Prospects for new nuclear in Europe 11 May 2015

Over a quarter of the European Union’s electricity generation is from nuclear power. But a large number of reactors in EU member states are approaching the end of their operating lifetimes and there are several challenges to maintaining the share of nuclear over the coming years. By Stephen Tarlton

In the 2014 edition of its World Energy Outlook, released last November, the International Energy Agency stated: "Even with assumed lifetime extensions, half of EU nuclear capacity is retired in the period to 2040."

This equates to a loss of around 60GWe of EU nuclear capacity over the next 25 years. Simply replacing this would require 50 new reactors, assuming an average capacity of 1200MWe.

The EU comprises 28 member states, 14 of which host a total of 131 operating nuclear power reactors. The average age of these reactors is around 30 years, so with design lifetimes of up to around 40 years, there will of course be a large number of reactor retirements over the next 20 years or so, even if many reactors operate beyond their design lifetimes.

Although Germany has made a political decision to curtail reactor lifetimes, it is generally an economic "no-brainer" to extend operation beyond the design lifetime for the vast majority of reactors. But in addition to plant lifetime extension, new reactors will have to be built in increasing numbers if there can be any chance of renewed nuclear growth in the EU.

At present, only four reactors are under construction in three EU member states: Finland (EPR at Olkiluoto), France (EPR at Flamanville) and Slovakia (2xVVER-400 at Mochovce). Beyond these, the World Nuclear Association (WNA) lists the following EU countries as having planned EU reactors: Bulgaria (1), Czech Republic (2), Finland (1), Hungary (2), Lithuania (1), Poland (6), Romania (2) and the UK (4). (A reactor described as "planned" would be generally expected to start operation in about a decade's time, although a startup date of around 2030 would be more realistic for most of these reactors.) The WNA lists 14 further reactors as "proposed" (ie expected operation mostly within 15 years, but again these particular reactors would probably require a slightly more relaxed schedule). The Table lists operating, planned and proposed reactors in the EU member states.

Should the majority of these planned and proposed reactors get built, along with operating lifetime extensions for most of the 131 existing reactors, the nuclear decline in the EU will slow down and then reverse over the next two decades. The first step is to establish the new generation of reactor designs, a process that faces several challenges.

France

EU nuclear power generated 876.8GWh (gross) in 2013, nearly 27% of the total 3261.1TWh from all sources. Of the nuclear-generated electricity, France accounted for 423.7TWh, or 48% of the bloc's nuclear generation. To a large extent, therefore, if the EU is to have any chance of maintaining the current levels of nuclear-generated electricity during the first half of this century, it will largely depend on the national nuclear policy of France.

French president Francois Hollande's 2012 election pledge was to limit nuclear's share of French generation to 50% by 2025, and to close France's oldest nuclear power plant, Fessenheim, by the end of 2016.

Last October the French National Assembly (the lower house of parliament) passed the Energy Transition for Green Growth bill, which calls for cutting the share of nuclear in electricity generation to 50% by 2025, with a nuclear power capacity ceiling at the present level of 63.2GWe. Ratification of the bill is expected during the first half of this year.

For the nuclear industry, the situation looks bleak. However, even if this law were to be passed - and assuming that it does not get overturned following the next general election in May 2017 - it would still be possible to continue to operate all the existing plants, including the 1650MWe EPR under construction at Flamanville 3, with the exception of the two 880MWe units at Fessenheim. Should France's non-nuclear capacity grow sufficiently, then a reduction of the nuclear share of generation can take place without a loss of nuclear capacity. In fact, given the age of the French fleet, it would be difficult to maintain nuclear capacity at current levels, even if existing reactors continue to operate beyond their 40-year design life. (Later this decade, a decision on a further ten years' operation will be made.)

In the meantime, EDF continues construction of Flamanville 3 in Normandy. Work on the 1650MWe unit commenced in December 2007. The reactor was originally expected to start commercial operation in 2013, but this has now been pushed back to 2017. A second EPR in France was planned to be built at Penly, but the project was put on hold indefinitely in 2013 on the basis of there being insufficient demand. It therefore seems likely that it will be several years before EDF starts construction on a new French unit.

United Kingdom

In February this year, EDF announced that a final decision on the Hinkley Point C project is taking longer than had been expected, in part due to ongoing negotiations with Chinese partners. The decision is now expected to be taken later this year, but there are a number of factors that could further complicate matters in the meantime.

EPR vendor AREVA has not had a reactor order for several years, and the company is currently struggling financially - as reflected by a halving of its share price over the last year. Both EDF and AREVA are largely state-owned (85% and 87%, respectively), so the French government might exercise some influence on the Hinkley Point C decision, notwithstanding the current administration's aversion to nuclear power. The French government could simply order EDF to go ahead with Hinkley Point C (and possibly also Sizewell C), or perhaps decide to spin off the reactor division of AREVA and possibly incorporate it into EDF.



Nevertheless, given the amount of preparation that EDF Energy has carried out in recent years - not just on the site and licensing, but in its work to win over public and political support - it would be difficult for the company to back out of constructing the two EPRs at Hinkley Point. More likely would be for a decision on the Sizewell C project (also a two-unit EPR plant) to be pushed back by a few years.

The UK is also a candidate for the EU's first AP1000 and ABWR reactors. Current plans are for two-unit ABWR stations at Wylfa Newydd and Oldbury B, and a three-unit AP1000 plant at Moorside. All of these projects are on track to start up in the mid- to late 2020s.

