nuclear-news

Nuclear is the new green. (Really?)

Funds-Europe, 1 Sept 23, Piyasi Mitra examines the debate around the role of nuclear energy in Europe’s sustainable future.

The global pursuit of a net-zero future is fraught with challenges and choices. Integrating natural gas and nuclear into sustainable portfolios could potentially speed up the process, but the European Commission’s recent classification of these resources as climate-friendly prompted scrutiny and debate. Alarmed by the emissions and potential risks, organisations such as Greenpeace, Client Earth and WWF launched legal actions. So, is nuclear the key to a sustainable energy future?

Serious business

The position of the European Commission (EC) is this: “The taxonomy is an essential part of the EU sustainable finance framework in the broader context of the European Green Deal. It helps guide and mobilise private investment to transition towards climate neutrality.”

………………. The EC also announced its intention “to adopt a complementary Climate Taxonomy Delegated Act for some energy sectors, notably nuclear and gas, where they can comply with the criteria for activities under the taxonomy regulation”

Opinions on the topic vary widely. A spokesperson for the German investment funds association, the BVI, says: “It would have been better not to include nuclear energy and gas in the taxonomy because they are contentious and jeopardise the credibility of the taxonomy as a universal measure of sustainability.”…………………………………………………………………………………………………………..

Challenges galore

All nuclear technologies share the same problem: cost. According to the International Energy Agency, about 25% of existing nuclear capacity in advanced economies is expected to shut down by 2025. On average, the nuclear fleet in developed economies – particularly in the US and the EU – is 35 years old, with most of these fleets nearing the end of their designed lifetimes, says Anthony Catachanas, CEO of Victory Hill Capital Partners. “The requirement for dealing with nuclear waste and decommissioning costs make it a less attractive investment proposition than other more sustainable energy sources.”

………………………………… A more practical technology is fusion. Nonetheless, the costs still need to be lowered as it will use the very expensive hydrogen molecule as feedstock, and the technology still needs to be proven.

………………… The costs associated with reactors, whether large or small scale, utilising fission technology are significantly prohibitive. “Besides, fission has a costly by-product in nuclear waste from an enriched uranium or plutonium process. Investing in this technology will be more difficult to explain to investors because the waste issue is unsustainable,” says Catachanas.

……………………………………………….environmental concerns about nuclear waste disposal and its impact on human health and biodiversity are real, and broader safety implications exist for people working and living near nuclear power plants.

……………………..Another drawback of nuclear power is that state or state-owned utilities are likely to remain the only suitable ownership models, says Joost Bergsma, CEO of infrastructure equity firm Glennmont Partners from Nuveen. He adds: “Nuclear does not immediately contain to solving Europe’s energy security issue, as the raw materials needed for nuclear energy generation often come from non-EU countries, and often countries with very different geopolitical agendas to ours.”

Renewables are a far more attractive option for fund managers, as they are cheaper than nuclear and fossil fuels and quick to build, says Bergsma. “Traditional renewables such as onshore and offshore wind and solar have proven reliability and are only growing more efficient. Beyond this, renewables hold the edge regarding public support and easy deployability.”……………  https://www.funds-europe.com/insights/nuclear-is-the-new-green—

September 3, 2023 - Posted by Christina Macpherson | business and costs, EUROPE