Authors: Dr. Yannis Bassias and Dr. Yannis Kampouris*
On the Road to Decarbonization
The decarbonization of the economy remains an important goal, particularly for the Western world and is expected to be achieved through the electrification of energy uses and the increasing adoption of Renewable Energy Sources (RES). Recently, this goal faced significant challenges, creating political and social tensions. There is growing debate and intense lobbying on issues related to the shares of different RES technologies, carbon dioxide management, the production of “green” hydrogen and the use of nuclear energy for electricity generation.
The needs of the ‘developing’ world (6.5 billion people versus 1.5 billion in the ‘developed’ world, with about 30% of the global population lacking access to electricity) can be unpredictable. It took about a century for humanity to replace 25% of wood consumption with coal, around 80 years for oil to replace 25% of coal in the global energy mix and approximately 90 years to replace 25% of oil with natural gas. Although the transition to wind and solar energy is perceived by a significant portion of the political and economic elite as occurring much faster, it still accounts for less than 5% of the global energy mix. Their expectation is that natural gas will be the fuel to support the transition to renewables.
However, the growing global electricity consumption needs will not be met in the future solely by supporting gas to renewables. Complementary solutions such as massive electricity storage and nuclear power use are necessary because it is difficult to build a resilient electricity system supported only by renewables. In this context, Small Modular Nuclear Reactors (SMRs) promise to compensate for the lack of electricity storage by supporting base load with a source of much higher energy density and capacity factor than that of natural gas, while offering greater flexibility than today’s large nuclear power plants.
Volatility of the Global Energy Economy
The wars in Ukraine and the Middle East have created turmoil, pushing the EU to broaden its taxonomy of qualified energy sources. From 2022, gas and nuclear energy were included in the list of investments supported by state bodies and affiliated banking institutions. The European Union remains a forerunner in supporting renewable energy sources. However, the shift towards renewables, adopted 20-30 years ago to reduce greenhouse gas emissions and Europe’s dependency on imported fuels, has not yielded significant results neither for the greenhouse gases, nor for the energy dependency from imports.
The economic downturn and the rapid and rather incomplete planning of the energy transformation has driven up energy cost. Unfortunately, this situation pits those concerned about the future of the planet against those worried about their economic survival. The question inevitably arises: can the energy transition be smooth, or does it threaten the economy with recession? This phenomenon could be seen as a modern variant of the iconoclastic era, where behind the images were redistributions of political power, economic dominance, and imposing ideologies.
Electrification and batteries
Global energy consumption is approximately 190 thousand terawatt hours (TWh), primarily dependent on oil, coal, and gas, with no accurate figures for wood combustion. Global electricity consumption represents slightly less than 17% of total energy needs, around 30 thousand TWh. The needs in the “developing” world may be explosive, given that about 30% of the world’s population still lacks access to electricity. According to the IEA and ENTSO, their 2050 scenarios predict that the demand for electricity, as well as fossil fuels and coal, will grow rapidly. For an Electricity System (ESS) to operate smoothly and safely, electricity generation must always equal demand, and traditionally, must be able to follow fluctuations in demand. Electricity generation sources are distributed as follows: 35% from coal, 23% from natural gas, 9% from nuclear, 15% from hydro, 7% from wind, 4.5% from photovoltaic (PV), 2.5% from oil, and 2% from biomass. It is evident that the use of renewables alone cannot achieve this objective, as their production depends on weather conditions rather than human control. The available RES technologies (mainly wind and photovoltaic) are sparse, volatile, and intermittent, given that most available water catchments are already exploited.
Current experience shows that the increase in RES generation, combined with the lack of storage capacity, is leading to increasing curtailments. These curtailments will increase exponentially as the installed capacity of RES increases, making the corresponding investments less attractive and uncertain, while increasing the cost of electricity. At the same time, Combined Heat and Power (CHP) plants face a growing problem of regulation and balancing during sunset (the sunset effect): as the sun sets, photovoltaic stations simultaneously cease to produce while the load increases due to electroluminescence. The loss of generation from PV must be compensated by conventional plants, which must rapidly vary their output. The flexibility of conventional plants to balance generation-load must continuously increase, which is highly unlikely under current technological and economic conditions.
In power systems with high PV penetration, the load curve takes the form of a “duck curve.” As PV penetration increases, there is a sharp rise in the load that must be handled by conventional modules at sunset, causing the curve to resemble a canyon with almost vertical slopes. Duck curves are characteristic of every region in the Western world, and the International Energy Agency (IEA) mentions this effect in all its annual reports, noting that the curves are becoming deeper in several areas of the US and Europe.
To adapt renewable energy production to the needs of the grid, it is currently proposed to store electricity in batteries. Expectations for large-scale pumped storage are low, as most available sites are already exploited. The use of renewables to produce fuels, such as ‘green’ hydrogen, is a new area of technological development. Until there is sufficient storage capacity and/or the means and technology to produce hydrogen from water electrolysis, it is necessary to maintain the use of conventional fuels. Under these circumstances, nuclear power is also making a comeback, as it did in the early 1970s before the 1973 energy crisis. At this juncture, SMRs are seen as the most suitable solution, given the high energy density of nuclear fuels and the significantly greater flexibility of SMRs compared to large nuclear power plants.
