Pitch
EU policy plan: using nuclear energy to finance investment into renewable energy infrastructure and a European super grid.
Description
Summary
The European Union is in dire need of an action plan that will ensure a rapid phase out of fossil fuels, while giving member nations the time and support needed to transition to a 100%-clean energy mix. The European Commission Directorate-General for Climate Action recently reported that the renewables share reached 15.3% in 2012, up from 8.5% in 2005 (EU Energy, Transport and GHG Emissions). However, this increase has only been able to offset the increase in energy consumption and the decrease in the nuclear share; it has not yet allowed for an accelerated fossil fuel phase out. In order to adhere to the RCP2.6 emission and concentration pathway (necessary to limit global mean surface temperature increase to 1.5-2.0°C by 2100) and to the recently updated EU energy and climate targets, the European Union must initiate such a phase out immediately. The use of bridge technologies represents one of the most feasible ways to meet these targets.
The EU x ACT Initiative (The European Union For A Cleaner Tomorrow) aims to do exactly that: utilize nuclear energy as a bridge technology to ensure a smooth transition and adopt a cross-border clean energy program to guarantee maximum efficiency. The EU x ACT Initiative is based on four pillars: reviving the option of using nuclear fission as a bridge technology; imposing a nuclear fuel tax; using tax revenue to invest in nuclear fusion technology, renewable energy infrastructure, Liquid Fluoride Thorium Reactor development and nuclear power plant safety mechanisms; constructing a trans-border HVDC renewable energy grid similar to the DESERTEC concept. The initiative addresses numerous potential challenges, such as: public opinion, reactor safety, nuclear waste management, cost, equity within the EU-28 area, political will and limitations associated with a direct transition to a 100%-renewable energy mix. The EU x ACT Initiative is a broad and comprehensive strategy that promotes ambition and incentivizes innovation.
Category of the action
Reducing emissions from electric power sector.
What actions do you propose?
The EU x ACT Initiative advocates the use of a bridge technology, instead of directly transitioning to a 100%-renewable energy mix. This has to do with the low energy density of renewable energies: it will take a substantial amount of time to build the renewable energy infrastructure necessary to meet 100% of energy demands. During this construction phase, the EU mustn’t rely on fossil fuels. Hence, a transition fuel is needed. The EU x ACT Initiative encourages the use of nuclear energy as a bridge technology, as opposed to natural gas, for two reasons. Firstly, nuclear fission emits extremely low levels of GHGs during operation, while the combustion of natural gas emits 56.1 kilograms of CO2 per GJ (Volker). If the EU wants to adhere to the RCP2.6 pathway, it must phase out all fossil fuels, even those with lower levels of carbon dioxide emissions. Secondly, in numerous European countries, the extraction of gas from shale gas basins is banned. These legal restrictions complicate a gas-based transition to renewable energies. Therefore, the EU x ACT Initiative foresees the use of nuclear fission technology as a bridge fuel, due to its low carbon footprint and the number of already-existent nuclear power plants in Europe.
The first and second pillars of the EU x ACT Initiative are modeled after a German policy plan proposed in October 2010. Had this plan been implemented, the lifetimes of existing nuclear power plants in Germany would have been prolonged by 12 years (until 2036) and a nuclear fuel tax would have been imposed to finance the transition to a 100%-clean energy mix (World Nuclear Association).
