POLICY & FINANCE | IEA MARKET REPORT
IEA reports boost for nuclear market
Underlying market fundamentals point to continued growth in new nuclear capacity
THE IEA’S RECENTLY RELEASED ELECTRICITY 2024 report market analysis and forecast to 2026 reveals a positive outlook for nuclear generation on the back of projections for surging growth in electricity demand. The report notes that while global electricity demand
rose only moderately last year – with falling consumption in advanced economies limiting demand growth to 2.2% – it is set to grow much faster through 2026, average 3.4% annually during the forecast period. According to the IEA, these gains will be driven by an
improving economic outlook, which will contribute to faster electricity demand growth both in advanced and emerging economies and supported by the ongoing electrification of the residential, transport and data centre sector, notably in advanced economies and China. Meanwhile, the share of electricity in final energy
consumption is estimated to have reached 20% in 2023, up from 18% in 2015. However, the IEA notes that while this is progress, electrification needs to accelerate rapidly to meet the global decarbonisation targets. In their Net Zero Emissions by 2050 Scenario – a pathway aligned with limiting global warming to 1.5 °C – electricity’s share in final energy consumption in fact nears 30% in 2030. Nonetheless, they already forecast that electricity
consumption from data centres, artificial intelligence (AI) and the cryptocurrency sector could double by 2026 with data centres alone consuming an estimated 460 TWh in 2022, and potentially reaching more than 1,000 TWh in 2026, roughly equivalent to the electricity consumption of Japan.
Nuclear and renewables driving future energy demand Given the fundamentals for demand growth, the report notes that the rapid growth of renewables, supported by rising nuclear generation, is set to displace global coal-fired generation, which is forecast to fall by an average of 1.7% annually through 2026. Coal-fired generation in China is currently on course to experience a slow structural decline, driven by the strong expansion of renewables and growing nuclear generation, as well as moderating economic growth, the IEA says. Meanwhile, nuclear power is on track to reach a new
record high by 2025 and by then is forecast to exceed its previous record set in 2021. The IEA analysis observes that even as some countries phase out nuclear power or retire plants early, overall nuclear generation is forecast to grow by close to 3% per year on average through 2026 as maintenance works are completed within France, Japan restarts nuclear production at several power plants, and new reactors begin commercial operations in various markets, including China, India, Korea, and Europe. Furthermore, the IEA report says, many countries are making nuclear power a critical part of their energy strategies as they look to safeguard energy security while reducing greenhouse gas emissions. The report points to the December 2023 COP28 climate change conference where more than 20 countries signed a joint declaration to triple nuclear power capacity by 2050 as evidence for the sustained growth in nuclear generation over the coming
Above: China is looking to build its nuclear capabilities with a view to developing an export market Source: IAEA/China National Nuclear Corporation, Fuqing Nuclear Power Company
44 | July 2024 |
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