The oddly plural phrase “European Communities” is not, as one might think, a reference to the 27 member states of the European Union, but to an anachronistic constitutional anomaly. Continue reading »
The debate about the true level of nuclear electricity generation cost is far to be closed. The estimates are regularly reviewed and updated. In the same time, new nuclear builds provide new data. The newest observations stimulate a question about the possible impact of the recurrent cost overruns and delays in on-going construction of EPRs on the electricity generation cost and the competitiveness of nuclear power.
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Two recent public opinion polls taken in the US and Germany suggest that the public opposition to nuclear power is not what it used to be.
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The electricity industry has shown an interest in already completed nuclear power plants. This predates the first examples of interest in new build nuclear power plants forming part of a “nuclear renaissance”.
There are two major drivers for renewed interest in nuclear power in many countries of the European Union: the need for secure electricity supplies and the need to reduce greenhouse gas emissions.
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Under the former regulated utility regime and regulatory arrangements, many of the risks associated with power plant construction costs, operating performance, fuel price changes, and other factors were borne by consumers rather than investors. The current context for new nuclear build in power markets is significantly different with producers bearing much of the risks unless some are transferred onto other stakeholders through long term contracts and/or innovative financing arrangements.
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France’s antitrust authority recently ordered the electric utility EdF to offer rivals on the deregulated small-consumer market access to installed capacity in nuclear power generation. An initial auction for allocating 500 MW took place in March. 1000 other MWs will be allocated in the remaining of the year. Did the authority’s decision go far enough? Or did it go too far?
Nuclear power has high capital costs and low variable costs, so that its commercial viability depends critically on the cost of capital – the rate of return it must pay investors – and the price of electricity. Pessimists have claimed that liberalised markets are too risky for new nuclear investment without special support. But is it necessarily correct that nuclear power is a risky and therefore financially costly choice? Continue reading »
There are two major drivers for renewed interest in nuclear power in many countries of the European Union: the need for secure electricity supplies and the need to reduce greenhouse gas emissions. Nuclear power is a very low source of greenhouse gas emissions, but even the most ambitious nuclear new build plans in Europe address only the issue of replace nuclear with nuclear rather than the more challenging policy issue: whether to decarbonize the European electricity system with nuclear power. European historical emissions have, of course, benefited from earlier investments in nuclear generation, but it is not clear that nuclear power will play a larger role than it has previously. Continue reading »
If there is nuclear power in the generation mix, whether in liberalised electricity markets or in vertically integrated monopoly electricity systems, one tends to always find it playing a baseload role. The only examples where nuclear power output is adjusted to follow changes in demand are in those countries, such as France, where nuclear power is the technology used for the vast majority of electricity production and there is insufficient other scope for flexibility. Continue reading »