Finland

In addition to the EPR under construction at Flamanville in France, an EPR is under construction at Olkiluoto 3 in Finland. This project is well known, especially its delays and cost overruns. The latest schedule foresees the completion of construction - which commenced in May 2005 - and start of commissioning in mid-2016, with operations following in 2018.

Olkiluoto operator TVO had been considering the construction of a second EPR (or a competing reactor design) at that site. TVO initially expected to have the unit on line about 2020, but in 2014 it applied for a five-year extension of the government approval for the project, due to the delay with the construction of Olkiluoto 3. However, the extension was not granted, and the company has only until June 2015 to apply for a construction licence.

A June 2015 licence application deadline was also set for the project to construct a Russian reactor at Hanhikivi. The Fennovoima joint venture (of Russia's Rosatom, which holds a 34% stake, and the Voimaosakeyhtiö consortium of Finnish industrial and energy companies) had considered building an EPR or Toshiba ABWR, but since mid-2013 has instead focused on a Russian AES-2006 plant with VVER-1200 reactor.

First power is planned for 2024, but there are a number of conditions that Fennovoima needs to meet. Firstly the government has insisted on at least 60% Finnish ownership in the project. As of early 2015, the Voimaosakeyhtiö consortium has 55.5% funding commitment from its members.

A second consideration is that the project has to submit a waste disposal plan by the summer of 2016. Both these issues may be addressed by Fortum's plan to take up to 15% in the project. The Finnish utility owns the Loviisa nuclear plant, and also owns 40% of high-level waste disposal company Posiva.

A third condition relates to the fuel supply for the reactor. In May 2014, the European Commission issued a Communication on European Energy Security Strategy, which stated that "the possibility of fuel supply diversification needs to be a condition for any new investment, to be ensured by the Euratom Supply Agency."

Other countries' plans

The other EU country that has a high chance of constructing the first third generation VVER is Hungary. At the beginning of 2014, an agreement was signed with Russia to build two new VVER reactors at Paks, supply their fuel and train staff for their operation. Russia has also agreed to provide a loan for construction of the units. The first new unit is to be commissioned in 2023.

Hungary would clearly benefit from new nuclear: the country is a net importer of electricity, demand is projected to pick up (though it has been flat in recent years), the nuclear industry is well-established and support for nuclear is generally strong. On the other hand, there are political issues associated with the choice of Russian technology.

Financing is also one of the main hurdles for other EU nuclear projects in Lithuania, Poland and Romania.

In Lithuania, the current proposal is for a Hitachi-GE 1350 MWe ABWR at Visaginas, where the two Ignalina RBMK closed in 2004 and 2009 as a condition of EU accession. The Visaginas project was approved by the Lithuanian parliament in May 2012, but in October 2012, a nonbinding referendum came out against the project. Since then, security of energy supply issues have highlighted the strategic importance of nuclear power. At the end of March 2014, seven parliamentary parties signed the Strategic Guidelines of Lithuania's Security Policy for 2014-2020 agreement, which states that Lithuania's strategic goal is to integrate as quickly as possible into the EU's internal energy market and to implement major energy projects, including the Visaginas plant. Construction start was planned for this year, but is evidently delayed.

Poland's Polska Grupa Energetyczna (PGE) had originally been expected to participate in the project, but withdrew at the end of 2011. PGE has ambitious domestic plans for several nuclear power plants to help diversify the country's fuel mix - 85% of electricity generation in 2013 came from coal.In mid-2013, the Polish government indicated that development of the country's shale gas resources may be favoured over its nuclear plans. Early in 2014 the government adopted a revised programme for the construction of the country's first nuclear power plants. According to that schedule, the location and reactor technology for the first nuclear power plant will be selected by the end of 2016 and the first unit would start up by the end of 2024, with the second unit starting up by the end of 2030. Completion of a second nuclear power plant would be scheduled for 2035. However, in February this year, the country's Deputy Treasury Minister told parliament that he expected the first unit would not start up until 2027.

In Romania, long-running efforts to complete further units at the Cernavoda Candu plant have recently been showing more promise. In November 2013, China General Nuclear (CGN) and state nuclear utility state nuclear power corporation Societatea Nationala Nuclearelectrica (SNN) signed a letter of intent for investment in and development of Cernavoda 3&4. Although CGN itself has no experience of Candu technology, in July 2014 CGN subsidiary China Nuclear Power Engineering Co (CNPEC) signed a "binding and exclusive" co-operation agreement with Candu Energy for the construction of the two reactors. In October state nuclear power corporation SNN designated CGN as the "selected investor" for the project. The units will be updated versions of the Candu 6 design. Cernavoda 3 is reported to be 53% and unit 4 30% complete.

Two VVER-440 units are under construction in Slovakia. However, completion of Mochovce 3&4 is being hampered by cost overruns and legal challenges. In any case, these units will have little bearing on the overall future growth of the nuclear power sector in the EU as a whole, as they are not considered to be Generation III reactors.

Several other EU member states are also mulling building new nuclear units, but the countries covered above have the most advanced plans. The outcome of these plans - in particular those of the two EPRs currently under construction in Finland and France and that planned in the UK - will strongly influence Europe's energy mix over the next few decades.

Nuclear generation in the EU has seen a steady decline over the last decade - from 1008.4TWh in 2004 to 876.8TWh in 2013. This decline will continue as ageing reactors close down, and can only be reversed once the new generation of nuclear plants are established.

About the author

Stephen Tarlton is an analyst with nuclear industry trade body the World Nuclear Association and former editor of Nuclear Engineering International. He is the author of WNA's recent report, New Nuclear in Europe - 2030 Outlook, ISBN 9780955078484