Emerging economies dominate the growth in demand for all fuels

1. INTERNATIONAL ENERGY AGENCY
Nuclear Power Forum
Manila, 10 December 2010
The role of nuclear power in a
sustainable energy future
François Nguyen
Office of Energy Markets and Security
International Energy Agency
© OECD/IEA - 2009

2. 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
© OECD/IEA - 2009

3. Emerging economies dominate
the growth in demand for all
fuels
Incremental primary energy demand in the New Policies Scenario, 2008-2035
OECD
Coal
China
Oil Rest of world
Gas
Nuclear
Hydro
Other renewables
- 600 - 300 0 300 600 900 1 200 1 500
Mtoe
Demand for all types of energy increases in non-OECD countries,
while demand for coal & oil declines in the OECD
© OECD/IEA - 2009

4. Booming demand for mobility in the
emerging economies drives up oil use
Passenger vehicles in the New Policies Scenario
1 600
Million
China
1 400 Other non-OECD
1 200 United States
1 000 Other OECD
800
600
400
200
0
1980 1990 2000 2008 2020 2035
 Getting the prices right, by phasing-out fossil-fuel subsidies,
© OECD/IEA - 2009
is the single most effective measure to cut energy demand

5. Projected electric and plug-in hybrid
vehicle sales through 2020
9.0
Canada
8.0 Austria
Ireland
7.0
Netherlands
EV + PHEV Sales (millions)
6.0 Sweden
Portugal
5.0 UK
Germany
4.0 France
Korea
3.0
Japan
2.0 Spain
United States
1.0 China
0.0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 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’s
target is for end of 2011). EV/PHEV sales could reach 8 million by 2020
© OECD/IEA - 2009

6. Historical global electricity
consumption
Global Credit Crunch
TWh
20 000
18 000
Dot-com Bubble Burst
16 000
Asian Economic Crisis
14 000
Black Monday Stock Market Crash
12 000
US Recession
10 000
2nd Oil Price Shock
8 000
1st Oil Price Shock
6 000
4 000
End of World War II
2 000
0
1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2009
© OECD/IEA - 2009

7. World Electricity Consumption
(2006 –2030)
© OECD/IEA - 2009

8. Energy-related CO2 emissions in
Baseline and BLUE Map scenarios
Gt CO2 60
Baseline emissions 57 Gt
55 Non-OECD Other Non-OECD 19%
50 countries
Other OME 14%
45
India 12%
40
35 China 27%
30 Other OECD 10%
25
OECD Europe 7%
20
15 BLUE Map emissions 14 Gt United States 11%
10
5
WEO 2009 450 ppm case ETP2010 analysis
2010 2015 2020 2025 2030 2035 2040 2045 2050
 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.
© OECD/IEA - 2009

9. De-carbonisation requires a radical
shift in electricity generation mix
50
PWh
45
Other
40 Solar
35 Wind
Biomass+CCS
30
Biomass and waste
25 Hydro
20 Nuclear
15 Natural gas+CCS
Natural gas
10
Oil
5 Coal+CCS
0 Coal
2007 Baseline BLUE Map BLUE High BLUE High
2050 2050 Nuclear 2050 Ren 2050
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
© OECD/IEA - 2009

10. 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
© OECD/IEA - 2009

11. Evolution of generation mix in IEA
member countries 1974-2008
© OECD/IEA - 2009

12. Average annual electricity
capacity additions to 2050,
BLUE Map scenario
Present rate Gap to reach BLUE Map
Coal-fired with CCS 35 plants (500 MW)
Gas-fired with CCS 20 plants (500 MW)
Nuclear Historical high 30 plants (1 000 MW)
Hydro 2/3 of Three Gorges Dam
Biomass plants 200 plants (50 MW)
Wind-onshore 12 000 turbines (4 MW)
Wind-offshore 3 600 turbines (4 MW)
Geothermal 45 units (100 MW)
Solar PV 325 million m 2 solar panels
Solar CSP 55 CSP plants (250 MW)
0 10 20 30 40 50
GW/ yr
Annual rates of investment in low-carbon
technologies must be massively increased from
today’s levels.
© OECD/IEA - 2009

13. 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.
© OECD/IEA - 2009

14. Philippine primary energy demand by
fuel in the Reference Scenario
© OECD/IEA - 2009

15. Risk and return assessment tends to
favour investments in gas-fired power
plants
© OECD/IEA - 2009

16. 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
© OECD/IEA - 2009

17. A median case: Sensitivity to CO2 cost
Generation costs are site and technology specific. Key parameters
affecting competitiveness include costs of project financing and CO2
prices.
© OECD/IEA - 2009

18. 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
© OECD/IEA - 2009

19. Competitive advantages of nuclear power
Illustrative impact of a
50% increase in fuel
Nuclear is currently the only prices on generation costs
option (excluding hydro) that can
deliver low carbon , base load
electricity at competitive prices 40%
Fuel cost component of nuclear
increase in generating cost
energy is lower than fossil fuel 30%
generation
Nuclear is less vulnerable to
sharp increases in fuel prices and 20%
can contribute to more stable
electricity prices
10%
Carbon pricing improve the
competitiveness of nuclear
0%
Nuclear IGCC Coal steam CCGT
© OECD/IEA - 2009

20. 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
© OECD/IEA - 2009

21. Thank you for your attention
© OECD/IEA - 2009