I was reading on disclosure framework of environmentally sustainable activities and wanted to write about on a picky topic of ‘whether Nuclear power or Natural Gas should be considered environmentally sustainable’. My friends in Natural resources and Energy sector must be spending a lot of time debugging the business strategy to achieve Net Zero and a safe transition plan or mechanism to reduce the impact of climate risk. I know it’s a complex issue but my intention is to keep it simple, let me know what you think and what is your view? Do you find EU taxonomy helpful?
In context of European green deal, EU Taxonomy aims to help scale up investments in projects and activities and help investors identify environmentally sustainable economic activities, promote a transition to a zero-carbon future and guide funding towards solutions to tackle the climate crisis and prevent further environmental degradation. The EU taxonomy allows financial and non-financial companies to share a common definition of economic activities that can be considered environmentally sustainable.
Classifying nuclear power or natural gas as environmentally sustainable activities is a subject of debate and depends on various factors and perspectives. I am providing an overview of both sides of the argument as its deeply interesting,
yet in simplest form without much jargon and stats…
1. Nuclear Power:
What’s in Favor:
Nuclear power is often considered environmentally sustainable due to its low greenhouse gas emissions during operation. Nuclear reactors produce electricity without emitting large amounts of carbon dioxide (CO2), which is a major contributor to climate change. Additionally, nuclear power plants have a high energy density and can produce significant amounts of electricity without consuming large amounts of fuel or generating substantial waste compared to fossil fuels. More or less.
Renewables sources like wind and solar power are scaling rapidly, but
there are several challenges in using them to displace coal-fired power.
Like - these sources tend to be decentralized, and require a lot of area
for the power they produce. Sources are intermittent, and therefore will
require a lot more capacity to displace same capacity from a coal-fired
power plant. Certainly, these renewable sources will continue to grow in
importance, but in the short-term, we can’t expect coal-fired power plants
to be replaced with intermittent renewables.
There is a gap! In transition….so what is our bridge fuel?In defense here are the points:
1. Low CO2 Emissions: Nuclear power generates electricity with minimal CO2 emissions, making it a valuable option for reducing carbon emissions and mitigating climate change.
2. Reliable Baseload Power: Nuclear power provides a consistent and reliable source of electricity, which can complement intermittent renewable energy sources like wind and solar.
3. Reduced Air Pollution: Unlike fossil fuels, nuclear power does not produce air pollutants like sulfur dioxide, nitrogen oxides, or particulate matter, which contribute to air quality problems and health issues.
4. Fuel Efficiency: Nuclear reactors can produce large amounts of electricity using a relatively small amount of uranium fuel, reducing resource consumption.
According to the World Nuclear Association, there are about 439 operable nuclear reactors in the world, with a combined power of 389.5 gigawatts (GW), and 56 are currently under construction, which will add 63.7 gigawatts. Currently, USA has the most nuclear power reactors in the world, at 96 total, generating over 800 terawatts of zero-emissions electricity per year. The reactors operate at full power over 92% of the time and have generated about one-fifth of the U.S.’s energy since the mid-1990s. However, in Europe,
France is often cited as an example of successful nuclear energy utilization. The country derives about 70% of its electricity from nuclear power, which has enabled it to achieve relatively low carbon emissions per capita compared to other developed nations.
Here is paper that talks about mortality prevention.
Because nuclear power is an abundant, low-carbon source of base-load power,
it could make a large contribution to mitigation of global climate change
and air pollution. Using historical production data, this team has
calculated that global nuclear power has prevented an average of 1.84 million
air pollution-related deaths and 64 gigatonnes of CO2-equivalent (GtCO2-eq)
greenhouse gas (GHG) emissions that would have resulted from fossil fuel
burning.2. Natural Gas:
What’s in Favor:
Natural gas is considered a relatively cleaner fossil fuel compared to coal and oil. It produces fewer CO2 emissions and pollutants per unit of energy generated. As a transition fuel, it can play a role in reducing CO2 emissions while renewable energy technologies continue to develop.
In its defense -
1. Lower CO2 Emissions: Natural gas emits fewer CO2 emissions than coal and oil when burned for electricity generation, contributing to a reduction in overall greenhouse gas emissions.
2. Flexible Backup for Renewables: Natural gas power plants can quickly ramp up or down, providing a flexible backup for intermittent renewable energy sources, which can help maintain grid stability.
3. Replacing Higher-Impact Fuels: Transitioning from coal to natural gas power generation can result in immediate emissions reductions and air quality improvements.
4. Advancements in Technology: Ongoing advancements in natural gas extraction and utilization technologies, such as combined cycle gas turbines, can improve efficiency and reduce emissions.
Example:
The United States has experienced a significant reduction in CO2 emissions in recent years, in part due to the increased use of natural gas for electricity generation, replacing more carbon-intensive coal-fired power plants.
By contrast, assessment is that large-scale expansion of unconstrained natural gas use would not mitigate the climate problem and would cause far more deaths than expansion of nuclear power.
Methane leaks when gas is extracted, produced and transported, adding
to the warming of the planet. Methane is over 80 times more potent
than carbon dioxide in the first 20 year period so its shorter-term
climate impacts are immense.Both source(s) of energy has its own set of challenges and potential drawbacks. The overall sustainability of nuclear power and natural gas depends on various factors, including safety, waste management, resource availability, technological advancements, and the broader energy transition context. When defending either viewpoint, it's crucial to acknowledge potential concerns and limitations while emphasizing the potential benefits within the current energy landscape.
When we talk about energy transition we must look at the Energy Equity, The idea of energy equity is rooted in principles of social justice, and assumes that affordable and reliable energy should be a fundamental human right and a vital component of reducing poverty and improving our quality of life.
However, Energy equity getting stalled is not helping the situation. The Energy Transition Index has highlighted a drop in equity, which is not just impacting the time it takes to complete the energy transition but also making life harder for people today. WEF report suggests that 75 million people who had recently gained access to electricity can no longer afford to pay for it, and 100 million people are likely to revert to using biomass for cooking – a less healthy and more polluting method of preparing food.
Hoping for better renewable sources of energy that do no harm to the planet and make their use more sustainable here is a bright example.
In Finland, business and industries such as energy utilities, residential & commercial building operators, food & beverages, textile & clothing, chemistry & pharma, metal production and pulp & paper etc. are relying on a solution that uses ‘Sand Battery’. Read it here
I hope people who are in the job of providing advise and consultation on ESG and emerging risks will find this short article interesting.