Roundtable participants:
- David Porter, Senior Advisor to the Global Energy team, Navigant
- Simon Hobday, Energy Partner, Osborne Clarke
- Jacob Klimstra, Energy and Engine Consultant, Jacob Klimstra Consultancy
- Ulla Pettersson, Managing Consultant and Founder, E for Energy Management
What role do you see nuclear playing in Europe’s energy decarbonisation?
Simon Hobday: I believe nuclear will play a role in decarbonisation because, despite the public association with danger, nuclear is a stable form of generation and the technology is, in fact, relatively safe. The most pressing issue is how to safely dispose of nuclear waste. While low level waste is relatively easy to deal with, the high level waste (mainly spent fuel) must be subject to a careful and long term solution, and governments around the world have not, to date, implemented this.
If Europe is to use nuclear power plants as a way to reduce carbon emissions, there must be a clear plan for long term storage of highly radioactive nuclear material, and potentially a reappraisal of the ‘you deal with your own waste’ concept to help small countries with unsuitable geology, and to help share the cost of expensive facilities.
Jacob Klimstra: I believe that nuclear power has a future only in countries with a substantial baseload. Finland’s climate, for example, is unsuitable for solar and wind generation to constitute a major portion of the baseload, therefore nuclear is a possibility as long as the public doesn’t protest. Opportunities in the UK, however, are limited due to plans for large wind capacity.
David Porter: Nuclear power, while having massive potential, has never been able to distance itself from the perception that it is a ‘political’ technology. But, construction costs and timescales mean that it cannot be financed without a level of stability in policy that the EU and member states find hard to deliver. It remains, however, a technology that offers more than most to meet the challenge of the energy policy ‘trilemma’. Nuclear power will remain on the agenda and if we get a break-through in cold fusion, it will be even more important.
Ulla Pettersson: Nuclear and hydro are the only large scale types of power generation with low carbon technology and carbon-free emissions. As firms incorporate more renewables into power generation, they must also consider how to handle renewables’ intermittent nature. I believe that companies will use carbon emitting fuels such as coal and gas to balance renewables, and nuclear will constitute the baseload.
Nuclear is a relatively safe and stable form of generation but, from a global perspective, it’s more likely to be accepted in countries with a high standard of education and a stable political system. If more countries incorporate nuclear then the price of coal and gas will decrease as demand goes down. This will make it more acceptable for countries with a lower standard of education and a less stable political system to continue using fossil fuels.
There are a few markets where hydro is enough for a baseload but you need a natural source for it, as they do in Norway, Sweden, Finland, Austria and Switzerland for example. France and England do not have enough hydro not to use nuclear.
Aside from France and the UK, are there any other European nations where new nuclear generation appears likely, and what factors would drive investment in nuclear?
Simon Hobday: Nuclear is a particularly long term investment with a high initial cost. Even if a plant has a 40 year lifecycle, the decommissioning process takes many years; it could be 150 years (or longer) before a site is fully available for other usage. However, it also requires long-term political support and stability, and an independent nuclear regulator ensuring the highest possible safety standards are complied with. If a country has this in place, nuclear has major advantages as a flat, stable, baseline output with a comparatively low carbon footprint.
Jacob Klimstra: Nuclear generation is a possibility in Bulgaria and Romania but investment costs may be prohibitive.
Ulla Pettersson: The development of nuclear programmes depends on the political situation of each country. For example, there is enough hydro technology in Norway and political feeling against nuclear in Denmark and these things will hinder its development in these regions. However, Sweden and Finland will probably continue to develop nuclear plans. I will also be surprised if Eastern Europe doesn’t invest in nuclear, instead of thermal, as a way to meet climate requirements.
In the longer term, do you anticipate any change in European Commission policy with regards nuclear power plants? If so, what could be the potential impact not just on major producers, but the importers reliant on them?
Simon Hobday: There have been moves toharmonise some elements of approval processes around reactor technology to assist in reducing the costs of deployment across Europe and promote trans-European nuclear trade. However, localised safety concerns and standards will always need to be addressed and met which increases the cost of deployment compared to other forms of generation.
With a new Commission it remains to be seen whether they will address other issues around nuclear power such as the patchwork of nuclear liability regimes across Europe. Meanwhile, nuclear can be part of Europe’s decarbonisation equation on a cost effective basis but to do so it is likely to require an equivalent level of support as that received by other low carbon forms of generation.
Ulla Pettersson: It is very expensive to build brand new nuclear plants today. One way to reduce costs and shorten approval time would be to have the same system of approval for design and construction across Europe, instead of the current fractured system of different authorities in different countries with different requirements. This would be particularly useful for companies that wanted to build plants in different countries. However, Europe is not yet ready for industry centralisation; it is still very country-oriented.
David Porter: Since the Fukushima disaster, the European Commission has addressed safety issues so I don’t anticipate any future changes to policy. But, there will still be tensions if an anti-nuclear member state finds that its neighbour wants to build a new nuclear power plant.
Jacob Klimstra: I believe the free market will decide the future of nuclear and not the European Commission.
To hear more about some of the critical issues forming the heart of business and political discussion attend the forthcoming POWER-GEN Europe conference and exhibition being held in Amsterdam on 9-11 June, 2015. It is the place for the renewable power industry to meet, share information and do business. There will be a conference track dedicated to nuclear power with sessions on the challenges and opportunities for this energy source as well as technical advances.
This is the third of five roundtable discussions that will be published each Friday on Europe Outlook in the lead up to POWER-GEN Europe. Next week, David, Simon, Jacob and Ulla discuss the pros and cons of utility portfolios and business models.
