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Alt Text

Nuclear Power's Resurgence In The Middle East

While nuclear power loses popularity…

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Is This The End Of Nuclear Power In The UK?

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Are Higher Uranium Prices Around The Corner?

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The Slow Death Of Nuclear Power In Europe

Nuclear

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.

Related: Texas Shale Hit Hard By Hurricane Harvey

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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  • onesecond on August 30 2017 said:
    The wholesale price of electricity is lower in Germany than in France. France low rate of electricity for private consumers is a consequence of huge subsidies to the nuclear industry which still have a hard time to prevent its bancrupsy. As for Rosatom, the projects were pushed on countries via extremely attractive finance options provided by the Russian government which it actually can't afford or to be precise, is money which could be spent more productively, as the financing conditions bring lower interests than the Russian government has to pay refinancing itself. Technologywise nuclear is an economic nonstarter, only kept a walking zombie by money ferried from taxpayers to it in one or the other way.
  • Wayne Freeman on August 30 2017 said:
    Nuclear power generation is NOT foolproof--something can always go wrong, and DOES periodically. Accidents (there will always be accidents) can leave large swaths of land and sea uninhabitable for thousands of years. Pretty much END of discussion for me.

    Most people think of electricity as being the product provided by nuclear power plants. When you consider the life of a plant is somewhere around 60 years, and the deadly radioactive waste sticks around for a few million years, I think it's more accurate to say the product of radioactive waste from nuclear power plants is an unacceptable burden inflicted onto untold generations of people who will NEVER get any benefit from it whatsoever. A terrible legacy to leave our heirs!
  • Viktor Katona on August 31 2017 said:
    @onesecond Although you are spot on that the French government goes to great lengths to keep the electricity price low, renewable-energy subsidies were a massive part of the German government's policy, too. They've created an absurd situation, when solar energy, for instance, was both subsidized and subject to a hefty surcharge (just FYI, the average annual household price of electricity was 1060 EUR in 2016, roughly the double of 2007-2008 prices). I am not sure where you got the information about Russia not being able to afford the 10-billion EUR credit agreement, does not seem credible at all. It is one thing that the Russian economy is struggling, but the Russian government is anything but cash-strapped. Although I agree with you that the most promising future energy technologies are likely to be non-nuclear, from the point of view of profitability nuclear is still up there in the absolute top. So yes, a gradual decline of nuclear would be much wiser - to actually wait for wind and other renewables to reach the current production costs of nuclear. Better phase out coal as quickly as possible, that is a surefire environmental liability no one in Germany's upper echelons is talking about.

    @Wayne Freeman it's good that you've raised the environmental factor. I can totally accept your opinion, still, I will insist that the phasing out should be done much less hurriedly, panic is rarely a good guide in the world of business. I see the 2030-2040s as the optimal horizon to begin this transformation, at that point wind will undoubtedly be among the top-3 most cost-efficient sources of energy, with solar making significant strides, too.
  • Thomas on August 31 2017 said:
    Rubbish, rubbishy and rubbish!!! The western world is facing an impending energy shortage. Solar and wind power are not efficient enough to counter this near time shortage. So what should be done to provide all the required electricity within the next ten years. Oh right, nuclear is out. Oh right, coal and oil is out. So could one of the imbeciles above please explain to me what low emission power plants are going to provide all the required electricity for our continually increasing energy demands especially as we will all be buying electrically powered motor vehicles? Can any of the imbeciles above tell me how many natural gas power plants have to be built to replace one nuclear power plant, or failing that tell me how many wind turbines to do the same job? Please also tell me how long it would take to build these plants and structures and how many skilled workers are required to complete these tasks. I bet they are incapable of providing answers to my questions because like all imbeciles the seem to have problems understanding logistics and simple arithmetic.
  • Jim Hopf on August 31 2017 said:
    If France indeed has 17GW of solar and wind generation (more than I thought), that output would be the equivalent to only 5 or 6 of the 17 reactors that they are talking about closing, due to renewables' low capacity factors. Thus, France would have to *quadruple* its solar and wind generation, to offset the loss of those plants. What will likely happen is that France will close ~17 GW of nuclear generation, build an additional ~17 GW of solar and wind generation, and use ~17 GW of fossil capacity (hopefully gas) to fill in during the ~2/3 of the time that the solar and wind facilities are not producing anything. That is, CO2 emissions will go up, air pollution (and associated public health impacts) will go up, power costs will go up, and France's level of energy independence and security will go down.

    Europe's actions show that global warming is NOT their main concern. They are driven by a love of renewables above all else, and a hatred of nuclear above all else (even fossil fuels). They are busy primarily replacing nuclear (instead of fossil!!) with renewables. Emissions are not falling much, in places like Germany or in the EU in general. They refuse to put a significant price on CO2 emissions and let all means of emissions reduction (e.g., renewables, nuclear, coal-to-gas switching, etc..) compete on a fair, level playing field. Instead they insist on renewables subsidies/mandates and giving no incentives for any other methods of emissions reduction. The result being combinations of coal and renewables which result in a magical combination of high power costs and high CO2 emissions. Some example to follow...
  • Viktor Katona on September 01 2017 said:
    @Jim Hopf Thank you for a very valuable reply. I totally agree with you, pretty much on everything you've said. I would only add that France might not be able to build new gas plants (or any other non-intermittent source of energy which they will deem adequate) in time, therefore importing electricity from adjacent countries is indeed a plausible scenario. And completely spot on, if France wants to replace nuclear with intermittent renewables, it will have to quadruple its production capacity.

    It really is strange how coal does not have the negative reputation that nuclear has, although it adverse effects are much more palpable. Coal consumption in the EU leads to 23 000 premature deaths annually - heart diseases, lung cancer, bronchitis, you name it - by far surpassing anything nuclear-related (with the exception of Chernobyl, which, I reckon we all agree, is a very specific case of treating nuclear risks). The German population suffers a lot from coal-related pollution, Europe's most-polluting coal power plants ? 2,3,4 and 5 are all situated in Germany (the most polluted coal plant in Europe is Poland's Belchatów plant). Yet still, there is no official coal phase-out policy, no binding commitments on coal.

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