In 1973, at the height of the oil crisis, most of France’s electricity depended on foreign oil imports. The then prime minister, Pierre Messmer, launched the famous Messmer Plan, an ambitious program with the aim of having France generate all its electricity from nuclear power. Four decades later, nuclear energy covers 71% of France’s electricity production. Today, France is the world’s third largest nuclear power producer after the United States and China. Germany and Spain are in eighth and ninth place respectively. Worldwide, nuclear energy accounts for 10.9% of electricity generation. Despite this, nuclear energy has always been questioned and under heavy scrutiny on various issues such as its financial viability, nuclear safety and involvement in the energy transition. The war in Ukraine has accelerated responses to the already intense debate on nuclear energy, forcing member states to take a position on the future continuity of this technology in their energy mix. The war has highlighted Europe’s Achilles heel: its dependence on hydrocarbon imports. The new scenario has made it necessary to redesign Europe’s energy plans. Let us recall the 3 fundamental pillars on which the European energy market must develop: Security of supply, Competitiveness and Sustainability. In 2022, Emmanuel Macron promised to build up to 14 new nuclear reactors in the next 20 years, despite his earlier plans to phase out the pace of this energy source.
Under this French leadership, what is the future of nuclear energy in Europe?
There are currently 436 active nuclear reactors in the world, 103 of which are in Europe, spread across 13 of the 27 EU member states. Around a quarter of all electricity generation in Europe comes from nuclear power and more than half is produced in a single country, France. European countries dominate the world ranking of the share of nuclear power in the energy mix with 14 of the top 15 positions.
In the EU, as many as 14 countries do not produce a single megawatt of nuclear power. These are Denmark, Estonia, Ireland, Greece, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, Austria, Poland, and Portugal. Of these, Italy and Lithuania are the only countries that ever had a nuclear reactor. In the 1960s, Italy produced nuclear energy until a national referendum in 1990 decreed the closure of all plants. In 2011, the Minister of Economic Development, Claudio Scajola, proposed to build ten new reactors again, but Fukushima and a new referendum in which 94% voted in favor of banning construction brought the project to a standstill.
Germany as of March 2011 obtained a quarter of its electricity from nuclear power, using 17 reactors. Only three reactors remain in operation as of October 2022, providing about 6% of the country’s electricity, while more than a quarter of its electricity comes from coal, mostly lignite. Initially all reactors were scheduled to close by the end of 2022, but in October 2022, Chancellor Olaf Scholz decided that the three remaining nuclear power reactors would continue to operate until mid-April 2023 to compensate for the reduction in Russian gas supplies.
Spain, on the other hand, has 7 active reactors that provide one fifth of electricity generation. The country has been gradually phasing out its nuclear programs since the early 1980s, and brought their development to a complete halt in 1994 with the Law on the Organization of the Electricity System. The target scenario of the Integrated National Energy and Climate Plan (PNIEC) envisages the operation of the entire nuclear fleet until the end of 2027, with installed capacity being reduced to less than half by 2030. After that year, the remaining capacity will cease to operate until 2035.
Currently only two EU countries, France and Slovakia, have two new reactors under construction. The French nuclear fleet is made up of 56 second generation reactors (REPs) spread over 18 plants. A third generation reactor ‘EPR’ (European pressurised reactor) is being built in Flamanville (France) with an output of around 1650 MW. Initially scheduled to start up in 2012, it has been postponed due to technical difficulties until 2023. The estimated construction cost, which was initially 3.4 billion euros, has now been estimated at 12.4 billion euros.
Table 1: Nuclear Power in the European Union.
Source: World Nuclear Association.
