Roughly 50 companies all over the world were questioned about their attitude towards nuclear power as part of these engagement activities:
What role will nuclear power play in your energy mix in the medium to long term? Do you see nuclear power as a technology of the future, or will you increasingly be replacing it with other forms of energy? If the latter, what do you think are the best alternatives in economic and environmental terms?
“Nuclear power, no thanks!”, or is it actually a sustainable energy source after all? It is not only in society that many different views are being voiced – the producers of nuclear power are also following some very different paths in their strategic management decisions. The energy crisis has prompted a significant number of companies to speak out in favour of abandoning or even boycotting the planned phase-out of nuclear power in Germany. The German government is sticking to its plan, however, partly because its nuclear power producers began planning the phase-out implemented by 2022 as long ago as 2008.
Energie Baden-Württemberg (EnBW) says that it has responded swiftly to the decision with a comprehensive decommissioning strategy, which is being pursued rigorously by its subsidiary EnBW Kernkraft. The fraught situation on the energy market and a further revision to Germany’s Atomic Energy Act means that EnBW is able to operate its remaining three nuclear power plants until 15 April 2023.
However, it is not allowed to use any new nuclear fuel rods. EnBW will thus stop generating nuclear power in mid-April 2023. To achieve energy neutrality by 2035, the company will replace its existing coal-fired power stations with gas-fired ones, invest more in hydrogen-based solutions, and generate up to half of its energy from renewable sources by 2025. It will double its wind farm output to 4 GW by 2025 and is also planning strong growth for its solar power.
The world’s biggest nuclear producers are following a different strategy, however. Representing 78% of its revenues, nuclear power is the main source of business for Électricité de France (EDF). EDF sees expanding renewables as a way of offsetting coal-fired power and is planning to achieve a net capacity of 60 GW by 2030.
While difficulties with final storage and safety risks are powerful arguments against nuclear power, it is also a very expensive technology in relative terms from an economic perspective. Thus, the Spanish energy utility Iberdrola is planning to exit the nuclear power market from 2027 and sell its stakes in nuclear facilities. Compared with renewables, nuclear power is a cost-intensive business for Iberdrola, so the company is splitting its new investments 50/50 between renewable energy and grid stability.
One of the main reasons why nuclear facilities are currently being kept going is because a contract is still in place with the Spanish government that is designed to ensure security of supply for the country. Nuclear power is not a viable long-term option for Iberdrola from a purely economic point of view.
What is your strategy for the final storage of radioactive waste? How are you guaranteeing minimal harm to people and the environment for future generations?
The final storage of radioactive waste is one of the main challenges posed by this energy source. A safe, long-term solution has to be found in order to protect future generations against potential hazards. A comprehensive final storage strategy should encompass an in-depth risk analysis, a careful selection of sites, and adequate monitoring systems in order to guarantee that radioactive waste is stored responsibly. Despite significant investment and research, the final storage of nuclear waste remains a contentious issue, because it takes 100,000 years for radioactive waste to stop posing a danger to people and the environment. This is why repositories are required that will withstand all possible natural disasters in the future.
The Dow Jones-listed Southern Company is opting for dry cask storage as a short-term solution. These facilities can store spent fuel elements for the entire lifetime of the individual power plants. When it comes to long-term storage, Southern Company believes that responsibility lies with the US Department of Energy (DOE). However, the department has yet to come up with a solution for the appropriate final storage of the radioactive material.
Another US company, Entergy, is facing similar challenges. It too is reliant on dry cask storage on facility premises, because the fuel ponds have reached capacity at all four of its nuclear power plants. Entergy likewise holds the DOE responsible. For instance, the government authorities have not approved the construction of a repository in the Yucca Mountains.
What do you think about the decision to add nuclear power to the sustainable category in the EU Taxonomy?
In January 2022, the EU decided to add nuclear power to its list of investments classified as sustainable under the Taxonomy. The consensus in Austria is that the negative consequences of nuclear power significantly outweigh the benefit of low carbon emissions.
Spain’s Endesa is critical of the EU Taxonomy. The regulation excludes nuclear power generation at existing facilities that have not requested a lifetime extension, but this applies to the vast majority of current nuclear plants. This renders these nuclear power plants ineligible for support, much to Endesa’s regret.
The nuclear power plant in Zaporizhzhia has regularly been in the news in the context of the Ukraine conflict. How do you guarantee grid stability and the safety of nuclear power plants in general in the face of adverse impacts such as natural disasters or war?
Nuclear power plants are controversial due to their ever-present safety risks. The danger posed by facilities is a subject of continual debate and requires energy producers to ensure a modern risk management system and cost-intensive safety standards. Over the past year, the Zaporizhzhia nuclear power plant in particular has raised the question of whether nuclear power plants and safety are even compatible. What is more, natural disasters are increasingly testing the limits of facilities’ safety precautions.
The Temelín nuclear power plant lies only 50 km from the Austrian border, so the safety standards at this facility are also extremely relevant to Austria. The Czech Republic’s largest electricity producer, CEZ, operates the plant and is thus responsible for its safety. CEZ’s nuclear power plants have undergone various stress tests designed to simulate the impact of extreme natural events, amongst other things. Additional specific requirements for increasing nuclear power plant safety further have been identified based on the experience gained and lessons learned from the Fukushima disaster. CEZ is working tirelessly to improve its safety standards, which have to keep pace with the technological advances being made in this field.
Herbert Perus
Fund Management – Corporate Responsibility at Raiffeisen KAG
Mathias Zwiefelhofer
Corporate Responsibility at Raiffeisen KAG