March 2022

Accuracy Talks Straight #4 – One Partner, One View

A new golden age of nuclear power!

René Pigot
Partner, Accuracy

After being weakened by various events and decisions that shed an unfavourable light on it (Fukushima, Flamanville, Fessenheim), the nuclear industry is now enjoying something of a resurgence.

The French president’s recent announcement of a programme to build six EPR2 reactors shows his choice to maintain a base of decarbonised electricity production using nuclear energy.

Though it is a subject of much debate, this decision is born of cold pragmatism: despite their demonstrated large-scale deployment, renewable energies remain subject to the whims of the weather. Alone they will not be able to substitute dispatchable power generation facilities, when considering the ambition behind commitments to reduce greenhouse gas emissions by 2050.

Faced with the electrification of the economy, the decision to maintain nuclear power in the French energy mix alongside renewable energies is not so much an option as a necessity. The guarantor of balance in the French network, RTE, also recognises this: prospective scenarios with no renewal of the nuclear base depend, in terms of supply security, on significant technological and societal advances – a high-stakes gamble to say the least. Beyond these aspects, nuclear power also constitutes an obvious vector of energy independence for Europeans. Current affairs cruelly remind us of this, and the situation could almost have led to a change in the German position, if we look at the latest declarations of their government.

In France, initial estimations put construction costs at €52bn, but financing mechanisms are yet to be defined. The only certainty is that state backing will be essential to guarantee a competitive final price of electricity, given the scale of the investments and the risks weighing on the project. Ultimately, the financial engineering for the project will need to be imaginative in order to align the interests of the state, EDF and the consumers.

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