Is the hype over a so-called European ‘nuclear renaissance’ just that – hype? Deputy Editor and conference director of PennWell’s new conference and exhibition Nuclear Power Europe, Tim Probert examines the evidence.

Tim Probert, Deputy Editor

For so long the black sheep of the European power community, nuclear power is back from the brink. European governments across the continent have given the green light to new nuclear plants, while countries like Italy, the UK and Sweden have abandoned previous government policies that explicitly ruled out any possibility of new build nuclear.

Finland’s delayed Olkiluoto 3 nuclear reactor, expected to generate electricity by 2012, will be the biggest the world has ever seen Source: TVO
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It seems the much-hyped ‘nuclear renaissance’ is a reality. Or is it? Dig deeper and you will find an industry full of hope, but also one of trepidation. Financing issues, unresolved waste storage problems and safety concerns continue to dog a European nuclear sector scarred by previous crises.

According to the latest data from the World Nuclear Association (WNA), there are 436 operational reactors worldwide, generating 372 GW. There are 45 new reactors under construction (40 GW), 118 planned (131 GW) and 276 proposed (300 GW).

In Europe, there are four reactors under construction – Flamanville in France, Olkiluoto in Finland and two new units at the existing Mochove plant in Slovakia. Seven reactors are in the planning stages, while some 57 are proposed (including ten in Ukraine alone). The WNA’s Nuclear Century Outlook estimates that the 372 GW – or 15 per cent -– of the world’s electricity supply that currently comes from nuclear generation will have grown to 2000 GW by 2100.

This sixfold increase represents the low end of the WNA’s projections. The The Organization of Economic Cooperation and Development’s Nuclear Energy Agency estimates that by 2050, global nuclear capacity could increase by a factor of between 1.5 and 3.8, according to their low and high scenarios.

Figures such as these must make even the most fervent opponent of nuclear power wonder whether they have chosen the best use of their time.At the beginning of 2009, however, there were eight fewer operational nuclear reactors than in 2002. In 2007, there was a two per cent decline in nuclear electricity generated worldwide and a six per cent drop in the European Union (EU).

Faced with the ‘trilemma’ of energy security, mitigating carbon emissions and long-term affordability, Europe is embracing nuclear power once more. In February, Sweden, which generates 46 per cent of its electricity via nuclear power, opted to scrap a national phase-out plan, while in July, Italy formally overturned a 1987 referendum that banned nuclear power and led to the shutdown of its four reactors. In the UK, Tony Blair eventually converted to nuclear power after earlier ruling it out in government legislation. In early 2008, interested parties were invited to come forward with their plans for new power plants. Switzerland has proposed two new reactors to replace its ageing fleet and, despite the current teething problems with the European Pressurized Water Reactor (EPR), both France and Finland want to build more nuclear plants.

But not every country in Europe has clambered aboard the nuclear bandwagon. Belgium has decided to shutdown all its reactors between 2015 and 2025, Spain is also phasing out atomic energy and, of course, Germany – the world’s fifth largest producer of nuclear power – is undertaking a programme of scheduled shutdowns.

It is unlikely that construction of new nuclear power plants in Germany will take place in the foreseeable future, even under an Angela Merkel-led CDU-FDP coalition, such is the lack of public acceptance. The best that the German nuclear industry can hope for, perhaps, is for a maximum possible extension to the existing fleet’s remaining service life.


Perhaps the most apposite plans for new build nuclear come not from western Europe, but from the east. Bulgaria, Romania, Hungary, Slovakia, the Czech Republic, Lithuania, Poland, Slovenia and Ukraine are all building, planning or have proposed new reactors. Energy security is the main reason for most eastern European countries to expand nuclear output or, in the case of Poland, to embrace atom-smashing for the first time.

Furthermore, recent acceders to the EU, such as Bulgaria, Lithuania and the Czech Republic were forced to close or substantially upgrade their nuclear power plants as a pre-condition to joining. Lithuania, for example, has been ordered to shutdown its one nuclear plant at Ignalina by the end of 2009.

Plans are afoot to build a 3400 MW replacement by 2018, with state power company LEO LT leading a consortium of energy companies from Poland, Estonia and Latvia (Polska Grupa Energetyczna, Eesti Energia and Latvenergo). Some, like the pressure group Central and Eastern Europe (CEE) Bankwatch, have said that the plant would be rather oversized for a small Baltic state; while others have raised concerns that Eastern European projects such as these are ill-conceived, offering neither transparency, economic viability nor safety.

Despite the growing political will in favour of nuclear power, the industry must be careful not to take campaigning groups like CEE Bankwatch lightly. Greenpeace, for one, is positively itching to disrupt any plans for new reactors, seeing them as unsafe. In the UK, for example, they successfully argued in 2007 in the High Court that the government did not carry out the ‘full public consultation’ to which it had committed before making a decision to back new nuclear power stations – effectively putting back the country’s new build programme by at least a year.