The first step to implementing the EU x ACT Initiative is negotiating with member states that have adopted nuclear phase-out policies (e.g. Germany, Belgium and Austria) and persuading them to postpone these plans. The main force driving these anti-nuclear movements was the shift in public opinion after the Fukushima disaster in 2011. Hence, the EU must focus on launching large-scale, awareness-raising advertisement campaigns (e.g. social media campaigns, TV advertisement, think tank speaker events). The public must be informed about the benefits of using nuclear energy and about the measures taken by EU governments to ensure safety. Obvious advantages include: low average lifecycle GHG emissions, the vast energy density of U-235 and the low price of electricity generated in nuclear power plants (relative to renewables). The advertisement campaign should also emphasize that nuclear energy is envisioned only as a bridge technology; the ultimate goal is being able to rely entirely on renewable energies. The public can rest assured that nuclear fission will only be used temporarily, until the transition to a 100%-renewable energy mix becomes feasible (without having to use fossil fuels). Concerns regarding nuclear waste management should be addressed by pointing to the large number of different geological structures throughout Europe. A Europe-wide nuclear energy program would extend the search for a suitable, permanent storage site to the entire European continent, as opposed to a single country. Underground salt mines in northern and eastern Germany could, for example, serve as long-term nuclear waste storage solutions. The EU must also signal its prioritization of transitioning to a 100%-clean energy mix over completing the nuclear phase-out. If these measures end up being successful, it will be easier to convince the member states in question to postpone nuclear phase-outs. Negotiators must stress that these phase-out plans will merely be postponed, not abandoned. If public opinion shifts, political will to enforce the EU x ACT Initiative is likely to heighten as well. This political will can be capitalized on to extend contracts between nuclear energy providers and member states (this obviously only refers to EU member states which already use nuclear power plants to generate electricity).
However, member states should be encouraged to shut down and decommission the oldest and most hazardous power plants. EURATOM, the European Atomic Energy Community, would be tasked with setting standards for these shutdowns and carrying out power plant assessments. This institution should also be given the jurisdiction over the first two pillars of the EU x ACT Initiative. The Committee on Industry, Research and Energy (ITRE Committee) should oversee the implementation of the last two pillars.
An essential component of the EU x ACT Initiative is the development and construction of Liquid Fluoride Thorium Reactors (LFTRs), which are a type of thorium-based nuclear power plant. These reactors produce less radiotoxic waste than power plants that use the uranium fuel cycle (up to two orders of magnitude less). LFTRs are also more compact, have a built-in self-shutdown mechanism and are designed to be meltdown proof. Furthermore, thorium is three times as abundant as uranium in the Earth’s crust. Thorium mining is also safer than uranium mining. Lastly, it is very unlikely that a thorium reactor’s by-products can be used to build a nuclear weapon (Sorenson). In accordance with the EU x ACT Initiative, the ITRE Committee would direct funding towards the construction of small-scale proto-LFTRs and towards assessments of re-purposing options. LFTR technology is being developed and seems to be very promising. However, design difficulties stemming from the toxicity and viscosity of molten salt coolants must be tackled before commercialization can commence (Sorenson).
The second and third pillars of the initiative call for the imposition of a nuclear fuel tax and for investment in renewable energy infrastructure, nuclear fusion technology, safety measures etc. The tax rate would be set at 145€ per gram of nuclear fuel (as was suggested in the 2010 proposal) (World Nuclear Association). This rate must remain subject to revision and must change with the price of electricity. The cost of paying the nuclear fuel tax must be less than the cost of decommissioning existing power plants. Investing in nuclear energy must remain profitable; otherwise there will be no incentive for energy companies and governments to comply with this initiative. Moreover, to further spur the growth of the renewable energy sector, the EU could lower the individual tax rate for nuclear energy companies that signal their intent to invest in alternative energies, alongside running and maintaining their NPPs.
45% of the nuclear fuel tax revenue would be used to subsidize large-scale renewable energy infrastructure and the completion of the HVDC grid. These subsidies are meant to incentivize companies within the energy sector to shift resources from fossil fuels to renewable energies. The subsidies could also be distributed in the form of corporate income tax credits; in this case, the nuclear fuel tax revenue would be used to balance government budgets. 12% of the nuclear fuel tax revenue would be directed towards further research into renewable energy sources and energy-efficient technology. 8% of the revenue would be allocated to safety provisions for NPPs (coastal barriers, self-shutdown mechanisms, renovation, monitoring etc.). 10% of the revenue would be invested in the ITER project to enhance the development of nuclear fusion technology. Another 10% would go towards LFTR development and construction. 3% would be given as aid to EU countries that currently have no nuclear energy program but are keen to jumpstart one and are restricted by financial barriers. 2% of the revenue would be directed towards the development of a permanent nuclear waste storage site. The remainder of the revenue (10%) would be used to subsidize household consumption of small wind turbines and solar panels on a national and local level.
