47 / 386
BUSINESS OVERVIEW
06
6.1 Markets for nuclear power and renewable energies
On a global scale, nuclear power has already avoided the release of approximately
57 billion metric tons of CO
2
since 1971, equivalent to almost two years of global
emissions at current levels (
source: WEO 2015
).
Faced with the climate issue, nuclear power is increasingly proving to be an
essential component of the energy mix, producing baseload electricity that supports
sustainable economic and social development.
Competitiveness of nuclear power
Nuclear power generation costs are not very dependent on the price of uranium.
The percentage of raw materials in the total cost of nuclear power (at net present
value) is minimal, and the impact of a doubling of uranium prices on the full cost
of power generation in new power plants is only about 5%.
Conversely, the price of fossil energies has a very strong impact on the cost of
the electricity generated in thermal power plants fueled with coal and especially
natural gas. In fact, natural gas fuel represents 70 to 80% of the total cost of the
electricity generated by a combined cycle gas turbine. The price of carbon is also
an important component in the cost structure of gas-fired power plants, and even
more so for coal-fired plants, but it has zero impact on the cost of nuclear power.
Short-term gas and oil prices can fluctuate widely as they are subject to financial,
economic and geopolitical risk: a very high level of uncertainty about production
costs (deep offshore, shale gas, etc.), economic environment (financial crisis
followed by an economic crisis), and financial speculation in the commoditymarkets.
Nonetheless, the consensus is that there is a long-term upward trend due to rising
demand, the shift from coal to natural gas and the depletion of conventional
resources. Regional imbalances exist, however, especially for natural gas.
Fluctuations in supply and demand therefore remain the key determining factors
in fossil fuel price trends.
While gas prices are high in Europe and Asia, this source of energy has become
very cost effective in the United States thanks to the shale gas made available
by new technologies such as hydraulic fracturing and horizontal drilling. Still,
substantial uncertainties remain as to its price volatility, its competitiveness in other
regions, potential reserves, and the acceptability of the potential environmental
consequences of its extraction, such as ground pollution and the significant use
of fresh water resources.
In Europe, shale gas productionmay appear attractive in viewof the region’s growing
dependency on imported gas. However, there are several obstacles to developing
shale gas on a large scale: the difficulty of accessing the deposits in some cases,
the lack of harmonization in the regulatory systems of European countries, and
much higher development costs than in North America.
In Europe, carbon prices remained low in 2016, in particular because planned
EU-ETS
(1)
reforms will take several years to be put into practice. However, increasingly
stringent commitments in terms of emissions reductions are expected to push
carbon prices up in countries where a regulated carbon market has already been
established, while in other countries, carbon restrictions appear to be unavoidable
in the medium to long term.
Thus, the volatility observed in commodity markets and the uncertainty surrounding
the price of carbon make it difficult to predict the cost of electricity generated with
gas or coal.
For countries that export fossil energy, nuclear power helps secure current and
future income for national budgets: the resource extracted can be used to generate
cash from exports rather than using it to produce electricity locally.
(1) European Union Emission Trading System: the European system to trade emission quotas.
OIL PRICE SCENARIO
0
$
2015
/ barrel
140
120
100
80
60
40
20
2015
2030
2020
2040
Source:WEO 2016.
COAL PRICE SCENARIO
120
60
20
40
80
0
2015
2030
2020
2040
100
$
2015
/ ton
Source:WEO 2016.
2016 AREVA
REFERENCE DOCUMENT
47