomass and waste

Hydro

Nuclear

Natural gas+CCS

Natural gas

Oil

Coal+CCS

Coal

Under the Baseline fossil fuels continue to dominate

• By 2050 under BLUE Map scenario, nuclear share rises to 24%

• In the Blue High nuclear case, nuclear share reaches 38% of global

electricity production

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Joint IEA/NEA Nuclear Roadmap (June 2010)

Nuclear is currently the only option (excluding hydro) that can deliver low carbon, base load power at competitive prices

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Evolution of generation mix in IEA member countries 1974-2008

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Average annual electricity capacity additions to 2050, BLUE Map scenario

Annual rates of investment in low-carbon technologies must be massively increased from today’s levels.

0 10 20 30 40 50

Solar CSP

Solar PV

Geothermal

Wind-offshore

Wind-onshore

Biomass plants

Hydro

Nuclear

Gas-fired with CCS

Coal-fired with CCS

GW/ yr

Present rate Gap to reach BLUE Map

30 plants (1 000 MW)

200 plants (50 MW)

12 000 turbines (4 MW)

3 600 turbines (4 MW)

45 units (100 MW)

55 CSP plants (250 MW)

325 million m2 solar panels

2/3 of Three Gorges Dam

35 plants (500 MW)

20 plants (500 MW)

Historical high

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ASEAN generation capacity by country

and fuel - Reference Scenario

Generation capacity in Indonesia is projected to nearly triple over

the period 2007-2030 reaching 100 GW by 2030.

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Philippine primary energy demand by

fuel in the Reference Scenario

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Risk and return assessment tends to favour investments in gas-fired power plants

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Main findings of IEA/NEA 2010 cost study

Current context is of great uncertainty over future input costs

No technology has a clear overall advantage globally or even regionally

Detailed country numbers reveal a large variety of results.

The real added value of the study is the detailed cost data by country

With financing costs at 5%, nuclear is the most competitive solution

With financing costs at 10%, and low carbon prices , coal-fired generation and CCGTs are the cheapest sources of electricity

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Generation costs are site and technology specific. Key parameters affecting competitiveness include costs of project financing and CO2 prices.

A median case: Sensitivity to CO2 cost

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Main challenges for nuclear expansion

Huge initial investment and financing issues Long delays in permitting

High construction risks

Competitiveness with other energy sources Uncertainties in fuel and electricity prices

Carbon Pricing

Impact of grid integration of renewables

Safety, security, waste management and proliferation issues

International co—operation is required

Constraint on human resources and equipment supply

For emerging nuclear countries Significant need for capacity building and

institutional and regulatory frameworks

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Competitive advantages of nuclear power

Nuclear is currently the only option (excluding hydro) that can deliver low carbon , base load electricity at competitive prices

Fuel cost component of nuclear energy is lower than fossil fuel generation

Nuclear is less vulnerable to sharp increases in fuel prices and can contribute to more stable electricity prices

Carbon pricing improve the competitiveness of nuclear

0%

10%

20%

30%

40%

Nuclear IGCC Coal steam CCGT

incr

ease

in

gen

erat

ing

co

st

Illustrative impact of a 50% increase in fuel prices on generation costs

© OECD/IEA - 2009

Key messages

We must invest in all clean energy technologies (e.g. energy efficiency, renewables, nuclear, etc) comprehensively to mitigate climate change and enhance energy security

Excluding hydro, nuclear is currently the only option that can deliver low carbon, base load power at competitive prices

Nuclear can play a significant role in the decarbonisation of the power sector

Key to nuclear development is costs

Clear, stable and market-based policies and regulatory frameworks are required to facilitate the right choices for investment in power generation

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Thank you for your attention