Now, apparently, another turning point is coming. Energy is experiencing an extraordinary crisis and Western Europe is waking up to a reality that many experts – including the German ones – have long warned against. Electricity and gas prices are reaching dizzying heights, leading governments to push for further regulation of the entire sector, which may exacerbate the distortion of the market environment. As usual, the crisis has many different causes – from the uneven development of the economy that the world has been experiencing since the onset of the pandemic, to the vagaries of the weather.
Farmers tend to be ridiculed for complaining about the heat and the winter, but it’s similar with today’s energy – complicated by cold spring weather in Europe, summer heat and increased demand for air conditioning in Asia, insufficient wind power off the coast in various parts of the world, but also floods, which limit the potential of hydropower, or snowstorms in Texas. And all this at a time when the world must pay more and more attention to the threats of global warming.
The world’s largest polluters and their emission targets
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Part of the solution
In this situation, naturally, there are many more voices saying that the world lacks more stable, weather-independent and at the same time emission-free power plants. It is clear that only atomic reactors meet all these conditions today. Scientists from the UN Intergovernmental Panel on Climate Change or the European Union’s expert committees consider the core to be a “part of the solution”. Western Europe, which today accounts for about a quarter of the world’s reactors, but so far remains a “bottleneck” in terms of further development of nuclear energy. Time will tell whether the current crisis will help eliminate it.
It does not make sense to draw exaggerated conclusions from the statements of a number of German experts against atomic exit – the attitudes of politicians and public sentiment rather suggest that the Federal Republic, like Austria or Luxembourg, remains “buried” in its anti-nuclear trenches. It will be interesting to follow developments in other countries – warnings about premature closure of reactors are increasing in Belgium, Spain or Sweden. Even before the current crisis, Dutch and Swedish politicians came up with proposals for the construction of new nuclear rectors. Public opinion in Italy, whose people have rejected nuclear energy twice in a referendum in the past, is now more inclined to believe that it will not be possible without an atom in the future.
However, the future of Western European nuclear energy is decided mainly in two key countries – France and the United Kingdom. The attitudes of politicians and the public there differ significantly from the situation in Germany. But both countries are also struggling with their existing new nuclear reactor projects (Flamanville and Hinkley Point C). Innovative Britons have been “burned” a few times in the past, but they continue to look for suitable models for building and financing nuclear projects. This will probably remain an inspiration for other countries, but it will not be within the European Union. The EU nuclear camp has weakened sharply since Brexit. The French retained the role of “puller” within the EU, although their activity seemed to be waning in recent years. Uncertainty about the future of their own nuclear industry is exacerbated by the delayed reform of the power company EDF, the nuclear part of which should become wholly owned by the state.
The German paradox
Many Germans, as well as their neighbors, feel that Berlin is setting the tone for the further development of world energy. In the case of nuclear reactors, however, the exact opposite is true. Among the seven currently largest economies in the world, Germany is the only one that wants to abandon nuclear energy. Before the last US presidential election in 48 years, Joe Biden was the first Democratic candidate whose program included positive references to the peaceful use of the atom for energy production. Nuclear resources were also supported by his predecessor Donald Trump, who otherwise agreed with the Democrats (not only) on energy for virtually nothing. The new Japanese Prime Minister Fumio Kishida intends to restart nuclear reactors in the country that experienced Fukushima.
There is no indication of another big turnaround in Germany. He now has the last six reactors left to run until the end of next year. The plan for an accelerated departure from the core came two decades ago by the government of the Social Democrats and the Greens, Angela Merkel’s cabinet first effectively abolished it and reaffirmed it after Fukushima. Merkel’s successor at the head of the Christian Democrats, Armin Laschet, called the decision on a nuclear exit too fast to be wrong, but added that nothing could be done about it. And the SPD and the Greens seem to be heading for the next government in Berlin again…
From a European point of view, it is important for the Germans to realistically reverse, at least not to hinder the development of nuclear energy. Until now, Berlin has opposed the European Commission calling investment in nuclear power plants sustainable in the so-called taxonomy, which would facilitate their financing. The argument that nuclear reactors in other EU Member States will help stabilize the European energy system, but may not be digestible for the German public. The Czechs are already well aware of this effect from Austria – for the inhabitants of countries that have decided to leave the core, it is difficult to accept that new power plants will grow in their neighborhood.
State interest
However, the German position is far from the only problem. In addition to the traditional weaknesses of nuclear energy, which include in particular the storage of spent fuel, it is an investment requirement for the construction of new reactors. For private investors looking for the fastest possible return, such projects are not attractive – although they can provide emission-free, reliable and, in terms of total lifetime, relatively cheap energy for many decades. The state must play a key role, similarly to building transport infrastructure. This is also the reason why the French government intends to take over the nuclear part of EDF completely. But it finds itself in a tongs – the European Commission, in the interests of competition, is calling for a more rigorous separation of the various parts of EDF, while the unions are protesting against any major reform.
The state is also gaining ground in the United Kingdom, which has relied more on the private sector since Prime Minister Margaret Thatcher. According to the latest reports, the London government is willing to temporarily take over from the Chinese company CGN a minority stake in the Sizewell C power plant project, which is to be built by the French EDF, and at the same time sanctify the inclusion of new reactors among so-called regulated assets. Consumers would thus pay for the construction at electricity prices on an ongoing basis, but overall the bill for the power plant would be significantly reduced – the cost of expensive long-term financing would be eliminated. And at a later stage, thanks to the regulated assets model, private infrastructure investors could still be involved in similar projects.
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