How the return of nuclear power can help get us to net zero

What’s happened?

The very modest success of the COP26 climate summit has refocused attention on the role of nuclear power as an almost zero-carbon, reliable source of non-intermittent energy that could prove crucial to meeting net-zero targets. “Nuclear power is the only carbon-free source that can deliver round-the-clock power, on demand, almost anywhere,” says the Financial Times.

Wind and solar are expanding fast, but nowhere near fast enough to take up the slack from fossil fuels. That means that nuclear will remain vital, at least as a transitional energy source and very conceivably in the long term too – especially if technological advances such as small modular reactors (SMRs, discussed at length in a recent MoneyWeek piece by Dominic Frisby) and microreactors develop as hoped. Indeed, at COP itself, major industrial nations including the US, Russia, and Brazil all described nuclear energy as a major part of their decarbonisation strategy.

Don’t we rely on nuclear already?

Much less than we used to. Globally, nuclear power produces around 10% of the world’s electricity, making it the second-biggest source of low-carbon energy after hydroelectric power. But that’s a sharp drop from a peak of 18% in the mid-1990s. Many countries invested heavily in nuclear after the oil shocks of the 1970s, and in the ten years to 1992 the amount of nuclear energy consumed jumped by 130%.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

But that investment stalled in the 2000s, and some nations (notably Germany) pulled away from nuclear following the Fukushima disaster of 2011. In the UK, nuclear plants produced 16.5% of our electricity last year. Yet they’re mostly old, and all but one is due to shut by 2030.

Any signs of a turnaround?

China, the world’s biggest carbon emitter, is planning to build at least 150 nuclear reactors over the next 15 years, or more than the entire world has built since the mid-1980s. French president Emmanuel Macron said last week that his country “will for the first time in decades revive the construction of nuclear reactors” to reach its net-zero goal. The EU may be about to reclassify nuclear power as “green” to boost investment.

Through backing for firms such as TerraPower and PacifiCorp, Bill Gates and Warren Buffet are championing a type of advanced small modular reactor (SMR) known as a “fast” Natrium reactor.

And in the UK, a consortium led by aero-engine maker Rolls Royce (and backed by the taxpayer) is investing £405m into a fleet of 12 SMRs as part of a new push into nuclear power designed to help the government meet its net zero carbon targets. Rolls-Royce reckons the first ones could come online by the early 2030s.

But isn’t nuclear power dangerous?

No. According to figures collated by OurWorldinData, nuclear energy is vastly safer, as measured by fatalities per terawatt hour of energy produced, than most other forms of generation. On that metric, coal causes 24.6 deaths, oil 18.4 deaths and natural gas 2.8 deaths. Nuclear, by contrast, causes just 0.07. (Wind is even lower at 0.04 and hydropower and solar lower still, at a 0.02.)

Sixty-five years after the start of the world’s first civil nuclear reactor at Calder Hall in England, “there remains no evidence of anyone’s health being jeopardized by radiation releases from a European nuclear plant” other than Chernobyl, says Jonathan Ford on Bloomberg. But no other European reactor shares the flawed design of the Chernobyl one, and seismic events of the sort that caused Fukushima are unknown here. (The disaster at Fukushima caused just one death from radiation.)

Nuclear is also, of course, much cleaner than fossil fuels – producing three tonnes of greenhouse-gas emissions per gigawatt hour, compared with 820 for coal, 720 for oil and 490 for natural gas. Even solar and wind produce more emissions than nuclear.

So it’s a green energy?

That’s the subject of intense debate – not least among environmentalists themselves. Jacopo Buongiorno, a nuclear-engineering professor at the Massachusetts Institute of Technology, calculates that, over the life cycle of power plants, which includes construction, mining, transport, operation, decommissioning and disposal of waste, the greenhouse-gas emissions for nuclear power are 1/700th those of coal, 1/400th of gas, and a quarter of solar. Nuclear takes up a tiny amount of land compared to wind or solar, and for the same power output the amount of raw material used to build a nuclear plant is also a tiny fraction of an equivalent solar or wind farm.

All that makes it incredibly green. But sceptics say this ignores the nuclear-waste issue, and that nuclear has no chance of preventing global heating due to the complexity, expense and decades-long lead times involved. Money spent on nuclear is money not spent on better options, they say.

So why the excitement over nuclear?

In the real world, nations face “not a beauty contest around the best energy choices”, but an “ugly contest” to pick the least-bad energy mix, says Gillian Tett in the FT. When it comes to transitioning away from fossils to renewables, we cannot let the perfect be the enemy of the good.

Nuclear power may be flawed – it’s expensive and politically risky – but it will be necessary if the world is going to rise to the challenge of halting climate change. “Those governments that continue to shun nuclear plants are haunted by the dirty secret that this move is likely to increase emissions.”

Meanwhile, in finance, ESG funds should be encouraged to embrace nuclear. There was much talk at COP26 of the wave of green money ready to hit markets. If some of that money accepts that “we live in a world of difficult energy trade-offs” – and funds the expansion of nuclear – it “may signal that the climate movement is also beginning to realise that we live in a world with 50 shifting shades of green”.