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Government partnership is needed if Dutch pension fund PME is to make “risky” nuclear investment.

Dutch pension fund PME keen for nuclear power investments

European Pensions , By Natalie Tuck, 30/07/24

The Dutch pension fund PME is keen to invest in nuclear investment but this must be in partnership with the Dutch government, due to it being such a “risky investment”.

The pension fund, for those working in the tech and metal industry, has published a position paper on investing in nuclear energy in the wake of the publication of the Dutch National Energy System Plan, which looks to scale up the use of nuclear energy in the Netherlands………………………….

Making the case for nuclear energy, PME said the “manageable disadvantage” of radioactive waste and the high level of safety of nuclear power plants weigh into PME’s positive view of nuclear energy as a stable addition to the energy mix……………

When it comes to financing, PME said the “high cost of construction and the long duration of construction make nuclear power plants a very risky investment”.

The paper continued: “Financing nuclear power plants requires a leading role of the state, which will have to assume a significant part of the risk in all phases of the nuclear power plant’s life. Security of return is a basic requirement for PME so that funding also contributes to participants’ pension accrual and pensioners.

“The construction of nuclear power plants takes a very long time and is very costly. It is precisely for these reasons that risk-return requirements are paramount in any financing of nuclear power.”

It therefore advocates for the use of a Regulated Asset Base (RAB) model to finance the construction of nuclear power plants. In this model, private parties bear the investment, and receive a fixed ‘fair return’ (the RAB fee) from the start of construction.In the RAB model, at each stage, the primary risk is shared between the state and the financing market party or parties.

……………………….“In addition to the quantitative participant survey, PME holds focus groups with participants, retirees and employers. PME also organises retiree meetings where the topic of nuclear energy was discussed recently. The basic attitude toward nuclear energy is almost always positive among the majority of constituents. However, there are concerns about the yield, the risks, the safety of nuclear power plants and the problem of radioactive waste,” PME stated.  https://www.europeanpensions.net/ep/Dutch-pension-fund-PME-keen-for-nuclear-power-investments.php

August 1, 2024 - Posted by | business and costs, EUROPE

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