The UK was undeterred, however, and there are now plans for six new nuclear reactors. But in July, Greenpeace wrote to the government threatening legal action after it learned E.ON would commence drilling preparatory bore holes at a potential site in Oldbury, Gloucestershire on 3 August – before the government had issued a final national policy statement on nuclear, an official ‘justification’ process for building more stations as needed by law, or an assessment of reactor designs by the Nuclear Installations Inspectorate.

However, the days of people taking to the streets against nuclear power appear to be disappearing, if not already gone. The climate change agenda has given the industry a public relations boost – 44 per cent of EU citizens now broadly support it, according to a European Commission poll, up from 37 per cent in 2005. Even in Germany, opposition to nuclear power is diminishing – more than half of Germans are in favour of extending the lifetimes of the country’s safest nuclear plants.


In Belgium, a national nuclear forum is spending €2 million ($2.84 million) on billboard advertising using phrases such as “You are in favour of nuclear energy because you want to save your children from global warming”. The Belgium Nuclear Forum’s campaign’s objective is to ultimately reverse the phase-out – 55 per cent of Belgium’s electricity is atomic – because replacing this low-carbon power with non-nuclear sources would be prohibitively expensive. The opinion polls show that the campaign is having some effect – only 15 per cent of Belgians believe the government should strictly adhere to the phase-out plans.

EDF’s Flamanville 3 it is one of four reactors currently under construction in Europe Source: EDF
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But doubts remain about the safety of nuclear power. The main sticking point being the waste issue – a 2008 EU poll showed that four out of ten opponents to nuclear power would change their minds if a safe, permanent solution for waste management could be found.

Every year, the 27 member states of the EU generate an estimated 85 000 m3 of radioactive waste and ever since the industry began to produce nuclear waste, it has been stored temporarily, not buried. New storage facilities are currently being built in Sweden, France and Finland. Finland is building a deep underground repository within a granite formation due to be operational by 2020, while France is experimentally storing waste 500 metres down in clay formations with a view to commissioning a repository at the eastern town of Bure in 2025.

The risk of serious accidents and immediate health problems from nuclear power stations has tended to be over-exaggerated. Coal fired power plant emits more radioactivity than a nuclear plant, due to the uranium and thorium contained in the fly ash, yet nuclear power still has a public relations problem, albeit one that is diminishing thanks to the climate change agenda.


Regulation appears to be a more pressing issue. At present, there is no EU-wide directive on nuclear power – many companies in the nuclear industry complain that they must continually ‘reinvent the wheel’ i.e. apply for a costly and lengthy design assessment process for each country in which they wish to supply equipment.

Energy commissioner Andris Piebalgs, eager to please both sides of a divided Europe, has been moderate in his ambitions to encourage nuclear power. Last November, the Commission adopted a Nuclear Safety Directive, which defines basic obligations and general principles for the safety of nuclear installations in the EU, while enhancing the role of national regulatory bodies.

Its scope of application is the design, siting, construction, maintenance, operation and decommissioning of nuclear installations, for which consideration of safety is required under the legislative and regulatory framework of the EU member state concerned. In reality, however, the safety directive fails to provide detail and merely sets down rules that industry already follows, i.e. safety requirements established by the Inter-national Atomic Energy Agency and the Convention on Nuclear Safety.

Foratom, the Brussels-based European nuclear industry association, called the directive a starting point for a common EU framework on nuclear safety, but others labelled it as an example of legislating for the sake of legislation. It seems that while the EU has made some progress on this issue, opinions differ so widely that EU laws on nuclear safety and waste management are a long way off.

So it is for national regulators, rather wisely perhaps, to regulate the nuclear power stations to be built in their countries. Several appear to have learned the mistakes of the past and have set up governmental and non-governmental organizations to accelerate the design assessment and other regulatory processes.

The UK, for example, has learned some very hard lessons from the building of the Pressurized Water Reactor (PWR) at Sizewell B, which was first announced in 1980 yet not completed until 1995, and has taken steps to streamline the building of new nuclear power plants. Steps that, according to Areva Nuclear Power’s president and CEO Luc Oursel, have made the UK the benchmark market for the rest of Europe.

For Oursel, there are two main factors to the attractiveness of the UK to the nuclear industry. Firstly, political parties of all hues, Greens aside, have given their backing to the nuclear renaissance. Most importantly, the Conservative Party, widely expected to win the general election likely to take place in spring 2010, has allayed fears by declaring that it would stick with the route map drawn up by the current Labour government. “In the UK, there is cross-party political support fundamentally aligned to nuclear power,” said Oursel. This is absolutely key to long-term projects like the building of nuclear power stations.”

Secondly, says Oursel, the UK has created the Office for Nuclear Development (OND), part of the Department of Energy and Climate Change, which will have policy ownership for the government’s responsibilities on nuclear safety, security and safeguard and aims to ensure progress on waste management and decommissioning.

The OND is advised by the Nuclear Development Forum, which brings together government with key industry stakeholders, with the aim of engendering contact between all parties on the issues that matter the most to potential investors and operators.

The Forum, which is chaired by the Secretary of State for Energy and Climate Change, meets three times a year to advise Westminster on how to develop the right framework, consistent with energy policy goals, as well as how to secure a domestic supply chain.

