Assembling the Policy Pieces to Keep Nuclear Power’s Needed Place in Europe

In a matter of weeks, the European Commission is expected to roll out new guidelines around state aid for energy and environmental matters that may, through verbal gymnastics, green-light Member States’ legal ability to put financial support behind nuclear power.

On Tuesday, the European Commission announced a fresh agreement with the International Atomic Energy Agency to reinforce its long-standing nuclear safety cooperation with the nuclear watchdog agency. Or, in other words, to reinforce the type of policy cover needed to make it more palatable and possible for Member States, like the U.K. to give financial support to nuclear power.

Nuclear power plants, just over 130 of them in 14 EU Member States, reliably generate (unlike wind and solar) about 30% of Europe’s electricity, according to Commission data, and do so while keeping carbon emissions at a minimum. A 1000-MW nuclear power facility will operate, in practice, very close to that nameplate capacity in terms of capacity utilization over its multi-decade life. A solar farm, however, with say 10 MW of nameplate capacity will, in practice, only normally utilize around 2 to 4 MW of its capacity over its lifetime on average because of intermittency.

But, as the story goes, nukes have been under renewed, knee-jerk assault in places like Germany and Austria since the 2011 Fukushima accident in Japan resulting from the tsunami, which caused significant nuclear equipment failures at the Fukushima facility and ultimately led to harmful radioactive material releases.

The agreement signed Tuesday is a confidence-boosting measure aimed at demonstrating that some prudent policy and industry changes are required to address legitimate public safety concerns following Fukushima. “There is a clear need to reinforce the nuclear safety cooperation with the IAEA and to make it more structured, in particular in the current context after the Fukushima accident,” according to the memorandum of understanding inked between the Commission and the IAEA.

The agreement covers a number of “priority” areas, including nuclear safety (safety standards, installation safety, regulatory issues, safe management of spent fuel and radioactive waste) and emergency preparedness and mutual assistance.

 The EU/IAEA announcement also came the same day that EU Competition Commissioner Joaquin Alumnia said the College of Commissioners will be having an “orientation debate” in coming weeks about the U.K.’s move to build much-needed new nuclear generation capacity with state aid support in order to plug a projected widening power capacity gap in the U.K. in the coming years.

While not providing many specifics on the U.K. case, Alumnia told a group of business executives that “the situation today is different” regarding state aid support for nuclear power, in that the EU has ambitious climate abatement and pressing energy supply security goals.

Indeed, the three key dimensions to EU energy policy — competitiveness, sustainability and security of supply — are all headed in the wrong direction with no real signs of changing:

• Gas-fired power generation — which meets around a quarter of all power demand in Europe — is down some 25% in Europe since 2010, according to Eni, because of distorted wholesale power markets triggered by cheap, over-subsidized solar and wind power;
• Carbon emissions are rising from increased coal-fired power generation caused by weak U.S. gas prices, and despite poor, recession-induced European energy demand and despite ever increasing amounts of over-subsidized wind and solar power generation in Germany and elsewhere (the share of coal rose above 50% in the German power mix in the first half of 2013, according to Commission data); and,
• European industry continues to see a yawning energy price disadvantage — for natural gas and power — relative to its U.S. competitors.

 Spencer Swartz