Nuclear energy has been moving away from power-rich countries to nations bereft of diverse power generation opportunities, all the more so after the 2011 Fukushima disaster. Europe has been particularly susceptible to give heed to the nuclear panic. Germany, for instance, announced its plans to phase-out nuclear power a day after Fukushima, France went along in a matter of several months, Switzerland and Belgium have also since voted to pull the plug on nuclear. Against the background of nuclear safety technologies having reached unparalleled heights and the global community edging closer to reducing carbon emissions, it is perhaps surprising that nuclear ended up being effaced from Europe’s energy future. Are all the hurried phase-outs worth it?
With the election of Emmanuel Macron as France’s president and the inauguration of the Édourard Philippe-led government, the assault on nuclear energy took a new turn. Despite the fact that most Frenchmen oppose shutting down the country’s nuclear reactors, Macron seems to move in the opposite direction striving to bring down nuclear energy’s share to 50 percent in France’s electricity production. Right after Fukushima, Germany shut down 8 of its oldest reactors and envisages to close the remaining 9 by 2022. This happened in defiance of the government’s initial plans to phase the remaining nuclear plants within the 2030-2036 interval and the Reactor Safety Commission’s judgement that all functioning nuclear plants are safe and sound. Spain, Belgium and Switzerland are phasing out their nuclear reactors, too, albeit with less ambitious deadlines, while Italy, Austria, Portugal and others have reiterated their intentions to stay nuclear-free. Related: Venezuela’s “Oil Fire Sale” To Benefit Russia, China
France’s intention to close 17 out of 58 nuclear reactors stands out as unduly ambitious aim. This would imply deactivating 17GW, roughly the aggregate of its wind and solar capacities. As both wind and solar are intermittent, France would need at least a doubling of its renewables capacities, which is quite difficult to imagine given that the Nicolas Hulot, the new Ecological Transition minister, has set a 2025 deadline. Labour market considerations will also have a bearing on energy policy issues. France has 450 000 people working both directly and indirectly in the country’s nuclear sector, whilst wind and solar, the two renewables assumed to offset the phased out capacities, employ only 20 000. Firing 100,000 workers will not go down well in a highly trade union-conscious society. Moreover, bolstering wind energy would most probably lead to huge contracts being awarded to German and Danish companies (whereas in nuclear France had a “national champion”), which is tantamount to political suicide.
Germany’s approach to phasing out nuclear energy is not flawless, either. Angela Merkel’s government vowed to close all its nuclear reactors by 2022, overwhelmingly supported by the population and virtually all political parties across the national spectrum. The nuclear phase-out overlaps with coal being gradually eliminated from Germany’s energy matrix (here the timeline is assumed to be 2050) and it is here that the problem arises. Berlin has set itself quite stringent emission reduction objectives – it aims for a 80-95 percent reduction in greenhouse gas emissions by 2050 compared to a 1990 base level. Phasing out coal, a highly polluting source of energy that amounts to 42 percent of federal electricity generation, will inevitably lead to increasing imports and higher wholesale prices. New gas capacities – gas is expected to play the role of the transitory energy source until renewables can be implemented without massive subsidy schemes – will come online only after 2025. Nuclear energy could have furthered a swifter ditching of coal in Germany, alas, precedence was given to the latter.
It has to be said that the United Kingdom represents a notable exception from the general Western European trend of not building any further nuclear reactors. The UK will phase out all its coal plants by 2025 yet in the meantime, in stark contrast with continental Europe, will add 14 GW new-generation nuclear capacity. London’s perseverance with nuclear energy (now around 20 percent of total electricity generation) does in no way impede the development of renewables in the UK, with wind energy expected to increase almost fivefold by 2025 from 5 GW to 23GW, wave and tidal energy gradually breaking into the cost-effective zone. By getting rid of coal- and oil-powered energy and placing its bet on gas and nuclear instead, all the while developing its renewable energy sources where profitable, the United Kingdom is making great strides in attaining a non-polluting energy matrix.
Wholesale and retail electricity prices seem not to worry politicians when deciding to phase out nuclear energy, for no good reason. In the past few years France’s electricity prices were 40-50 percent lower than Germany’s, largely thanks to the fact that France had abundant nuclear capacities and did not embark upon a massive solar energy subsidization course. However, keeping electricity prices low, as it turns out, is not necessarily bad politics. Hungary’s ruling FIDESZ party has made lowering electricity prices its rallying cry and positioned the Paks-II project (construction of 2 new 1200MW reactors) as an optimal vehicle to lower costs and achieve energy self-sufficiency. Turkey pursued similar objectives with the Akkuyu nuclear project, also built and financed by Russia’s Rosatom, with the electricity purchase price fixed for the first 15 years. If everything remains as it is now, in the early 2020s, when nuclear energy and part of coal had been eliminated, yet new equivalent capacities will be still under construction, Germany might witness a change of mind on the back of rising electricity bills.
Apart from issues related to the energy matrix of European nations, it should be noted how frail Western nuclear companies are. On the back of US giant Westinghouse filing for bankruptcy, the Trump administration seems to be more intent on reviving the coal industry than the faltering nuclear one. France, which similarly is both a nuclear technology provider and consumer, has been witnessing the decline of its nuclear national champion AREVA that was technically bailed out by the French government, failing which it would copy Westinghouse’s fate. Russia’s Rosatom, however, has a full portfolio, with reactors being built or reconstructed in a dozen of countries. Iran, Turkey, China, Egypt or India represent only the cream of the crop. Rosatom’s main strength is its build-own-operate (BOO) approach, whereby it assumes most of responsibilities, whilst the buyer has but one task, to pay for it. In principle, there was no reason why the state-owned French AREVA could not have followed suit. However, it did not. Hence, Western Europe might not only lose its nuclear reactors, but also it would no longer have a company that could provide full-cycle services to customers.
By Viktor Katona for Oilprice.com
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