2023 Map: The World Wants Nuclear Energy. China and Russia are Racing Ahead.
Demand for nuclear energy worldwide is growing, and in an effort to expand their spheres of geopolitical influence, the Russian and Chinese governments will actively aid their industries to win overseas deals. This playbook has been effective: both Russia and China lead the US in terms of the number of agreements with sales of nuclear energy hardware and services attached. All is not lost, however—we have supportive agreements with numerous countries that are interested in nuclear energy and are ready to deploy in the near term. It is vital to our climate, energy, commercial, and national security interests to seize such opportunities by implementing smart policies, including strengthening interagency coordination and expanding our federal toolkit to finance projects abroad.
Global demand for affordable, reliable, secure, and clean energy is soaring because of rising security concerns and ambitious climate commitments. Due to this, we project a potential global market for nuclear energy that can range in the hundreds of billions of dollars by midcentury. The United States is home to numerous promising advanced nuclear projects that could meet this large commercial demand.
But the global nuclear market is not just a commercial opportunity, the stakes are much greater. Two of our primary competitors also happen to be major geopolitical rivals: for Russia and China, nuclear exports are not just lucrative, they are an effective means of entrapment and exerting geopolitical influence. When Russian and Chinese state-owned nuclear companies export nuclear hardware and equipment, they get to set the standards on safety, security, and nonproliferation. Also, Russia and China usually structure their deals with long-term financing and fuel supply, meaning they are an avenue to cementing long-term ties and exporting their values as well.
Accordingly, our ability to compete in this market means more than just jobs and wealth; our very security and democracy is on the line.
The US was once the dominant global supplier of civil nuclear technologies, but that market position has since eroded with the emergence of new international vendors. We must compete in order to secure the myriad national interests at stake with this market: trade, climate, energy and national security, geopolitics, nonproliferation, and more. And smart federal policies and prudent public-private partnerships will be essential to ensuring that we have a competitive edge.
“...our ability to compete in this market means more than just jobs and wealth; our very security and democracy is on the line.”
Nuclear Cooperation Agreements Map
Building upon a multi-year collaboration in mapping and projecting the global market for advanced nuclear, Third Way and Energy for Growth Hub are pleased to present a new map tracking where three major supplier countries—the US, Russia, and China—have both supportive and concrete agreements for nuclear exports.
For this map, nuclear agreements concluded by these three suppliers are subdivided into two major categories:
- Hard MOUs: Agreements that include terms or contractual concurrence on nuclear plant construction, export of hardware or reactor components, or services necessary or relevant to the operation of nuclear power facilities—including fuel supply, recycling, waste management, and decommissioning.
- Soft MOUs: Agreements that do not contain explicit terms on actual exports of nuclear reactors and related services, but are intended to be supportive of nuclear energy deployment and civil nuclear development. These MOUs may include agreements on knowledge-sharing, training, institution of regulatory frameworks, etc. Agreements exclusively focused on uranium supply were not included in this category.
More details on the methodology for the map are available here.
The tooltips in the map will not only reveal partner country name and the type of MOU signed (hard or soft), but will also include data on the date of the agreement and market readiness assessments from our latest global markets map. The full database for the map can be found here.
Background on Nuclear Cooperation Agreements
The geopolitical value of nuclear trade and commerce means that Moscow and Beijing are actively involved in helping their state-owned enterprises win reactor build projects abroad. This means carrying out commercial diplomacy—engaging with and cultivating prospective markets well in advance and utilizing government-to-government concessions to facilitate export deals at key stages. Russian nuclear export deals, for example, often come with aggressive diplomatic support and generous financing terms.
One of the means by which these governments can “plant the flag” on nuclear commerce is through bilateral agreements on civil nuclear cooperation. Typically, these agreements will define the scope and boundaries of cooperation on nuclear technology. They will range from intergovernmental agreements on reactor sales to memoranda of understanding on information sharing, capacity building, and other support for countries interested in new nuclear energy programs.
For some countries, such as the United States, certain bilateral agreements are required before major nuclear hardware and equipment can be exported. According to the Atomic Energy Act (AEA), 123 Agreements must be concluded with a partner country before reactor components and nuclear material can be transferred. Such bilateral agreements also generally establish the “rules of the game,” binding international partners to various standards, commitments, and assurances related to the secure and peaceful use of civil nuclear technologies. For example, 123 Agreements require US partners to maintain International Atomic Energy Agency (IAEA) safeguards on all civilian nuclear activities, assure adequate physical protection of nuclear facilities, restrictions on enrichment and reprocessing, and so forth.
Russia and China are engaging internationally, and we must respond.
While the primary intent of Section 123 of the AEA is to erect guardrails around the use of exported nuclear technologies, such bilateral agreements are also powerful tools that can pave the way for future commercial deals—and thus also avenues of geopolitical influence. Motivated by the latter, the Russian and Chinese governments will use various diplomatic instruments—ranging from preliminary MOUs to more comprehensive cooperative agreements—to support their respective state nuclear companies in winning overseas deals.
