The global transition to a low-carbon economy will involve trillions of dollars. For some it will be an expense; for others, revenue. And U.S. exporters of nuclear energy hardware and expertise could see well over $1 trillion in business by mid-century.
A substantial portion of the zero-carbon energy that is required to stabilize the climate will come from nuclear reactors, according to studies by the United Nations’ Intergovernmental Panel on Climate Change, and other researchers. And a new report from the consulting firm UxC puts the export value in the $1.3 to $1.9 trillion range if the United States participates in supplying the nuclear energy equipment and technology needs projected by the IPCC.
Globally, total capital expenditure between 2020 and 2050 for new reactors will be $5.88 trillion, according to the study, and total expenditures, including for operations, will be $8.6 trillion between now and 2050. This is a huge number but it’s a modest part of the $67.7 trillion spent on all forms of energy by mid-century. UxC’s figures are based on the IPCC’s median estimate of what would be needed to hold warming to 1.5 degrees C, making assumptions about economic growth, electrification of transportation and industry, and other factors.
The projection is based on construction of 840 gigawatts of new nuclear electric capacity around the world, which is a little more than double the amount in service now. American companies are well on their way to being able to claim part of that market, but face stiff competition from foreign competitors, some of them supported by national governments.
For example, Rosatom, a company heavily supported by the Russian government, has been highly successful in exporting its technology, partly because it offers one-stop shopping. It can supply the fuel and finance the projects.
The United States has recently moved to finance some nuclear energy exports, a positive step. However, the study predicts that nuclear power will expand faster in Asia, Eastern Europe, Africa, the Middle East and South America faster than in the United States, or Western Europe. Many places in the world are poised to add air conditioners, refrigerators and other electric appliances the way that the United States did in the 1960s and 1970s, creating enormous new demand for electricity, which will need to be met without fossil fuels.
Asia could see reactors producing more than half its electricity by 2050, the study found.
The mix of reactors will include some small modular reactors, which are factory-built, and then installed on site, UxC predicted. That means that they would be built by highly-paid skilled labor in the United States, even if they were installed abroad., making them good export products.
“Clearly, if the IPCC 2050 target is achieved, U.S. nuclear vendors and related companies will see significant new sales opportunities throughout the world,” the study said.
Nuclear energy has been increasingly embraced by climate experts and political leaders as a necessary part of any solution to global climate challenges. The IPCC report points out that all estimates require assumptions about total economic growth, and how much of the economy will be converted to electricity, including transportation, home heating and industrial use. The balance between nuclear and other carbon-free sources is also uncertain, but numerous studies show that the least-cost path to a zero-carbon economy includes a substantial fraction of generating capacity that is not dependent on weather or variable by season or time of day, advantages that nuclear energy enjoys.
The ability of U.S. nuclear suppliers to compete in global markets is important for the U.S. domestic economy, but also for American influence globally. Supplying a reactor provides a long-term commercial relationship between countries, which leads to closer political ties as well.
The market today is dominated by Russia and China, which are motivated by strategic interests to gain market share. To enable U.S. companies to succeed, the U.S. Government must enhance its export financing and ensure that new markets are open to U.S. supply. And with the global need to decarbonize electricity and other sectors, it is clear that the U.S. has tremendous export opportunities that could help meet growing global demand for carbon-free energy, while reasserting our leadership in nuclear technology.