The last pillar of the EU x ACT Initiative to be discussed is the European super grid. In 2009, the DESERTEC Foundation publicized its plans for harnessing sustainable power from sites where renewable sources are abundant and then transferring this power to where it is needed using HVDC transmission (Jungebluth and Kronabel). It envisioned the construction of solar farms in the Sahara Desert. The foundation was able to form a consortium made up of 50 corporate and private shareholders (Jungebluth and Kronabel). Unfortunately, there was little political will to implement this concept, mainly due to instability in the MENA region. As we cannot expect the conflicts in the region to be resolved in the near future, the EU x ACT Initiative would strive to implement a smaller-scale version of the DESERTEC concept. A European super-grid of HVDC lines would be constructed to allow for the cross-border transmission of power. Countries that produce more sustainable energy than needed can sell the excess to those countries whose production falls short of their consumption. This would (a) incentivize innovation, (b) smoothen the transition to a 100%-clean energy mix and (c) allow regions to specialize and focus on one or two sensible renewable energy options, guaranteeing maximum efficiency. Whereas this project would initially be restricted to the European continent, it could be expanded to incorporate MENA nations, depending on the political situation in the region. Expanding to North Africa would allow European energy companies to take advantage of the energy potential of the Sahara Desert.
Lastly, there is one more concern to address. How can a European-wide renewable energy project be made compatible with the recent shift towards more localized energy initiatives? Broadly said, one could adopt the strategy of the Paris Agreement and combine top-down supervision and ambition with bottom-up flexibility. To put this into practical terms: instead of Brussels distributing funds amongst the member states, EU members would be granted budget contribution breaks upon submitting concrete renewable energy infrastructure construction plans. National governments would then use this saved money to invest in national renewable energy infrastructure projects. This would allow national governments and local bodies to retain a certain degree of independence and flexibility. Decisions concerning which renewable sources to harness energy from or which energy companies to task with the construction of the renewable energy infrastructure would be made by national, state and local entities. Yet, guidelines and recommendations would be issued by the European Union.
The European HVDC super grid would serve to link these localized renewable energy initiatives; both nationally and continentally. A wind park off the German coast would be linked to Munich and to a solar farm in the Sierra Nevada. If, hypothetically, Germany’s wind turbines weren’t turning, excess electricity generated at a dam in northern Italy could be transmitted to German cities to bridge the supply-demand gap. This would minimize the risk of power outages and allow energy companies to profit from harnessing renewable energy, thereby incentivizing large-scale investment. Moreover, sizeable segments of this grid have already been constructed. Also, losses due to transmission and distribution aren’t as significant as one might think; they amount to roughly 2.6% at 800 kV over 800 km. It also worth noting that transmission infrastructure in Europe is lacking; this further complicates national renewable energy initiatives. Germany serves as a prime example for this. A continental HVDC super grid would not only provide trans-border but also intra-state connections, making the transition to a renewable-energy-dominant energy mix a more feasible option. Bottom line: a European-wide HVDC grid does not obstruct the development of and investment into localized renewable energy initiatives. The two projects complement, not exclude, each other.
Who will take these actions?
The initiative, as a whole, would be implemented by the institutions of the European Union, including but not limited to: the European Commission, European Parliament, the Council, the Committee on Industry, Research and Energy and the European Atomic Energy Community. EU-28 and European Economic Area governments would enforce the initiative on a national level, delegating tasks to state and local governments where necessary. Companies in the nuclear energy sector (e.g. AREVA, EON, RWE, EDF, Vattenfall, Endesa) would be involved by operating nuclear power plants, renovating them to ensure safety and eventually decommissioning them. European energy providers, corporate and private investors (drawn from the former DESERTEC Consortium) and large-scale construction companies would take part in the completion of the European super grid and in the enhancement of the renewable energy infrastructure. Nuclear scientists, environmental engineers, universities, think tanks and NGOs would be tasked with further developing alternative energies, nuclear fusion technology and LFTRs. International Atomic Energy Agency and International Energy Agency experts would stand in as consultants and objective inspectors. Over time, and only if the political situation allows for it, MENA governments could be included. Households would be involved in taking advantage of government subsidies and buying small wind turbines or solar roof panels.
