Press release

FORATOM on PINC: maintaining nuclear’s current capacity to reach EU energy goals 2050

Oct 2, 2015 | Press Release

FORATOM welcomes the intention of the European Commission (EC) to publish an “Illustrative Programme for Nuclear Energy” (PINC) by the end of 2015 as indicated in the Annex of the Energy Union Communication of February 2015. The EC is mandated by the Euratom Treaty to periodically issue a new PINC to indicate targets and programmes for nuclear production and the corresponding investment required.

Since the publication of the latest PINC in 2007, the situation for nuclear power has changed considerably both within the EU and globally. The financial crisis, the Fukushima accident and the tensions in Ukraine have all had an impact on the energy sector as a whole as well as on the nuclear sector. Nevertheless, global interest in nuclear power is growing and there are currently more nuclear power plants under construction around the world than there have ever been (67 reactors – source IAEA).

The confirmation by the Intergovernmental Panel on Climate Change that nuclear power is “an effective greenhouse gas mitigation option” needs to be underlined in the PINC. FORATOM believes that the EU should maintain at least the current capacity of nuclear generation up to and beyond 2050. This will entail the commissioning of more than 100 nuclear reactors over the next 35 years. Major investments will be required in nuclear new build, lifetime extension and safety upgrades, fuel cycle operations, decommissioning and waste management.

Nuclear energy contributes to all three objectives of EU energy policy: security of supply, decarbonisation of the electricity sector and competitive power prices. The EC acknowledges in its “Policy framework for climate and energy in the period from 2020 to 2030”, published in January 2014, that nuclear contributes to a competitive, secure and sustainable energy system in the EU. FORATOM asks the EC to apply a technology neutral approach which will facilitate investment in all low-carbon technologies including nuclear, and provide a stable regulatory and investment framework.

FORATOM’s Position Paper highlights the actions needed on energy market design to restore confidence among potential investors. There should be no discrimination between technologies that deliver low-carbon energy, and full account should be taken of system costs.

Market framework

Given that new nuclear projects are capital intensive and take a long time to begin generating income, developers should be given assurances that the European Commission and the relevant Member State governments are supportive of projects for the long term, i.e. long enough to enable investments to be recuperated. Energy market price signals, especially an effective carbon price linked to a well-functioning EU Emission Trading Scheme (ETS), can contribute to encouraging investments in low-carbon technologies. A durable market design should be based on the principle of equally promoting all low-carbon technologies, including nuclear, and should ensure clarity over future investments.

Recommendations:

  • There should be no nuclear-specific taxes.
  • The process for obtaining clearance for State Aid from DG Competition must be clear and completed to a strict timetable.
  • Should the EU Guidelines on State Aid for Environmental Protection and Energy be revised in the future, the EC should not discriminate between low-carbon technologies, which include nuclear energy as well as renewable energy sources.
Investment requirements

The commissioning of the estimated 100 new nuclear units mentioned above will deliver 122 GWe of nuclear capacity between 2025 and 2045. Altogether, we can expect at least 14 EU Member States to be operating nuclear power plants (NPPs) in 2050. When built, new NPPs have many advantages in the electricity market: they are designed to operate for a long time (60 or even 80 years subject to the national safety regulator’s approval); have relatively low fuel and other operating costs; can be centrally and flexibly dispatched; and provide predictable output. A recent IEA/NEA report shows that new NPPs in operation by 2020 are competitive with fossil fuels and the cheapest renewable sources.

The long-term operation (LTO) of nuclear power plants can be an economic means of providing low-carbon electricity. A study by the OECD/NEA from 2012 states that “in most cases, the continued operation of NPPs for at least ten more years is profitable even taking into account the additional costs of post-Fukushima modifications, and remain cost effective compared to alternative replacement sources”.

Recommendations:

The EU and the European financial institutions should address the existing market failures in many of the Member States and facilitate investment in nuclear energy projects. This would ease the burden of high up-front capital intensity in order for the overall benefit of nuclear’s competitiveness to be realised. All applications for funding should be considered on a non-discriminatory basis.

Technological leadership

The EU is a leader in nuclear expertise and can claim some of the best nuclear innovation and research in the world, relying on state of the art skills and infrastructure. This research aims to improve sustainability and efficiency, as well as the safety aspects of nuclear technology.
Investment will be required to maintain and modernize some fuel cycle facilities, and to retain the current level of security of nuclear fuel supply. The EU needs to ensure enrichment and fuel fabrication capacities are extended to allow the supply of uranium to all kinds of reactors in use in Europe, including VVERs.

The EU is also a world leader in the recycling and reprocessing of used fuel, radioactive waste management and preparations for final disposal. All EU Member States (whether or not they have chosen to make use of nuclear power) make use of radioactive materials in medicine and other industrial processes, and therefore have a need to manage radioactive waste products safely and provide for final disposal.

Europe’s nuclear research and development facilities are essential to maintain its leadership in the international nuclear community. Grant and financing mechanisms at a European level are currently insufficient to catalyse the needed public-private partnerships to develop these facilities.

Recommendations:

  • The EU should facilitate nuclear development projects by providing a stable regulatory and investment framework given the importance of nuclear power for achieving the EU’s climate action goals. Confidence needs to be built among equity investors in nuclear power projects to maintain Europe’s leadership role in nuclear technology and innovation.
  • Expected to have high competitive and sustainability advantages, advanced nuclear reactor technology, including Generation IV, should be provided with adequate funding for development and demonstration at EU level, taking into account the EU potential in terms of human and financial resources.
Regulatory risk

Better harmonisation of regulations across the EU for the licensing of nuclear technology and for obtaining environmental consents would enable nuclear vendors and supply chain companies to compete more effectively in the international market. Capital intensive projects, like nuclear energy, require regulatory certainty and efficiency for their prompt completion.>Recommendations:The Commission should encourage the nuclear regulatory bodies represented at ENSREG and WENRA to accelerate the harmonisation of regulatory requirements in order to reduce the barriers to deployment of nuclear technologies in the EU Member States.

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