Belene nuclear power plant in Bulgaria photo: Jan Haverkamp, Greenpeace. Myths and Facts: EU policy & nuclear energy

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1 Belene nuclear power plant in Bulgaria photo: Jan Haverkamp, Greenpeace Myths and Facts: EU policy & nuclear energy

2 25 years after the catastrophe of Chernobyl, the nuclear industry was optimistic about a renaissance, with construction of new nuclear power plants (NPP) in Finland and France and plans for new plants in Europe, India, China and countries of North Africa and the Middle East. This enthusiasm for nuclear power was dampened in March 2011 with the winds and rains of the tsunami that lead to the explosion and meltdown of three reactors at the Fukushima plant in Japan. Countries with vibrant anti-nuclear movements like Germany closed eight reactors and decided to phase out nuclear power by Belgium took a similar decision to phase out nuclear by 2025, and a June 2011 referendum in Italy confirmed its decision not to built nuclear power plants. Even the pro-nuclear government in China suspended its nuclear power program for over a year. As of 2011, nuclear power produced 27.4 percent of the commercial electricity in the EU (World Nuclear Industry Status Report 2012). Nuclear power in the EU 14 of 27 member states have nuclear reactors. A closer looks at the existing and planned power plants reveals a number of common concerns, ranging from public opinion and finding the investors and financing.

3 Country Number of reactors Percentage of nuclear in the electricity mix (2011) Plans for new reactors Belgium 7 (2 recently down due to flaw in reactor vessel since 8/2012) about 50 % Bulgaria 2 35% Ongoing plans for Kozloduy 7, early stage Czech Republic 6 33% Temelin 3 and 4, environmental impact assessment being discussed Finland 4 about 30% Olkiluoto 3 under construction, 7 years behind schedule; plans for 2 more reactors, difficulty in finding investors France 58 75% Flamanville 3 under construction, behind schedule and massive cost overruns; plans for another plant; the old plant Fessenheim is set to be closed in 2015 Germany 9 17,7% Hungary 4 34% Netherlands 1 4% Paks 2, environmental impact assessment under way, collecting views from neighbouring countries Plans for Borssele 2, put on hold for several years as investors decided the project was not commercially attractive Romania 2 19% Plans for Cernavoda 3 and 4, but a lack of investors Slovakia 4 50% Mohovce 3 and 4 under construction Slovenia 1 38,5 % Talks about a new reactor, Krsko 2, at an early stage Spain 7 20% Sweden 10 39% United Kingdom 16 19% Plans to substitute old reactors with new ones; several investors withdrew due to economic uncertainty; investor EDF insists on UK government guaranteeing a fixed electricity price considerably higher than what is being paid now Estonia, Latvia, Lithuania Poland Visaginas NPP in Lithuania, jointly planned with all three Baltic states; rejected in referendum in October 2012, government trying to move ahead despite clear vote of population Plans to develop nuclear power by launching two 3000 MW plants before 2030

4 Public opinion Following the disaster at Fukushima, political and popular opinion in support of nuclear declined remarkably. Even in those countries traditionally in favour of nuclear power like Bulgaria, France and Finland, scepticism and resistance towards nuclear power is on the rise. According to a 2011 poll by the BBC, opposition to building new reactors in France rose from 66 to 83 percent. A January 2013 referendum in Bulgaria about whether to revive plans for the nuclear power plant at Belene resulted in a 60 percent majority in favour of the project. Yet\ the vast majority of Bulgarians had voted with their feet only 21 percent of voters participated in the referendum. Further discussions in the Bulgarian parliament confirmed that plans for Belene would continue to be put on hold. Another recent referendum on the Visaginas NPP in Lithuania resulted in nearly two thirds of the people voting against building the project, with over 52 percent voter turnout. However the Lithuanian government appears poised to ignore the results of this non-binding referendum. 1: Anti-nuclear protest in Berlin (2009) photo: urgewald