Where will these actions be taken?
These actions would be executed in the EU-28 area. However, they could also be implemented in the broader European Economic Area, if the governments in question were to agree. Due to the EU legal framework, the strength of EU institutions, EU policies, and deep economic ties, the affairs of EU member states are irretrievably intertwined. Furthermore, by signing the Maastricht Treaty (or its amendments), EU members have devolved certain national powers to EU institutions, thereby giving up a certain degree of sovereignty. Hence, it is sensible to choose the EU area as the region to implement this project in. After all, this initiative requires interconnectedness, cooperation and top-down enforcement. As was mentioned before, if the political situation allows for it, MENA governments could be integrated. Also, if this project were to be successful, similar initiatives could be jump-started in other parts of the world (e.g. in the ASEAN or OAS area).
How much will emissions be reduced or sequestered vs. business as usual levels?
If the current EU policy is adhered to, emissions will be reduced by 40% below 1990 levels by 2050 (to 3,450 million tons of CO2 equivalent) (European Commission and Eurostat). Assuming that current EU policies pertaining to the other main GHG-emitting sectors (residential, industrial, transport and agricultural) are implemented, the EU x ACT Initiative would reduce emissions to 2,070 million tons of CO2 equivalent by 2040 (36% of 1990 emissions). By 2050, this figure would drop to 1,096 million tons of CO2 equivalent (20% of 1990 emissions).
Source:http://ec.europa.eu/clima/policies/strategies/2050/index_en.htm
*Note: The ambitious EU policy plan, regarding the other main GHG-emitting sectors, markedly contributes to this massive drop in emissions. The graph above visualizes future EU emissions in a low-carbon economy. Implementing the EU x ACT Initiative could get us there. It would shrink the power sector portion substantially.
What are other key benefits?
1. Limitations involved with a rapid transition to a 100%-clean energy mix are taken into consideration. We lack the technology, economic incentives and the political enforcement mechanisms to rely solely on renewable energy sources by 2025. This initiative allows for a smooth, well-planned transition. It simultaneously initiates an accelerated fossil fuel phase out.
2. This initiative incentivizes innovation and funds further research and development. We would be able to exploit any feasible and effective climate change mitigation option.
3. Due to the vast number of stakeholders involved, this initiative would enhance cross-national and cross-sectoral cooperation. We would also ensure that our fossil fuel and energy consumption problem is tackled from several angles.
4. The EU x ACT Initiative respects developmental and economic disparities within the European Union and within the European Economic Area.
5. Job creation.
What are the proposal’s costs?
The costs linked to the initiative are summarized in the table above. Substantial parts of pillars #3 and #4 could be covered using the nuclear fuel tax revenue. The remainder of the costs would be split amongst the EU (in the form of subsidies and incentives), the energy sector and the large-scale construction sector.
The cost of building additional nuclear power plants and of decommissioning nuclear power plants should also be taken into account. Due to these costs and the tax, it is likely that prices for end-consumers increase in the future. However, this increase is likely to be miniscule (the cost of generating electricity using nuclear fuel is much lower compared to solar fuel anyway).
It may seem as though this initiative is too costly; bridging solutions shouldn't be so expensive. Yet, the EU won't be spending €1.5-2.0 billion annually to subsidize the nuclear energy sector, but instead to fund renewable energy infrastructure and the HVDC grid. The development of safety mechanisms for NPPs and of a permanent nuclear waste storage site will be financed by the tax revenue and would have been a necessary investment even if it weren't for this initiative. The portion of the revenue that will be used to invest in the actual bridge technology and jumpstart nuclear programs in currently nuclear-free and willing EU states amount amounts to only 3%.
