Reviving Nuclear Energy: A New Chapter in Europe’s Energy Landscape
The landscape of energy production in Europe is undergoing seismic changes fueled by massive end-use electrification and the soaring power demand driven by the digital economy. As countries grapple with their energy strategies, nuclear energy has re-emerged as a topic of intense discussion. Unlike past notions of a ‘nuclear renaissance’ that faltered due to political hesitance and public backlash, today’s nuclear dialogue is framed by competitive pressures, the necessity for reliable and low-carbon energy sources, and a resurgence of interest from over ten EU Member States. As these nations reassess their energy portfolios, nuclear energy finds itself in a renewed light.
A Pragmatic Shift in Perspective
Historically, nuclear energy has been a contentious issue across Europe. Originally celebrated as a solution to energy crises—especially after the 1973-74 oil crisis—it soon became embroiled in safety debates and anti-nuclear activism. Article 194 of the Treaty on the Functioning of the European Union (TFEU) grants Member States discretion over their energy mixes, a principle reinforced by the Court of Justice of the European Union. However, EU-wide policies related to nuclear have often been contentious, impeding clarity and investor confidence.
Recently, there seems to be a pragmatic shift in attitude towards nuclear energy. The upcoming 2024 Nuclear Energy Summit, Franco-German collaborations, and mentions of nuclear as a baseload energy source by key political figures like President Ursula von der Leyen indicate a growing acceptance. This shift suggests a collective acknowledgment of nuclear’s viability as part of a balanced energy strategy.
Recognizing Nuclear’s Role
Nuclear power stands out as an indispensable, dispatchable source of clean electricity. EU forecasts indicate stable nuclear capacity in both 2020 and 2024, even though most of this capacity already exists. As Europe advances towards a decarbonized energy system dominated by variable renewable energy sources, the integration of nuclear becomes increasingly paramount. The challenges of managing grid stability and system-wide costs mean that nuclear’s low-carbon reliability is more relevant than ever, potentially making it more competitive economically than simplistic comparisons might suggest.
Nuclear’s attributes—firmness, inertia, and stability—further bolster its appeal. As the energy landscape evolves, recognizing how to incorporate these advantages into market design remains a policy challenge that Member States must address. Balancing traditional baseload operations with the changing demands of modern energy consumption is another hurdle that countries aspiring to enhance nuclear infrastructure must tackle.
The Slow and Costly Nuclear Landscape
New nuclear projects in Europe, however, come with their own set of challenges. The construction of reactors has been stymied by high costs and significant delays over the years. Since the 1990s, the few reactors built or currently being constructed have faced numerous setbacks, often leading to schedules extending a decade or more. This stagnation can be attributed to a myriad of factors, including supply chain degradation and a lack of skilled labor following years of limited development. Regulatory complexities further exacerbate the situation, making the approval process lengthy and expensive. Despite these challenges, all projects were sanctioned under favorable economic conditions, and similar delays now could spell financial disaster.
The situation has led to a limited choice of project designs, with major players like France’s EDF leaning toward domestic options while others consider international designs from countries like the US and South Korea. Their track record for timely and economical project delivery is crucial, especially as the Czech Republic recently opted for South Korea’s KHNP, following successful ventures in the UAE.
The Financing Dilemma
Financing nuclear projects remains a significant hurdle. Historically, nuclear development has leaned heavily on public funding, although Small Modular Reactors (SMRs) could eventually shift this dynamic. Regardless, strong public support and financial backing are critical for any substantial development in the nuclear sector. Private investments hinge on solid political frameworks and risk-sharing measures that can mitigate the uncertainties surrounding nuclear projects.
Only a handful of nations, like Sweden, currently demonstrate robust frameworks conducive to nuclear investment, offering examples of state-backed loans and guarantees. Poland’s proactive state aid case also reflects a possible pathway for encouraging investment. The EU’s evolving stance on financing and risk-sharing could potentially signal a more constructive approach to supporting new nuclear initiatives.
A Future for Nuclear
While nuclear energy remains a choice for individual Member States, there is a noticeable shift towards recognizing its potential contributions to energy security, decarbonization, and system stability. Pragmatism within the EU seems to be softening previously stringent views, paving the way for greater integration of nuclear power into Europe’s energy future. However, the pivotal question remains whether the industry can deliver projects on time and within budget, backed by sustained political and financial support from Member States.
About the Author:
Irina Kustova is Head of the Energy Programme at the Centre for European Policy Studies (CEPS) in Brussels, where she works on various issues concerning the energy transition and energy security.