5 Finding investors & financing While public opinion against nuclear power might be snubbed, the other difficulty is harder to ignore. Plans for new nuclear build face the challenge of finding investors and the large amounts of money needed for construction. Belene in Bulgaria was given on due to a lack of investors. Similarly in 2011 Cernavoda in Romania lost three of its six potential investors (RWE, GDF Suez and Iberdrola) because of economic and market insecurity, and the project has not been able to find new investors. The planned Fennovoima NPP in Finland is struggling to find new investors after energy utility E.ON Finland withdrew from the consortium in October In March 2012, E.ON and RWE withdrew from NPP plans in the UK, as did the British energy company Centrica in February 2013 in the case of new NPPs at Hinkley Point (Sommerset) and Sizewell (Suffolk), together with the French energy utility EDF. Centrica s reasons for withdrawal were quoted as "cost and time scale. The lone investor EDF now insists that the UK government guarantee an electricity price roughly double the current rate, with customers to cover the costs. If the government doesn t act on the demand, EDF threatens to walk away from the deal. The uncertainties in building new nuclear plants add to the difficult list of decisions investors face, since nuclear power is not only the most controversial and dangerous form of energy generation but also one of the most expensive ones, making nuclear an economic liability for the project promoters. This view is shared by credit rating agencies. The 2012 World nuclear industry status report finds that five of eleven nuclear companies were downgraded by Standard & Poor s in the past five years. Moody s also assigns a higher risk profile to companies that pursue new nuclear generation plans. Citigroup global markets issued a paper in November 2009 New nuclear the economics say no in which it warns that developers of new nuclear power stations face five substantial risks: planning, decommissioning and waste, construction, power price and operational. The latter three are called corporate killers that could each bring even the largest utility company to its knees financially. 2: Britain s Nuclear Plans at a Critical Point, New York Times, : Citigroup Global Markets New Nuclear The Economics Say No November 2009, p.3 The climate excuse One way in which the UK wants to help nuclear companies overcome the problem of high construction costs and the uncertain electricity price is with subsidy called contracts-for-difference. This subsidy would reform the electricity market by fixing a minimum price for nuclear, wind and solar-generated power, as carbon free energy sources. It is unclear whether this will pass the British parliament or receive approval from the European Commission because of rules on state aid. This is just one

6 example of rebranding nuclear energy as green to suggest it as an appropriate solution to combat climate change. NGOs and scientists warn against that this approach, since the financial, political and institutional commitments required to build new plants are so huge that they will undermine support for new technologies and energy efficiency measures, which are vital to achieving a low carbon economy. Nuclear power and renewables are not complementary to another and cannot be used in parallel to reduce carbon emissions. In the words of the Warwick Business School, On the contrary, the government has to make a choice between a nuclear future and one dominated by renewable generation and the more efficient use of energy. 4: Reuters British nuclear support plans flout EU rules lawyers, : Warwick Business School, 2006: New Nuclear Power: Implications for a Susutainable Energy System Cathrine Mitchell and Bridget Woodman, March 2006, p. 6 And where does the EU and its banks come in? EU politics are often about who has the After the Fukushima accident, DG Energy decision-making authority between reported to the European Council and the countries and the Commission. Member European Parliament on the results of the States decide on their energy mix and whether national nuclear stress tests performed by or not to use nuclear as a source of energy. The the European nuclear regulator group, an Commission is supposed to ensure the functioning of the common market for electricity The results found serious flaws in many association of EU nuclear regulators. and gas. It also develops strategies to steer the European plants, which DG Energy believes: future direction of Europe s energy policy, highlights that European nuclear power such as the 2050 energy roadmap or the green plants have generally high safety standards paper on 2030 climate targets. The Commission is also in charge of external energy rela- almost all of them. but further improvements are needed in tions outside of the EU. The only safe way to run a nuclear power The Commission supports nuclear energy, as plant is to stop operating and decommissioning the plant. Safety upgrades can in stated by DG Energy: Through the Euratom Treaty, the EU aims to ensure safe and sustainable use of nuclear energy by developing and plants, as one case from Ukraine demon- fact be used to prolong the lifetime of old implementing a common EU legal framework strates. The country launched its Safety that meets the highest standards of safety, Upgrade Programme that appears intended security and non-proliferation. It also helps to improve the safety at Ukraine s 15 plants, countries outside the bloc to meet these but the programme will actually prolong the standards. lifetime of 12 old reactors. The director of

7 the state energy utility said that without the programme, the lifetime extension of the old nukes would be impossible. One of Europe s public banks, the European Bank for Reconstruction and Development (EBRD), supported the programme with a EUR 300 million loan. How running old NPPs beyond their planned lifetime improves anyone s safety must be a well-kept secret known only to the EBRD. The European Investment Bank (EIB), the EU s house bank, might also participate in the Ukrainian programme through a Euratom loan facility, from which Ukraine is seeking an additional EUR 300 million. The EIB has in the past consulted for Euratom, appraising the economic and financial conditions of a series of nuclear power projects including: Kozloduy 5,6 in Bulgaria Mochovce 1,2 in Slovakia Cernavoda 2 in Romania and K2R4 in Ukraine. When nuclear power was in its infancy, the EIB provided loans for to Germany, Belgium, France and the UK for nuclear power plants, an approach from which it has refrained in recent years. Both the EIB and EBRD are reviewing their energy policies this year, which is an opportunity to pressure them to exclude financing for nuclear power in their future policies. 6: 7: Belene nuclear power plant in Bulgaria photo: Jan Haverkamp, Greenpeace

8 Mochovce nuclear power plant in Slovakia photo Bankwatch This publication has been produced with the financial assistance of the European Union. The contents of this publication are the sole responsibility of Counter Balance and can under no circumstances be regarded as reflecting the position of the European Union.