OECD Observer
Which energy source?

Nuclear power today is an important part of the current energy mix, providing nearly a quarter of power generation. However, its future is uncertain, according to a new book published by the International Energy Agency, Nuclear Power in the OECD Countries, which reviews the status and prospects for nuclear power generation in OECD countries.

In the immediate future, the only OECD countries where new nuclear plants are expected are Japan, Korea and possibly Finland. While existing nuclear power plants are generally in a sound economic position, their high capital costs together with today’s relatively low fossil fuel prices mean that new plants face formidable competition from fossil fuel generation. Indeed, the IEA’s World Energy Outlook 2000 projects that by 2020, nuclear power’s share of OECD electricity will fall to 14%,

dwarfed by the contributions from coal-fired generation (36%) and natural gas-fired generation (31%) and will be only slightly larger than that of hydropower (12%). Renewable energy sources other than hydropower, including wind, solar and biomass are expected to double their share over the period, but these sources will account for only 4% of OECD power generation by 2020, and much of the increase will be stimulated by policy incentives.

Other considerations, like having a secure energy supply, have influenced the current mix of generating plants, such as in those countries that have developed nuclear power in the past but also, more recently, in those that favoured developing renewable energy sources. Environment and plant safety concerns have influenced decisions too: almost half of OECD countries have placed legal or policy restrictions on building new nuclear power plants. Disposal facilities for high level nuclear waste are under development, but face technical and political hurdles. Nonetheless, the future of nuclear power and renewable energy would improve if their capital costs fell or if fossil fuel prices climbed.

©OECD Observer No 226/227, Summer 2001