At the EU Energy Council in Stockholm on 27-28 February 2023, French Energy Minister Agnès Pannier-Runacher invited a dozen countries to form a pro-nuclear alliance. The aim of the alliance is to cooperate more closely in the development of the entire nuclear supply value chain and to promote common industrial projects for the development of new generation capacity as well as new technologies. The signatories to the agreement were 11 countries: France, Bulgaria, Croatia, the Czech Republic, Hungary, Finland, the Netherlands, Poland, Romania, Slovakia and Slovenia. They all share the view that nuclear energy is a tool for achieving climate objectives and ensuring security of energy supply in Europe. Italy, which initially had the position to join the alliance, did not sign the joint statement in the end. Germany, Belgium, Portugal and Spain spoke out against the development of nuclear energy. Spain and Germany point to renewable energies to achieve the targets, with a focus on hydrogen derived from renewable energies such as solar or wind. It should be recalled that, in July 2022, France already secured Germany’s commitment to grant the ‘green’ label to nuclear energy and gas. With this agreement, the European Commission agreed to consider as ‘sustainable’ future investments in nuclear power plants with a construction permit before 2045 and gas plants that emit less than 270 grams of CO2 per kWh until 2031 or less than 100 grams over their entire lifetime.
In France, the law of 17 August 2015 on energy transition introduced a cap on installed capacity of 63.2 GW. Since then, the commissioning of new reactors has been conditioned by the shutdown of older reactors. In addition, this law, together with the energy and climate law of 8 November 2019, set a target of a 50% reduction in nuclear capacity in the energy mix by 2035. However, the war in Ukraine, coupled with the very weakened state of the French nuclear fleet, has caused the national energy plan to be redirected. Of the 56 reactors in the nuclear fleet, nearly two thirds have been in service for more than 31 years, 11 of which are over 40 years old. The average age of the four most recent reactors is 15 years. In September 2022, at the height of the energy crisis, 32 of the 56 reactors were shut down due to corrosion problems among others. This scenario caused serious instability of electricity supply and the most expensive prices in Europe, reaching 2.949 €/MWh for the nearest future products (Q1/2023).
Figure 1: Evolution of France Forward Peak and Base price for Q1/23.
Source : M.Tech platform – Magnus Commodities.
France approves nuclear reactivation law
The President of the Republic, Emanuel Macron has spoken out on several occasions in favour of preserving the nuclear fleet and building new reactors. The president has repeatedly stressed the need to increase electricity supply ‘by up to 60%’ as the country seeks to reduce oil and gas consumption over the next 30 years. On 2 November 2022, energy transition minister Agnès Pannier-Runacher presented to the Council of Ministers the draft law on nuclear reactivation, which was approved on 21 March 2023. This law, which aims to facilitate the development of nuclear energy, is one of the three pillars set by the President of the Republic to move away from fossil fuels and achieve carbon neutrality by 2050. The other two axes of the energy strategy announced in his Belfort speech are the development of renewable energies (law of 10 March 2023) and energy sobriety (efficiency of energy consumption) presented on 6 October 2022 and in the process of being approved.
This new law on nuclear reactivation has approved a series of objectives such as:
- The construction of 6 EPR2 reactors and the possibility of eight more reactors by 2050.
- The cancellation of the objective of reducing the nuclear fleet by 50% by 2035.
- Implementation of provisions to speed up the resolution of disputes concerning procedures for new nuclear installations.
- Toughening of sanctions for plant break-ins.
The road ahead will not be easy, both for those who will go for nuclear energy and for those who will go for other technologies. As far as nuclear energy is concerned, the main constraints are the high costs associated with the construction of nuclear power plants, sometimes several times higher than the costs announced at the outset (i.e Flamanville in France and Olkilkuoto in Finland). Another constraint is maintenance costs, which in some countries, such as France, are a major challenge as the average age of their reactors is 34 years. The cost of reactive waste management is a further constraint, including the creation of new storage sites to cope with the saturation of existing sites. Fission power is also affected by the uranium shortage. The uranium peak, which has apparently already occurred, happened in 2016, although it is still too early for its effects to be felt. France alone consumes 8,000 tonnes of uranium per year, about 13% of global consumption. For this, France, which closed its last mine in 2001, relies on deposits located mainly in Canada, Kazakhstan and Nigeria.
Juan Carlos Romaní|Head of Energy Markets at Magnus commodities