26/03/2025

Nuclear Power Plants in Perspective

Given the surge in electricity consumption over the past decade—twice the rate of overall energy demand growth in the same period—and the pressing need to generate power from low-emission sources, the global outlook for expanding nuclear energy production in the short and medium term appears increasingly favorable.

Without going into detail about the specific characteristics of nuclear power generation, it is important to highlight that it serves as a baseload source, capable of producing electricity continuously with capacity factors close to 90%. It is the world's second-largest source of low-emission energy (after hydropower) and, even with the welcomed exponential growth of renewable energy sources, generates 20% more electricity than wind power and 70% more than solar photovoltaics.

Currently, more than 400 reactors operate worldwide, generating slightly less than 10% of global electricity. This share has declined by nearly half since the 1990s, due to a combination of factors, chief among them the impact of nuclear accidents—Three Mile Island, Chernobyl, and Fukushima—on public opinion.

The installation of nuclear power plants has continued, although some countries have excluded nuclear energy from their energy strategies. Nevertheless, more than 60 nuclear plants are currently under construction in various nations. A key trend in recent years is the shift in nuclear development from advanced economies (the U.S., Europe, Japan) to developing countries and emerging economies, where Chinese- and Russian-designed reactors dominate. Additionally, the existing reactor fleet in advanced economies is aging, while in developing economies it is significantly newer, with China at the helm.

In this context, two key factors play a dominant role in shaping national energy policies: climate change and energy security in uncertain scenarios.

Concerns about climate change and its increasingly evident effects on the global economy are reflected in concrete policies and national commitments to limiting pollutant emissions. The growing shift toward electrification is a direct consequence of this reality, driving the accelerated replacement of fossil fuels, particularly in air conditioning and transportation. These factors will be key drivers of rising demand for electricity in the short and medium term. The energy demand of data centers, linked to the near-disruptive emergence of artificial intelligence (AI) in daily life, currently remains marginal—accounting for less than 1% of global electricity demand. While its growth is significant, its impact will largely be localized in the medium term. In fact, in some countries, such as Ireland, and certain U.S. states, data center demand already exceeds 20% of total electricity consumption.

In this regard, it is worth noting that data centers require a highly stable and clean energy supply, which coincides with the performance of nuclear power plants, and explains why several major companies associated with AI applications have announced varied agreements to secure nuclear-based energy sources, particularly from small modular reactors (see below).

Energy security is another increasingly crucial factor in the planning of national energy strategies, which enhances the value of nuclear energy as an option. Nuclear power relies on uranium, a resource that is not only widely distributed in the Earth's crust (unlike gas and oil) but also generates energy without combustion, meaning it produces no CO2 emissions. For this reason, despite its small share in the global electricity mix, nuclear energy is the second-largest source of clean power, after hydropower.

In summary, conditions are favorable for the installation of nuclear power plants, as they help address the long-term challenge of climate change, which will require a coordinated global effort. At the same time, they serve as a safeguard for energy supply amid a highly volatile global situation with multiple conflict hotspots in regions critical to the world economy.

Nuclear power generation is an established commercial activity that has evolved with increasingly sophisticated conceptual designs, leading to the development of different "generations." These generations have progressively incorporated stricter safety and reliability standards. Like any industry, particularly analogous to aviation due to the high levels of quality required, it has benefited from extensive operational experience and, more importantly, the lessons learned from the major accidents mentioned earlier. The outcome of this process is that the electrical generation reactors installed in recent years belong to the so-called Generation III+ (GIII+), which include several improvements and optimizations over the global operational nuclear fleet. These are the reactors that are expected to be installed at the beginning of the energy transition process, complementing an increasing share of variable renewable energy (wind and solar) in electricity grids.

At the same time, there is a highly interesting process of extending the lifespan of nuclear plants in operation, which are reaching the end of their designed operational life (30-40 years). In most cases, it is considered that the state of the facility is such that, with significant but relatively minor modifications compared to building a new plant, its life can be extended for another 20-30 years. This involves replacing steam generators and other key units or components that have reached the end of their useful life. This process aligns with the concept of optimizing the use of available resources and results in a cost reduction for the overall project, which also translates to lower energy costs when the life extension costs are factored into the cost evaluation.

Regarding the evolution of current designs, two main conceptual lines can be highlighted, each aimed at addressing different requirements of electricity generation.

The reactors known as Generation IV (GIV) are new large-scale reactors (greater than 300 MW) designed to replace those of the current generation (GIII) through new designs and fuel cycles aimed at optimizing various aspects of nuclear generation: improving fuel utilization, reducing waste, lowering generation costs, enhancing safety, and so on. These represent a wide range of designs, but none have operational experience. China and Russia have built some prototypes, although mass production and commercial deployment are still far off.

The small and medium sized reactors (with a capacity of less than 300 MW), known as SMRs (Small Modular Reactors), represent another developing family that has gained greater relevance in recent years due to the interest from private investors. This nuclear project, once mass production is reached, results in significantly lower construction costs, including 'overnight' costs, construction timelines, and accumulated interest during the build process. The origins of this type of reactor are quite old, and the concept was initially developed for special applications such as naval propulsion, supplying power to remote locations, and so on. Its main merit was the intrinsic safety offered by the ability to cool the core without the need for mechanical power. Recently, the reduction in capital costs associated with lower power output and modular manufacturing has been revalued to encourage private sector participation in financing. Again, operational experience is limited and concentrated in Russia and China.

