In News:

• The 2024 edition of the IAEA’s Climate Change and Nuclear Power report has been released, highlighting the need for a significant increase in investment to achieve goals for expanding nuclear power.
• The new report was launched last week on the margins of the Clean Energy Ministerial (CEM) in Brazil.

Key Highlights:

• Nuclear Power's Role in Climate Change Mitigation:
  • Nuclear energy is gaining global interest as nations seek to enhance energy security and decarbonize economies.
  • To meet net-zero emissions by 2050, nuclear power is projected to play a pivotal role, with a projected capacity increase of 2.5 times the current level by mid-century in the IAEA's high case scenario.
• Investment Needs for Nuclear Expansion:
  • Annual investment required to meet the IAEA's high case scenario (2050 nuclear capacity) is USD 125 billion, a significant increase from USD 50 billion annually from 2017-2023.
  • If the aspirational goal to triple nuclear capacity (as pledged by over 20 countries at COP28) is to be met, USD 150 billion annually would be necessary.
  • Challenges in Financing: Upfront capital for nuclear power plants is expensive, posing challenges, especially in market-driven economies and developing countries.
• Private Sector and Multilateral Support:
  • The private sector will need to play a larger role in financing nuclear projects.
  • The IAEA is engaging with multilateral development banks to improve financing options for developing countries to invest in nuclear energy.
  • Private finance initiatives: In September 2024, 14 major financial institutions signaled readiness to help fund nuclear newbuild projects.
• Nuclear Financing at Clean Energy Ministerial (CEM):
  • The IAEA report was launched during the 15th CEM in Brazil, a high-level forum for advancing clean energy technologies.
  • Key stakeholders from Brazil, the IAEA, the International Energy Agency (IEA), and the U.S. discussed strategies for securing nuclear power financing, especially in the context of COP29 (2024) where clean energy financing will be a key focus.
• Nuclear Energy in the EU’s Sustainable Financing:
  • The EU taxonomy for sustainable activities now includes nuclear power, facilitating the issuance of green bonds for nuclear projects in Finland and France (2023).
  • EDF received €4 billion in green bonds and around €7 billion in green loans (2022-2024).
• Investment in Nuclear Power:
  • To meet global climate goals, nuclear power capacity must increase by 1.8 times by 2035.
  • Effective financing mechanisms are crucial to scale up nuclear power and develop the workforce and supply chains needed for the energy transition.
• Policy Reform and International Partnerships:
  • The report advocates for policy reforms and international partnerships to bridge the financing gap and accelerate nuclear power deployment, particularly in emerging markets and developing economies.
  • Focus on technologies such as small modular reactors (SMRs), which could play a role in the energy transition.
• Key Areas to Support Nuclear Growth:
  • Robust regulatory frameworks and new delivery models are essential to unlock investments.
  • Development of skilled labor and effective stakeholder engagement is crucial for the expansion of nuclear energy.
• Energy System Modelling and Planning:
  • The IAEA’s energy system modelling tools assist countries like Brazil in planning nuclear power projects, including cost analyses for electricity generation and financing strategies.

Role of the International Atomic Energy Agency (IAEA):

• Mandate: The IAEA is the leading international body for promoting the safe, secure, and peaceful use of nuclear energy and technologies.
• Functions:
  • Nuclear safeguards: Ensuring nuclear activities remain peaceful and preventing the diversion of nuclear materials for weapons purposes.
  • Assisting member states with technical support, knowledge sharing, and strengthening nuclear safety and security.
  • The IAEA also supports capacity-building and emergency response in case of nuclear or radiological incidents.
• Structure:
  • The IAEA General Conference is made up of all 178 member states, meeting annually to approve budgets and policies.
  • The Board of Governors (35 members) meets several times a year to oversee the agency's activities and appointments.
• Headquarters: Vienna, Austria
  • The IAEA is part of the United Nations family, reporting to both the UN General Assembly and the Security Council.