Nuclear gains favour in Europe, but financing struggles remain

Though EU countries remain divided about nuclear power, the insecurity brought on by the war in Ukraine has sparked increased interest from politicians not seen in decades. But are they willing to match big talk with big wallets?

Last month, Europe witnessed a first. Fourteen of the EU’s 27 heads of government converged next to the Atomium in Brussels for the first Nuclear Energy Summit, co-organised by the International Atomic Energy Agency and the Belgian presidency of the EU Council.

The event reflected remarkable renewed enthusiasm for nuclear power which hasn’t been seen in Europe in decades, and such a summit would have been unthinkable just a few years ago. Russia’s invasion of Ukraine in February 2022, and the energy insecurity it caused for Europe, has resulted in a re-evaluation from several countries that phased out nuclear power years ago or who have sat on the fence about it until now.

Nuclear Energy 2.0

The shift in attitude has been seen not only in national capitals but also in Brussels. Speaking at a ‘Nuclear Energy 2.0’ event organized by French utility EDF, Finnish utility Fortum and Swedish utility Vattenfall earlier this month, Internal Market Commissioner Thierry Breton acknowledged that the Commission’s thinking has shifted.

“When I joined the Commission, of course, I wanted to speak about more nuclear energy being critical for Europe,” he said. “But they all told me, commissioner, no, no we don’t speak about nuclear here. Then I said, so let’s speak about ‘decarbonized transitional energy’, [and they said] yes, we can speak about that.”

With those attitudes changing, Breton called in his speech for the Commission to propose an EU Nuclear Technologies Act which would aim to stimulate the sector’s development in Europe in a similar way to the action plan for wind power and a forthcoming Solar Charter.

Europe’s historic split on nuclear power has meant that EU involvement in the sector has so far been mostly limited to safety and waste decommissioning via initiatives such as the Euratom Research and Training Programme. For the moment, the specifics of the initiative are unclear, including the timing.

Financial hurdles

These are big projects, and even the small nuclear reactors (SMRs) currently coming into focus require quite a bit of up-front cash. The sector, which recently formed a pan-European alliance, presented a series of recommendations for how to get the finance moving to Commission Executive Vice President Maros Sefcovic at the event.

These include giving nuclear equal funding opportunities to solar and wind, by defining all as net-zero technologies, extending EU funds to financing nuclear, targeting funds to industrial scale-up and European supply chains, and funding training and reskilling opportunities to attract workers to the sector.

They’ve also asked for public financial support such as the creation of a European sovereignty fund dedicated to net zero technologies including nuclear, and for financing from the European Investment Bank to support projects across the spectrum of all nuclear technologies.

But EIB Vice-President Thomas Östros recently suggested the bank remains cautious about providing money for nuclear.

High levels of pre-funding

Speaking at the event after receiving the recommendations, Sefcovic said he too has seen an increased interest in nuclear. “It’s not surprising that the attitudes in the European Union toward nuclear are really shifting,” he said.

“But as everyone in this room knows, these kinds of projects require very high levels of prefunding. They’re very often subject to budget overruns. And sometimes in the past, we had lengthy construction delays.”

“But despite all this, nuclear power represents one of the most cost-effective ways to secure clean power at scale and with 24/7 dispatch capacity. I would say that alongside extending the lifespan of existing nuclear power plants within the framework of their safe operation, I also believe we should put the focus on several segments of this sector – in particular, to consider how to support these projects financially as a way to further our green transition while ensuring greater energy security in Europe.”

He said that SMRs remain a key area of interest because of their “better scalability and lower initial investment costs,” and this is why the Commission places great hope in the recently launched SMR alliance.

Long-term cost calculation

Luc Rémont, CEO of EDF, agreed with Sefcovic that despite the construction costs, nuclear can be cost-effective in the long run. “Nuclear is not expensive, it’s just a type of infrastructure that is bigger to build because this is the most concentrated capacity of generating power that you have among all the technologies,” he said at the event.

“But of course, it takes a while to build this big infrastructure, and that’s where financing comes into the loop. Because you need time to build it, and this is where as an industry in Europe we need to accelerate. We used to be very good at it back in the 90s when we were building in Europe six to seven reactors per year.”

“In electricity, there is zero investment possible without a financing scheme supported by states – without it not a single investment would happen,” he added. “Nuclear needs their own financing schemes to support the investment because the duration of the investment and the risk on pricing has to be covered.”

Fortum CEO Markus Rauramo, also speaking at the event, agreed. He said that many calculations about nuclear’s cost-effectiveness aren’t taking permanency into account. “The fact that renewables are less expensive by the megawatt-hour (MWH), that means that then there are more MWH available but [you need to keep in mind] the permanency,” he said.

“So, we can look just at the headline number of what is the cost in MWH, but then we forget that this includes capacity and permanency, which is not the case for renewables.”

“On financing, let’s use the tools available,” he added. “Europe has financing tools, we have one of the biggest investment banks in the world, the EIB. Why not use it for industrial competitiveness?”

This article follows the policy debate “Media Partnership – Powering Tomorrow, Inspiring Today: Nuclear Energy 2.0” organised by EDF, Fortum and Vattenfall.

[By Dave Keating I Edited by Brian Maguire | Euractiv’s Advocacy Lab ]

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