The scenario described, which reestablishes nuclear technology as a key player in electricity generation, faces several obstacles that must be properly addressed:

The construction, operation, and decommissioning of nuclear power plants, as well as responsibility for nuclear waste, have primarily fallen under the authority of national governments. This has been the case in developed countries and remains so today, in a context where nuclear energy development is predominantly led by countries with developing economies. Attempts at privatization in some Western countries have largely failed, except in certain specific (and clearly profitable) aspects of the fuel cycle.

There are several reasons for this. First, nuclear technology is highly complex and requires significant regulatory and support infrastructure, with strategic implications that go beyond electricity generation. It is inconceivable for private investors to fully account for these factors when assessing the opportunity cost of a nuclear project. Such considerations are only feasible within a national-level planning process. Furthermore, nuclear projects typically involve high capital costs and long payback periods (20 to 30 years), making them less attractive to private investors.

This makes SMR projects more viable for private sector participation. An added factor is that most designs envision these plants as a combination of multiple smaller units, which would allow electricity generation to begin before completing the entire project, enabling an earlier start to capital recovery.

However, it is important to emphasize that there is no operational experience with this type of reactor, and this experience is essential to achieve design maturity and commercial deployment. Therefore, despite various announcements of agreements between SMR developers and private companies (primarily to supply data centers), it is probable that in the coming decades the deployment of nuclear power plants will continue to be dominated by the current generation, with design improvements (GIII+).

On the other hand, it is unlikely that national governments will withdraw from their leadership role, even though various initiatives encourage private sector participation. Moreover, government presence serves as a guarantee and an incentive to encourage private sector participation.

A nuclear power plant has high capital costs but very low operating and maintenance costs, in contrast to conventional fossil fuel plants. In all cases, it is crucial to ensure the proper functioning of the supply chain. Nuclear plants are facilities with very long operational lifespans (30-40 years), and recent developments show that their useful life can be extended (by an added 20-30 years), at costs much lower than building a new unit, making the overall project much more profitable. Securing the supply of fuel and all the necessary components for repairs and replacements during the plant's lifespan is a considerable challenge.

In developed countries, especially in the West, nuclear reactors are generally quite old. The workforce is also aging, with many workers nearing retirement. The lack of new projects has slowed training in nuclear-related fields in many countries, creating a need for renewed focus on education to develop the technicians and professionals needed by the nuclear industry.

In light of this situation, what is Argentina's position? Are there options and opportunities in the nuclear field?

The development of nuclear power generation in Argentina went through a critical period of capacity loss since the decision to halt construction of Atucha II in 1994 until its restart 12 years later. Completing the project was an extraordinarily complex process that had to overcome not only the challenges associated with the original designer's withdrawal from the nuclear sector but also the demanding task of rebuilding essential engineering capabilities for the construction and assembly phases, developing local suppliers for various nuclear-grade components, and more. This process, which successfully concluded in 2014 with a fully operational plant, serves as a clear example of the consequences of discontinuity in such projects.

Argentina’s current nuclear landscape includes the construction of a small modular reactor (SMR) prototype, the CAREM, as well as an undefined project for one or more new nuclear power plants. Regarding the latter, the main alternative under consideration is an agreement with China—the only available financier—which entails purchasing a Chinese-designed enriched uranium reactor, followed by the construction of a CANDU-type plant, similar to the Embalse Río III facility, the country’s second operational nuclear power plant.

An agreement with China, which offers clear advantages in terms of financing and China’s proven history in meeting construction deadlines—crucial for controlling final project costs—raises several questions. One key concern is the challenge of securing a technology transfer agreement for closing the fuel cycle, specifically for local fuel production. Until now, this has been a non-negotiable policy for Argentina and continues to be highly significant in the current global context.

It is clear that both the CAREM project and a large-scale nuclear plant are necessary and complementary initiatives, as they both fit—albeit at different stages—into the long-term energy transition process, which is primarily driven by electricity production.

The possibility of using Argentina’s existing license to construct a domestic Embalse Río III-type nuclear plant gains renewed significance, given the country’s well-established capabilities—demonstrated through the successful completion of Atucha II and the 30-year life extension of Embalse Río III. However, this requires exploring alternative financing options. Argentina has several strategic advantages. Among them is a heavy water plant capable of supplying this scarce resource to existing CANDU-type reactors, which will continue to be deployed in improved versions. Additionally, the country has a long-standing tradition of training highly skilled professionals in the nuclear field—an uncommon asset among developing economies. Lastly, Argentina possesses essential and highly sought-after natural resources critical for the energy transition. These resources should be leveraged in exchange for cutting-edge technology and advanced manufacturing localization to create skilled jobs and prevent the country from being increasingly relegated to the role of a mere supplier of raw materials.

The goal of maintaining and expanding relative technological independence should not be abandoned, as it has been clearly shown that doing so offers no long-term advantages, quite the opposite. Diversifying partnerships is essential to avoid becoming entangled in the geopolitical confrontation between the U.S. and China. The growing interest of developed nations in reclaiming a leading role in nuclear energy, driven by the challenges of climate change, positions Argentina as a highly valuable partner.

The Argentine physicist, Carla Notari, is the Dean of the Dan Beninson Institute of Nuclear Technology (IDB) at the National Atomic Energy Commission (CNEA) / National University of San Martín. She leads a postgraduate program and holds a permanent research position as Senior Consultant at CNEA and is also a full member of the CNEA Academic Council.