Another concern might be the cost at the level of the individual energy provider. Could the money that is being spent on harnessing nuclear energy be invested into renewable energies instead? The problem is that there is no guarantee these funds wouldn't be directed towards fossil fuels instead. To make sure these funds actually reach the renewable energy sector, incentives have to shift drastically. This can be achieved by providing subsidies. The overarching objective of this initiative is to provide the necessary funds.
Time line
Short-Term (5-15 Years)
2017: Contracts between nuclear energy companies and governments are extended until 2032/2036. Renovation of older nuclear power plants begins. Construction of safety barriers begins.
2018: Construction of the European super grid and renewable energy infrastructure commences.
Medium-Term/Long-Term (15-100 Years)
2032: Decommissioning process begins in countries, in which nuclear fission technology was used before the implementation of the EU x ACT Initiative.
2035: Construction of the necessary HVDC and renewable energy infrastructure in the MENA region commences.
2036: Decommissioning process begins in countries, which did not operate nuclear power plants before the implementation of the EU x ACT Initiative.
2037: Construction of the super grid and the necessary renewable energy infrastructure is completed.
2040: Decommissioning process is completed. Transition to a 100%-clean energy mix is completed.
2050: MENA region is integrated into the super grid.
*It cannot be predicted when the first commercial thorium or nuclear fusion reactor becomes operational.
Related proposals
Not applicable.
References
References
"Economics of Nuclear Power." Nuclear Energy Agency Press Room. OECD Nuclear Energy Agency, 08 June 2014. Web. 13 Apr. 2016.
"EU Energy, Transport and GHG Emissions: Trends to 2050." Trends to 2050: Reference Scenario 2013. European Commission Publishing Office, 16 Dec. 2013. Web. 12 Apr. 2016.
European Commission. "2050 Low-Carbon Economy." European Union Climate Action. European Commission Publishing Office. Web. 12 Apr. 2016.
European Nuclear Society. "Nuclear Power Plants in Operation." Nuclear Power Plants in Europe. Web. 13 Apr. 2016.
Eurostat. "EU Greenhouse Gas Emission Statistics." Eurostat - Statistics Explained. European Commission Publishing Office, 15 Dec. 2015. Web. 12 Apr. 2016.
Institute for Energy Research. "Salazar Applauds But Solar Project Output Will Be a Fraction of Its Competitors - IER." IER Latest Analysis. IER Publishing Office, 22 June 2011. Web. 13 Apr. 2016.
International Energy Agency. "2015 Key World Energy Statistics." IEA Publications. International Energy Agency Head of Communication and Information Office, 2015. Web. 11 Apr. 2016.
Jungebluth, Sabine and Kronabel, Christoph. Der DESERTEC-Atlas: Ein Weltatlas Zu Den Erneuerbaren Energien. Leipzig: CEP Europäische Verl.-Anstalt, 2011. Print.
REN 21 Steering Committee. "Renewables 2015 Global Status Report." REN 21 Publications. REN 21 Renewable Energy Policy Network for the 21st Century, 2015. Web. 11 Apr. 2016.
Sorenson, Kirk. "Thorium: An Alternative Nuclear Fuel." TED X NYC, Apr. 2011. Web. 12 Apr. 2016.
Volker, Quaschning. "Specific Carbon Dioxide Emissions of Various Fuels." Erneurbare Energien Und Klimaschutz. Web. 12 Apr. 2016.
World Nuclear Association. "Nuclear Power in Germany." Country Profiles: Nuclear Power in Germany. World Nuclear Association Publications, 26 Mar. 2016. Web. 11 Apr. 2016.
Notes
1: The annual budget of the EU is €145 billion. Hence, €1.5-2.0 billion shouldn't represent too much of an issue.
2: The cost of decommissioning a NPP is around €110-130 million per reactor.
3: If nuclear fusion technology is ready for commercialization before the transition from nuclear to renewable energy is completed, fission power plants could be re-functioned to accommodate fusion. This, however, depends on the level of technological feasibility and on public opinion and political will.
4: Research into renewable energies would include an assessment of which renewable energy source is most suitable to which region in Europe.
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