Together with Eastern European leaders, French President Emmanuel Macron co-signed a letter calling on the European Commission to include nuclear energy in its Green taxonomy. The letter was written on March 19th and was public after a European Council summit held on March 25th. The European taxonomy establishes an extensive list of “sustainable” activities which will help achieve the carbon neutrality target by 2050 and will benefit from targeted investments. In the framework of that classification, nuclear energy currently finds itself under the “does not harm” label, which doesn’t make it eligible for investments with lower tax rates.
Stakes of including nuclear power into the taxonomy are quite high for France. The country will soon have to renew its nuclear fleet, as its reactors are reaching their lifetime limits. Capital costs of the new plants - the major components of nuclear LCOE - would be significantly reduced if nuclear managed to enter the privileged green category.
The letter, published on the website of the Polish government, urged the European Commission to respect the principle of “technological neutrality” in the implementation of climate-related policies. Reiterating the right of each country to choose their own energy mix, the signatories demanded to stop discriminating against nuclear power - which displays low-carbon emissions and might be put at the service of EU decarbonization goals.
The arguments presented in this plea included the creation of new jobs and the potential contribution of nuclear to hydrogen production - a promising technique consisting of electrolysis powered by a nuclear plant, already tested in the United States. And while the need for hydrogen investment seems to create consensus among MEPs, nuclear power struggles to be unanimously accepted.
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Austria and Germany, in particular, oppose the initiative firmly, notably because of radioactive waste management issues. Since the project of the taxonomy started being discussed, the role of nuclear has been prone to controversy. Germany was fervently against it, while France made clear that it would not abandon its project. “France will advocate for nuclear to be part of this green label”, the French Minister of the Economy declared in 2019.
But the discussion was brought to a whole new level when the French online media Contexte revealed on March 26th a document in which experts from the Joint Research Center (an EU entity notably dealing with energy issues) were not opposed to the inclusion of nuclear power in the taxonomy. The JRC was charged in 2020 with assessing the risks that nuclear energy could present to human health and to the environment. And its conclusion was: “Analyses did not reveal any scientific element proving that nuclear energy was more damageable to human health than other sources of electricity included in the taxonomy”.
A strategic question for France
Although France is committed to reducing its share of nuclear and gradually replacing it with renewables, in the medium term, it still heavily relies on it. This share has been shrinking for the past year, notably due to the symbolic closure of the Fessenheim plant, and the planned one at Bugey.
The French nuclear fleet is approaching the end of its lifetime, and if it is not renewed, guaranteeing a baseload source of energy will be a major challenge. For the past ten years, France has been looking at this issue without taking any decision. Today, an urgency has come to react, as the country’s transmission operator RTE warned about “risks of insufficiency in electric supply during winter” brought by the decrease of nuclear power. At the same time, the loss of EDF know-how, demonstrated by the failures on the Flamanville plant, is casting doubt on the technical feasibility of this nuclear expansion.
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The debate in France was also influenced by an IEA report released in January, that opened the perspective for a 100% renewable energy mix by 2050 - leaving nuclear on the sideline.
Renewed European alliances
Europe has been split across the nuclear line for the past decade. But the French alliance with Eastern countries, materialized by the joint letter addressed to the European Commission, marks a major shift in this traditional divide.
While its neighbors - Austria, Belgium, Germany - are firmly taking the road of nuclear phase-out, France is looking at Eastern Europe as a potential investment destination for its European Power Reactors (EPR) - the “new generation” technology. In February 2020, Jean-Bernard Lévy, the CEO of French EDF, traveled to Poland to negotiate a deal for the country’s nuclear plan. While Warsaw is still considering different options for the commissioning of its reactors, EDF said it would be able to cover the entire nuclear cycle.
Fourteen of the planned reactors’ construction are currently located in Eastern Europe. For Hungary, Poland, and the Czech Republic - heavily relying on coal - building nuclear reactors is an efficient bridge towards decarbonization targets, while guaranteeing stable electricity prices. Hungary already signed a deal with Russia for the construction of VVER reactors, while the Czech Republic is investing in ramping up nuclear capacity by 2040.
The claim for nuclear power inclusion into the taxonomy is also legitimized as the European Commission is reconsidering the status of natural gas - more polluting than nuclear, yet on its way to being included in the ranks of preferential investments.
By Tatiana Serova for Oilprice.com
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France where nuclear energy accounts for 70% of electricity generation and the Eastern European countries of Poland, Hungary and the Czech Republic are in favour of including nuclear energy in the EU’s Green taxonomy. The European taxonomy establishes an extensive list of “sustainable” activities which will help achieve the carbon neutrality target by 2050 and will benefit from preferential investments.
France will never relinquish nuclear energy and it is advocating for nuclear to be part of EU’s energy transition. It is motivated by the fact that its nuclear fleet is approaching the end of its lifetime. Moreover, Capital costs of the new plants would be significantly reduced if nuclear managed to enter the privileged green category thus attracting preferential investments. Furthermore, France is looking at Eastern Europe as a potential investment destination for its new generation” technology.
For the East European countries who rely heavily on coal, building nuclear reactors is an efficient bridge towards meeting de-carbonization targets, while guaranteeing stable electricity prices.
On the other hand, Austria, Belgium and Germany, in particular, oppose the initiative fervently because of radioactive waste management issues. They are phasing out nuclear energy.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London