EC takes detailed look at Europe’s nuclear future

6 April 2016

The European Commission's (EC's) latest Nuclear Illustrative Programme (Pinc) puts the projected cost of investments in the complete nuclear fuel cycle in the European Union (EU) for 2015 to 2050 at €650- 760bn ($738-863bn). Investment in new nuclear stations needed to replace ageing nuclear reactors to maintain a stable nuclear generation capacity over the next 35 years will amount to €350-450bn, Pinc says. Some 90% of the existing nuclear capacity will need replacing by 2050. As a low carbon technology and significant contributor to security of supply, nuclear energy is expected to remain an "important component" of the EU's energy mix in 2050, the report concludes.

The EC is mandated to periodically issue a new Pinc under Article 40 of the European Atomic Energy Community (Euratom) Treaty in order to indicate non-binding targets and programmes for nuclear production and any necessary investment. The last Pinc update was released in 2008 before the March 2011 Fukushima-Daiichi accident. The 2008 Pinc did not include any investment cost estimates, but instead provided a snapshot of the status of nuclear sectors in various EU member states.

Maroš Šefcovic, vice-president responsible for Energy Union, said: "Based on member states input, the Pinc provides a useful photograph of the whole lifecycle of nuclear power in Europe: from the front-end of fuel fabrication, to safety upgrades and long-term operations, to the back end of the cycle, including waste management and decommissioning. The Pinc contributes to the implementation of the Energy Union strategy, by looking into relevant member states' investments from the perspective of safety, security of supply, diversification, technological and industrial leadership."

The new report estimates that electricity generation from nuclear will decrease by 2025 due to the phase-outs of nuclear energy in some states, but the trend will reverse after 2030 with generation capacity reaching 95-105GWe by 2050. Current EU capacity is estimated at 120GWe. In relative terms, the share of nuclear energy will fall from a 27% today to about 20% in 2050. According to Pinc, more than 50 of the 129 reactors in commercial operation in the EU are to be shut down by 2025. The report estimates lifetime extension and long term operation (LTO) costs at €45-50bn for existing reactors by 2050. The average LTO extension period is expected by most national regulators to be 10-20 years.

Based on the latest available data from 2014, total investment of €253bn will be needed by 2050 for the back-end of the fuel cycle. Decommissioning will require €123bn, while €130bn will be invested in radioactive waste and used nuclear fuel management and deep geological disposal. Pinc says approximately € 133bn of these expected costs have already been set aside in dedicated decommissioning and radioactive waste management funds. Of the EU's 16 nuclear countries, only the UK had enough money ring-fenced to cover the coming financial needs, the Pinc said.

As to the front-end of the fuel cycle, in terms of the European Energy Security Strategy, the EC aims to ensure a well-functioning internal market for nuclear fuels and to guarantee security of supply. The focus in the coming years will be on modernizing enrichment capabilities to maintain the EU's technological leadership, Pinc said. Nuclear fuel manufacturing capacities in the EU will be enough to cover the needs of western-designed reactors, while fuel licensing and fabrication for the EU's Russian-designed reactors would take "a few years" depending on the available investment and market environment.

The new Pinc said the EU nuclear landscape "has undergone significant changes" including comprehensive risk and safety (stress tests) culminating with the adoption of "landmark legislation on nuclear safety, radioactive waste and spent fuel management and radiation protection". With reference to the EU regulatory environment, the EC recognises that some new "first of a kind" projects in the EU have experienced delays and cost overruns. It suggests a policy based on cooperation between regulators when licensing new reactors and on standardisation of nuclear reactor design by the industry.

Synchronising licensing requirements should ensure that a design qualified as safe in one country does not have to be substantially modified to meet licensing requirements elsewhere, therefore reducing time and costs. Industrial standardisation should ensure faster procurement processes, higher comparability and more transparent safety standards as well as increased capacity of operators to control technology and knowledge management.

In terms of new regulation, the report said the EC will later this year propose an update to Article 103 of the Euratom Treaty to strengthen the EC's "ability to ensure" that new investments and bilateral agreements with third countries comply with the Treaty and meet security of supply requirements. The EC has proposed an amendment to Article 103 of the Euratom Treaty that would require member states to obtain the opinion of the commission on nuclear agreements or contracts with third countries before concluding them. The EC will then inform the member state, within a month, if the agreement or contract does not comply with the Treaty. "The application of this recommendation should reduce the need for the commission to object to the conclusion of agreements, and thereby reduce the risk of delay in their conclusion", the EC said.

The Pinc said the EU must maintain its technological leadership in the nuclear field to give business opportunities for European companies and help support EU growth, jobs and competitiveness. Suggested initiatives include the future deployment of Generation-IV closed-cycle nuclear systems, research and development on small modular reactor (SMR) technology, progress at the International Thermonuclear Experimental Reactor (Iter) in France, and maintaining an "appropriate" level of nuclear expertise through continuous training and education.

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