Even if commercial opportunities are not immediately available, such agreements on civil nuclear cooperation can cultivate future markets and steer countries towards certain suppliers. For instance, Moscow and Beijing use collaborative R&D arrangements to familiarize partners with their respective technologies. Through these arrangements, Russia and China invite students from partner countries to train and study at domestic universities and institutes. Ultimately, these efforts can influence the decision of client states once the procurement of civil nuclear technologies begins in earnest.
Therefore, it is vital for the US to be active and strategic in exploring, negotiating, and concluding such cooperative bilateral agreements. Not only do they open access to markets, they also help reinforce the highest international standards in safety, security, and nonproliferation which the US has led in building up over decades. Even in countries where there may not be an immediate market opportunity, Nuclear Cooperation Memoranda of Understanding (NCMOUs) and participation in US-led multinational forums can establish the institutional groundwork for civil nuclear programs and help shift these markets towards opting for American vendors. Case in point, the US recently signed an NCMOU with the Philippines to deepen cooperation on nuclear science and technology—as well as increase the likelihood of a commercial partnership down the road.
The data from the map, as well as recent developments, point to key takeaways that should elicit the attention of policymakers and drive concerted action:
The Bad News: Russia and China are leading in hard agreements, and their presence in international markets is growing.
- The data is consistent with assessments from the last several years that Russia is by far the world’s leading exporter in nuclear power plants in terms of reactors planned and under construction—Russia has hard MOUs with 45 different countries. In comparison, the United States only has 12 such agreements.
- In spite of international condemnation over its invasion of Ukraine, Russia’s global market share in nuclear energy continues to grow.
- Even though its emergence as a global nuclear supplier has been relatively recent, even China leads the US on hard agreements with 13. China is also planning ambitious buildouts of nuclear domestically, giving it a significant industrial base for export.
The Good News: many US partners with soft agreements are viable markets in the near term (and want American technology).
- The US has a considerable number of soft agreements (48), a significant portion of which are with countries that are either ready or potentially ready for nuclear power by 2030 based on assessments made in the Third Way-Energy for Growth Hub global advanced nuclear market map. Twenty-nine countries that have concluded supportive agreements with the US are viable near-term markets.
- Not only are many of these countries ready for significant nuclear energy deployment, demand for nuclear energy, especially American nuclear technology, is soaring globally as energy security concerns become paramount and the imperative to decarbonize grows.
- Many of the countries that want to buy American reactors also need robust export financing packages. Commitments from the federal government to support robust financing arrangements, such as the letters of intent to lend up to $4 billion for nuclear projects in Poland, are urgently needed to meet current international demand.
The assertive actions of our rivals in the global nuclear market and growing international demand for American reactors pose both challenges and opportunities. Smart policies, as we outline below, will be needed so the US can rise to the occasion.
Make government agencies work together.
Competition in the international nuclear energy market is high politics. To rise above the competition, we need a coherent and strategic vision to guide our policies on nuclear energy and civil nuclear exports. Thus, we have strongly argued for the need to reestablish the White House civil nuclear director position within the National Security Council (NSC). A position exclusively dedicated to civil nuclear issues within the White House can better coordinate nuclear energy programs and initiatives across the interagency and formulate a cohesive strategy to engage with overseas partners so American industry can win export deals. The recently introduced International Nuclear Energy Act of 2023 would also help institutionalize such high-level coordination by supporting the establishment of an office within the Executive Office of the President to be the focal point on nuclear energy and civil nuclear export issues. Enhanced federal coordination on civil nuclear can allow us to more proactively seek opportunities for international cooperation, address bottlenecks in export control processes, and tighten public-private partnerships so that we can win internationally.
Develop robust and comprehensive export financing packages.
Enhanced interagency coordination will facilitate the development of more comprehensive financing arrangements to support civil nuclear exports. Rallying different federal agencies— such as Export-Import Bank (EXIM), the US Trade and Development Agency (USTDA), and the US International Development Finance Corporation (DFC)—with various tools and solutions at their disposal will be needed to provide strong financing packages so that we can meet the clear and immediate demand for US reactor technologies today. In the longer term, legislative changes—such as the inclusion of nuclear energy in the list of Transformational Export Areas under the China and Transformational Exports Program (CTEP) at EXIM—can help us directly compete with our rivals as competition intensifies in the future.
Proactively engage with new nuclear nations and build capacity for civil nuclear programs.
The federal government has a unique role to play in engaging with potential markets where there may not be immediate commercial opportunities. Helping these countries with training, capacity building, and assistance in developing regulatory regimes can both move the needle forward on nuclear energy deployment and foster relationships with American officials, industry, etc. Redoubling efforts and resources into programs like the Foundational Infrastructure for Responsible Use of Small Modular Reactor Technology (FIRST) at State Department and international activities by the US Nuclear Regulatory Commission (NRC) can help new civil nuclear programs operate under the highest international standards of safety and security and create market opportunities for US industry in the future.