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Romania's nuclear bridge to the 2030s

2014-10-04 12:22:47 - From the Print Edition

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European agenda

On May 28, 2014, the European Commission published its recommendations for the establishment of a European Energy Security Strategy. The core of the proposed strategy strongly highlights the need to increase its indigenous energy production based on a technology level-playing field, reduce its dependence upon external suppliers, and encourage diversity in the energy mix in order to meet its energy needs.

The fact is that 53 per cent of all its energy comes from imports, from which 88 per cent is oil, 66 per cent gas, 42 per cent coal. The risk for security of supply is, therefore, exponential and the costs are huge: more than one billion Euro per day.

The way Europe adopts its strategies coupled with the related actions of its member states will define European energy security and efficiency in the long term. Europe′s economy and the well-being of its citizens depend heavily on these capabilities to ensure the much-needed security of supply, low-carbon economies and energy independence. Energy security and low-carbon technologies development follow the same path of providing solutions, for some states entirely, for others partially.

These have long been on the European Commission agenda, however the recent crisis in Ukraine coupled with affordability challenges associated to the prior adoption of a one-size-fits-all solution in terms of renewables have brought the complexity of these concerns to a whole new level. Hence, the current European debate on the heterogeneity of state-related policies and price increase.

The Nuclear drivers

It is worth emphasizing that states have the prerogative to address their energy challenges and adopt those economic and financial choices that best adapt to their internal situation. The instruments chosen are also entirely their choice.

Nuclear energy comes with a series of strong advantages. Estimates say that global population growth in combination with industrial development will lead to increasing energy consumption by 2030. Unless Romania takes no step in this direction, which is highly unlikely, than Romania does not need nuclear.

Europe is keen to reduce fossil fuel and replace them with low-emission sources of energy, which makes sense in the 2030s estimated energy context. However, the cold hard fact is that only readily-available large-scale sources that deliver continuous and stable electricity can effectively impact positive climate change.

If Europe has learned a lesson lately, it would be called security of supply. Vulnerability to interrupted delivery shifts attention to natural resources like uranium, which are abundant and affordable. It is mainly the availability and affordability of nuclear fuel and the increasing fossil fuel prices which make nuclear the most cost-effective of all base-load available sources.

So, what does Romania have to say?

Romania is one of the very few states that have a low dependency on import sources compared to other European member states that are heavily dependent, 6 of which on a single source.
Romania is again one of the few states that can eliminate its dependency percentage based entirely on its internal resources and simultaneously meet decarbonization targets. Romania is perfectly able to boost technology neutrality as the solution to meet both energy security and decarbonization targets.

Doubling the nuclear capacity is a wise long-term investment that leads to a balanced choice in which source diversity and technology neutrality play a significant role. The further development of nuclear industry in Romania ensures reliability, affordability and decarbonization. Romania is one of the few countries in the world that has developed a complete fuel cycle. While Europe is 95 per cent dependent on nuclear fuel imports, Romania is 100 per cent self-reliable. Nuclear is key to environmental concerns and it has a hedging effect on other sources′ price increase.

This is all the more reason to struggle for a balanced energy mix, to create a level playing field in terms of a real competitive market: Europe has witnessed the downturns of applying cascading measures over the years and today affordability and its consequences are a major issue.

The 3&4 Cernavoda NPP Units Project

Given this context and Romania's energy strategy for medium and long-term, the development of nuclear energy through the completion of the Cernavoda Units 3 and 4 Project is envisioned as an important part of the country choice of an efficient energy mix capable to meet the objectives of the strategy: energy efficiency, diversity and security of supply, affordability and environment protection.
"If we are willing to make low-carbon sources, especially nuclear, a part of a balanced energy mix, we are forced to identify means to facilitate investment in nuclear energy generation capacities.

Market failures cannot be addressed on a standalone basis, one at a time. The only viable solution is investment. For Romania, investment in low-carbon technology, nuclear, is investment in security of supply for the long-term.

Today, most European states face a lot of energy challenges and less viable solutions. Romania faces less challenges, and has more solutions and more resources. We have two choices: we either make the most of what we have and ensure long time energy security and independence in an affordable manner for the consumer, or we hinder long-term development through long term investments because current data is not an accurate reflection of ten to 15 years from now," says Daniela Lulache, CEO, Nuclearelectrica.

The objective of the energy sector in Romania, to ensure the security of electricity supply and heat supply to all customers at appropriate quality level, needs to be achieved at the lowest cost for the consumers, therefore increasing the energy capacity of the Cernavoda nuclear power plant with two new units developed on the CANDU technology, is considered the optimum solution for covering the deficit that will occur after 2020, both from a technical and economic perspective and timeline for completion, but also in terms of internal resources and existing national infrastructure developed on the basis of the CANDU technology, highlights the new strategy for the continuation of the 3&4 Units Project.

"The 3&4 Units Project has entered a new development phase after years of inaction. We have a well-planned governmental strategy to continue the Project and a timeline that is respected," says Nuclearelectrica CEO.

As the only Romanian nuclear energy producer, Nuclearelectrica, based on the relevant operation expertise and beneficial social impact thus far, is eager to develop the aforementioned nuclear project: "As a reliable producer, we are also keen to couple security of supply with affordability and, therefore aim - together with other market participants-at correcting, through both Grid and end consumer beneficial major investment projects, certain market failures," adds Lulache.
Nuclear power is cost-competitive with other forms of electricity generation. Fuel costs for nuclear plants are a reduced part of total generating costs, though capital costs are greater than those for coal-fired plants and much greater than those for gas-fired plants.

Nuclear power plants are expensive to build but relatively cheap to run, they are capital cost intensive, but profit effective. In assessing the economics of nuclear power, decommissioning and waste disposal costs are fully taken into account. If the social, health and environmental costs of fossil fuels are also taken into account, the economics of nuclear power are quite outstanding.

The availability and use of nuclear reduce demand pressure on the displaced fuels and lead to their future prices being lower than they would otherwise be. There are studies that conclude the effect on fossil fuel prices of nuclear power contribution to energy supplies. Such studies have assessed the cost implications of suspending nuclear power production globally, immediately or over a ten-year period. In either scenario, oil and coal prices would rise consequently resulting in a decline of GDP. The effect would differ from state to state depending on the level of imported fuels.

"With a lack of nuclear power within the energy mix, there is no optimistic price scenario. Costs have increased in the recent years for all types of electricity generation sources, and even if capital costs are higher for nuclear, they are compensated by reduced fuel costs and integration of other costs. If we add the long operation life of nuclear power plants at high capacity factors, than nuclear has a clear competitive advantage over other electricity generation sources. This is only in terms of economics, however CO2 emissions reduction targets and environmental concerns place nuclear even higher in effective energy mix choices," says Nuclearelectrica GM Lulache.

So, nuclear comes with clear quantifiable advantages for both the economy and energy system on one hand, and for the end consumers on the other hand. Nuclear might just be Romanian energy lucky charm. "In terms of nuclear energy industry, we have it all. Romania is 100 per cent self-reliant," says Daniela Lulache.

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