New nuclear makes economic sense for Europe, says WEC

2 February 2007

Encouraging investment through stable, consistent and predictable energy market rules are the key factor in determining the future of nuclear power in Europe, a new report from the World Energy Council (WEC) concludes.

The report points out that there are solid economic reasons to support the development of nuclear power in Europe, with the economics behind nuclear power particularly attractive considering that planned lifetime extensions, capacity increases and licence renewals can further reduce costs. Although the final costs per kWh depend on local legislation and taxes, assuming a stable political environment, clear regulatory frameworks governing the site location, decommissioning regulations and other aspects, these costs can reach €40/MWh, including future expenses associated with decommissioning and waste disposal. However, under specific circumstances they can be considerably lower, around €30/MWh with a low discount rate and/or a large series of developments. However, while development of a single unit and a higher discount rate may push this up to €55/MWh, if carbon dioxide emissions were ever penalised, the study finds nuclear would be a particularly competitive alternative.

The report does acknowledge that major public concerns remain over the management and disposal of spent nuclear fuel, but points out that the actual amount of spent nuclear fuel produced globally every year is some 12,000 tonnes, which compared to the 25 billion tonnes of GHG released annually from fossil fuels is relatively small. Were spent fuel to be reprocessed, this figure would be even lower; about 4% of the original fission products would be buried and the remaining 96% of useful uranium and plutonium recycled and reused, the WEC document states.

The report also highlights the need for added support for nuclear R&D with a special focus on Generation 3+ and Generation 4 technologies, which are expected to be available between 2030 and 2040. They are expected to increase efficiency by almost 80 times the current levels, lower costs and decrease proliferation risks while reducing by almost 100 times the need for natural uranium and the production of long lived radioactive waste. They are also expected to extend its application to non-electricity products such as hydrogen, synthetic hydrocarbon fuels and process heat for the industry.

The report also points out that investment programmes could be accelerated if a more simplified and rapid process for granting construction and operational licences were available to potential investors. There is also a need to open up the internal energy markets throughout the entire European Union, WEC says. In addition, the study identifies a series of key conditions that will need to be met to ensure the future success of nuclear power in the European electricity market including:

• Stability, consistency and predictability of market rules to ensure investor friendly environment

• Independence and transparency of safety regulations

• Agreement on a common technically feasible, economically efficient and publicly acceptable framework for waste disposal

• A simple and rapid process for granting construction and operational licences

• Standardisation and scale effects for reactor manufacturers

• Support for nuclear R&D, and in particular for Generation 4 technologies

• Equitable distribution of risks and rewards between all involved.

Gerald Doucet, secretary general of WEC concluded: “Nuclear Power has an important role in the energy mix if we are to achieve sustainability and improve global accessibility, acceptability and availability of modern energy services.”


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