Balancing Europe’s Electricity System
By 2050, Europe’s electricity demand is expected to triple from around 2500 TWh in 2022 to 8500 TWh, while over the past decades, growth rates have been in the range of 1.5 to 2%. It is worth noting that this estimation may be moderate since the growing needs of the fast development and relevant applications of Artificial Intelligence (AI) bring the necessity of installing large data centers, which are significant electricity consumers, often in the order of hundreds of megawatts (MW).
Balancing Europe’s electricity system will clearly require large-scale electricity storage solutions, primarily through batteries. However, in a global landscape where everyone is competing for access to critical metals and mineral resources, this seems extremely difficult. Europe, while pushed to electrify transport, heating, and cooling, did not have privileged access to global energy resources, fossil fuels, and critical metals. The sufficiency of the required raw materials, such as rare earths, remains unknown. In the European subsoil, the availability of known deposits is limited, and there are ongoing concerns about the environmental impact of mining, such as the mining of lithium, which is currently the main material used for battery production. In an international competitive landscape, particularly with increasing competition between the dollar and the BRICS countries, careful planning is essential to mitigate the impact on European industry. This includes strategic investments, technological and technical choices, and appropriate supply chain management.
One solution that has been advocated for the interim period until the required means of storage are in place is to strengthen cross-border interconnections in Europe. There are more than 100 bottlenecks identified in the European network that need to be strengthened since 80% of the development of new networks is related to the expansion of renewables.
As shown in the Ten-Year European Network Development Plan (2022 edition by ENTSO-E, the European Network of Transmission System Operators for Electricity), increasing the transmission capacity of cross-border interconnections by a total of 64 gigawatts (GW) requires an annual investment of EUR 2 billion per year until 2030. Additional investments in the next decade (2030-2040), of around EUR 6 billion per year, comprising in cross-border transport capacity, storage, and peaking plants, would bring a decrease in energy costs of around EUR 9 billion per year. However, the implementation of such projects faces extremely long delays (mainly due to public opposition) that can reach decades and are highly unlikely to be implemented in time.
Electrification and Nuclear Energy
Nuclear technologies have been used for decades to generate electricity. Their use in producing thermonuclear weapons, which pose an existential threat to humanity, is the main reason why governments have regulated nuclear energy more strictly than other forms. Before the Covid-19 pandemic, only the conservative part of the Western world strongly supported fossil fuels and nuclear power, developing a deep opposition to renewables. Meanwhile, liberal parts that supported renewables often exaggerated the carbon dioxide emissions and radiation leakage risks of nuclear power plants. In recent years, there has been renewed interest in using nuclear energy for electricity generation, mainly through SMRs.
The renewed interest in nuclear power is reminiscent of the early 1970s before the energy crisis of 1973. In 1971, part of the market predicted that oil would run out, necessitating a transition to nuclear power. That led to the increase in the price of a barrel from 3 to 12-15 dollars and the development of innovative technologies of drilling. Similarities with the current situation are evident, where investments in renewables and storage technologies are financed by the increase in electricity prices. On average, three large nuclear power plants are built worldwide every year, while SMRs aim to offer a complementary solution for continuous high-density power generation without the need for large, costly nuclear power plants and time-consuming installation procedures. In this context, many consumers who were previously opposed to nuclear power generation are now quite happy when nuclear power plants come online, believing that they will reduce electricity tariffs. However, in the IEA’s zero-emissions scenario for 2050, the necessary contribution of nuclear power for 812 GW (refurbished 154 GW, planned 325 GW and missing 333 GW) is estimated to require around $4 trillion by 2050.
Conclusion
The energy transition is a crucial objective of our era. The anticipated costs and impacts of achieving this goal are increasingly controversial, particularly in the Western world. Concerns about the trajectory of energy transformation are evident at the European level in the recurrent National Energy and Climate Plans (NECPs) of EU Member States. While these plans often feature very ambitious targets, they frequently lack detailed information on critical parameters such as resource availability, funding, technological steps, and supply chain capabilities. Regarding the timeframe for this transition, indicative targets are mentioned for 2030 or 2050, but the actual time required for this transformation remains uncertain.
Decarbonizing the economy using only renewables is extremely difficult to achieve without mass storage of electricity in batteries. It is a fact that batteries and SMRs are modular, and the incremental and rapid manufacturing process allows economies of scale in their production, provided a global supply chain and standardization of individual components are ensured. In the current geopolitical and economic landscape, the development of nuclear energy in Europe may serve as a complementary solution to mitigate the challenges that Europe’s electricity systems will face in the future. However, it should be seriously considered as an energy source to support gas in boosting innovative renewable technologies in the coming decades. It is important to note that for batteries and SMRs, there is not yet a complete European operational and environmental protection institutional framework to help integrate them into the energy transformation.
*Yannis Kampouris has a 35 years’ experience in the electricity sector. He served in several positions in Public Power Corporation (PPC), the Hellenic Transmission System Operator (HTSO) and its successor Independent Power Transmission Operator (IPTO). He served as CEO of IPTO (2017). He was the Chairman and CEO of the RSC SELENE-CC (2020-2024). He also was associate professor at the University of West Attica (2002 to 2011). He has published more than 150 papers in international journals and conferences. He is a Distinguished member of CIGRE and a Senior member of IEEE.
