Beyond Electricity: The Economics of Nuclear Cogeneration

Article orginally posted on the NEA website.

Nuclear energy is an important source of low-carbon electricity and plays a significant role in avoiding carbon emissions. It has the potential to contribute further to the decarbonisation of the world’s energy sector if it is also used to provide heat for industrial applications, which today mainly run on fossil fuels. The feasibility of non-electrical applications of nuclear energy has already been demonstrated through decades of experience with approximately 67 reactors around the world (representing about 15% of the world’s reactors) providing either district heating, desalination or some other form of process heat. However, to date, cogeneration applications have used only a small fraction of nuclear energy. Existing reactors can supply thermal energy for industrial applications at less than 300ºC. The advanced reactors that are being developed now would reach outlet temperatures many times higher, making them suitable for cogeneration applications over a wider temperature range. Nuclear cogeneration can also enhance the flexibility of electricity supply in combination with high levels of renewables.

A group of experts from the Nuclear Energy Agency (NEA) member countries was convened to investigate the challenges and opportunities for nuclear cogeneration. The economic competitiveness of nuclear thermal energy was one of the focuses of the ad hoc Expert Group on the Role and Economics of Nuclear Cogeneration in a Low-Carbon Energy Future. The group recognised that cogeneration applications of nuclear energy are more likely to develop if they are more economical than the technical solutions they replace, namely gas-fired production of steam and electricity. A solid understanding of the economics of nuclear cogeneration, including the associated system costs, is essential. However, there is no clear methodology to assess the economic case for developing non-electrical applications of nuclear energy, even though there are proven examples of developing such applications on an industrial scale, especially for district heating. In addition, while this report focuses principally on cogeneration, it also highlights the significant potential of nuclear power, when coupled with thermal storage, to support the integration of variable renewable energy sources. While this type of system does not have to be integrated with cogeneration applications, doing so can further improve its economics and climate mitigation potential.

The purpose of this study is to fill this methodology gap by reviewing existing research and proposing an approach that can help assess the costs and benefits of developing other products besides electricity. This study also aims to assess the potential of nuclear energy to play a role in decarbonising the energy sector beyond the sole power sector by reviewing different cogeneration applications. The expert group contributed case studies demonstrating the feasibility  and economics of nuclear cogeneration in various member countries. It found that nuclear energy is well placed to play a role in meeting global decarbonisation targets by providing thermal energy for industrial applications.

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