Oursel calls the OND a one-stop shop for the nuclear industry and a “fantastic accelerator to deliver new nuclear power stations by the 2017 deadline”. However, many fear that the June 2011 deadline for the results of the state Heath and Safety Executive’s (HSE) Generic Design Assessment, which would give the all clear for Areva’s EPR and Westinghouse’s AP1000 reactors, may be optimistic.

The HSE has since identified potential exclusions for AP1000 in the areas of civil engineering and structural integrity. For the EPR, the HSE is considering excluding Areva’s reactor on the grounds that its systems for control and that for instrumentation are insufficiently independent and diverse. The HSE has told Areva that the system architecture is overly complex and relies too much on computer-based systems that have a high degree of connectivity.

So the path to a nuclear renaissance is paved with obstacles, but the UK has sought to avoid the pitfalls as suffered in Finland, where construction of the ill-fated Olkiluoto 3 EPR project began before the assessment and certification of the design was complete. The project, a collaboration between Areva, Siemens and utility TVO, was due to start generating in May 2009, but due in part to incomplete design information the project is now overrunning by three-and-half-years and is 50 per cent over budget.


Areva has taken a big financial hit over Olkiluoto 3 and this has led to fears over the economic viability of building a new wave of nuclear power stations. Per Lekander, head of utilities research at Swiss bank UBS, believes that the nuclear renaissance is a myth.

“There is not a renaissance,” he said. “There are merely some nuclear projects. New build nuclear is only for very large, AAA-rated utilities and it is by no means a ‘no-brainer’. If a utility like E.ON or RWE’s CAPEX budget is €10 billion per annum – then one €5 billion nuclear power station is 50 per cent of their annual budget. It is quite unlikely that there will be a return to the 1970s.”

Having built up their empires ahead of EU liberalization directives, several of European utilities that were capable of building nuclear power plants are now rather strapped for cash. According to Standard & Poor’s, Italy’s Enel is €62 billion in debt and EDF, which had to borrow to buy UK nuclear utility British Energy for £12.5 billion ($21 billion), is in debt to the tune of €54 billion.

Hugues de la Presle, director of Infrastructure Credit Ratings at Standard & Poor’s, said: “We are closely monitoring utilities involved with new build nuclear. Utilities’ war chests have limited scope for new build nuclear and credit ratings would be in jeopardy if their CAPEX programmes continue to remain high. Standar & Poor would consider off balance sheet new build nuclear as a strategic investment and strongly economic.” He added, utilities may prefer to extend the lifetime of their existing fleets, as it delays both decommissioning costs and CAPEX spending.

Raising equity for the building of nuclear power stations is problematic – banks have shied away from nuclear power due to the risks. According to Alexandra Boleslawki, global head of power project finance at Calyon, the investment banking arm of France’s Credit Agricole, banks “won’t touch new build nuclear unless the risks regarding construction and development are allocated to either the state or the utility involved.”

The economics of nuclear power are somewhat anathema to the banking sector – very high upfront costs with a very long and uncertain payback time of 30-35 years – and the credit crunch has done little to allay these concerns. Indeed, the recession appears to have claimed the controversial Belene nuclear plant in Bulgaria. In late July, Deputy Prime Minister Simeon Djankov spoke of an 80 per cent chance that the Belene project would be stopped due to a lack of state funds and the difficulty of raising private finance.

There have been severe doubts about the controversial Belene project from day one. More than a dozen major banks, including Citibank, Credit Suisse and Deutsche Bank, turned down funding for the project as it was deemed that building untested Russian reactors in an area prone to large earthquakes was simply too risky.

For banks to warm to nuclear power, says Societe Generale’s director of corporate and investment baking Xavier de Rollat, they need more certainty about how the electricity generated by new nuclear power stations will be paid for. “The market cannot take both the uncertainty of power prices and of dispatch – one or the other has to be fixed.”

In much of Europe, however, the days of the state building nuclear power plants are over and it will be for the private sector to deliver the goods. The UK is in the unique position of having a foreign-owned, state-controlled utility, EDF, in charge of its privatized nuclear industry. Both the current Labour government and the Conservative opposition appear to have ruled out subsidy for any new nuclear plant, but that has not stopped the utilities from repeatedly asking for help.

Barely a week passes without Vincent de Rivaz, head of EDF’s UK operation EDF Energy, calling for a ‘level playing field’ with renewables – a very thinly veiled request for state support – be it with a fixed carbon price/carbon tax, power purchase agreements underwritten by the state or the extension of the Renewables Obligation subsidy scheme to include nuclear power.

In the US, utilities have succeeded in front-loading utility rates to help pay for new nuclear reactors. Florida Power & Light customers will help finance four new reactors that way, while Georgia Power customers will finance two. This market-based approach has yet to be considered in Europe; adding yet another controversial levy on consumer bills may be a bridge too far in some nations.

With the problems of energy security, the climate change agenda and the prospect of falling European capacities because of the closure of aged and dirty fossil fuel power plants at the front of politician’s minds, nuclear power is perhaps the most attractive solution. To effect what amounts to government policy in liberalized markets, however, there may be no alternative but for governments to dangle carrots and wield a big stick.

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