nukes in Poland ?

["Jaro" <jaro-10kbq@sympatico.ca>]

Expanded EU seen as source for LWR investment

NUCLEONICS WEEK JUNE 3, 2004



The enlargement of the European Union (EU) from 15 to 25 members

May 1 opened the prospect that a significant share of a forecast 300,000

megawatts in replacement and new power generation needed during the

coming 15 years will be nuclear, a senior executive at RWE Power AG told the

German Atomic Forum (DAF) last week.

Some officials attending the 2004 DAF annual conference in Dusseldorf

said that they anticipated that RWE, and perhaps Vattenfall Europe, may in

the next 15 years build a nuclear power project in Poland, given strategic

considerations

in an analysis presented to the DAF by Gerd Jaeger, a member of the RWE

management board.

RWE is one of several utilities mulling an invitation by Electricite de

France (EDF) to invest in an EPR advanced PWR in France. Last week,

officials said that German utilities thus far have not agreed to the idea,

chiefly

on economic grounds (NW, 27 May, 1).

Some observers at the DAF conference said they expected

RWE would be more interested in investments in Poland

and other new EU states. .I see RWE making acquisitions,

forming local partnerships, and then, in a few years, going

in with them on a nuclear investment there,. one German executive said.

Others predicted that Vattenfall might likewise look

toward the Baltic region to make a future nuclear investment,

provided that politics in Sweden in a few years. time

allow the state-owned utility to take such a step.

Jaeger asserted that, political acceptance issues aside, the

prospect that power reactors will be built in new eastern EU states is real.

In both economic growth and power demand, Jaeger

pointed out, the 10 states that joined the EU on May 1 (EU-

10) have a lot of catching up to do with the established

Europe of 15 states (EU-15). Per capita gross domestic product

(GDP) in the EU-15 is now (U.S.)$26,000, compared to

$8,700 in the EU-10. While annual per capita power

demand in the EU-15 is currently about 6,500 kilowatthours,

in the EU-10 demand level is just over half over that, at 3,600 KWH/y.

A 75% increase in power demand in the EU-10, to a level

equivalent with that in the EU-15, could occur with anticipated

economic growth over the next 20 years, Jaeger said.

If that happens, he said, this would mean an increase in

overall EU power demand of about 12% by 2025, an addition

of about 250 terawatt-hours (TWH) .or the equivalent

of about 20 1,600-MW EPR units..

Compared to the EU-15, where nuclear covers about a

third of power demand, the supply structure of the EU-10

.is similar but somewhat more focused on fossil fuels,.

Jaeger said, since nuclear covers 23% of requirements and

bituminous coal, gas, and lignite about 60%.



Deceptive overcapacity



According to the Union for the Coordination of

Transmission of Electricity (UCTE), in the EU-25 there is an

overcapacity potential in the grid to supply about 60

gigawatts (GW) in the short term, irrespective of economic

or political constraints. However, Jaeger pointed out, in practical

terms .there will be limits. on the amount of power

which can be exported and imported to and from eastern

EU members. In Poland, for example, .the overcapacity estimated

by UCTE is bigger than the capability of the grid to export power..

Moreover, Jaeger suggested that overcapacities in the

post-enlargement power grid will evaporate with time

because a huge amount of current infrastructure must be replaced.

RWE projects that, of 650,000 MW of installed capacity

in the EU, by 2025 about 200,000 MW will have to be

replaced, if all assets are retired after 40-year lifetimes.

Assuming that economic growth will prompt more power

demand, additional capacity of about 100,000 MW may be

required, he said. According to a vendor official in

Dusseldorf last week, the expected economic growth path of

EU-10 states and a few others, such as Spain, will require

substantial investment in baseload generation capacity .and

a lot of this could be nuclear..

Significant for nuclear.s future EU prospects, Jaeger said,

are the future EU politics of emissions management, given

that all EU-10 members agreed to EU emissions guidelines

which will force them in years ahead to adjust their power

production infrastructure. While all EU-10 states have negotiated

with Brussels an adjustment period to meet EU levels,

the last of those adjustments, for Poland, runs out in 2017,

while for Slovakia, the Czech Republic, and Hungary, the

grace periods will expire between 2005 and 2008.

.The pressure on (EU-10) fossil plants over emissions

rules will intensify,. Jaeger predicted. UCTE.s assertion that

today Poland has an overcapacity of about 8 GW .should be

seen in this light,. he advised.

Despite optimistic projections for the future of renewables

in new EU states.Poland, for example, has called for

renewables. share in power generation to increase from 2.8%

currently to 7.5% in 2010, and the Czech Republic aims to

increase renewables. share to 8% in the same period.these

efforts will be driven by .massive subsidies,. Jaeger said, and

.for that reason (renewables) won.t be a major contributor.

to EU-10.s power production .in the foreseeable future..

While over time emissions rules will impact on EU-10

states. fuel choices, initially emissions trading will not be a

factor for most new members, since they all suffered severe

economic implosion when the Communist system collapsed

in the beginning of the 1990s. Over time, however, RWE

predicts, emissions trading will emerge as a factor in policy

decisions over fuels in the EU-10, because despite the 1990s.

crash that shut many aging and polluting facilities, per capita

production of carbon dioxide in the EU-10 is still .considerably higher.

than in the EU-15.

.Over the long term this is going to put more pressure.

on the EU-10 to consider nuclear as a carbon-free resource,

Jaeger asserted, especially given that under agreements made

by Lithuania and Slovakia, by 2009, 3,500 MW of nuclear capacity will be

retired.

Jaeger singled out Poland as a potential nuclear investment prospect.

Poland.s reliance on domestic coal.about 100-million

tons a year.is expected by RWE to decline, Jaeger said.

While lignite, now supplying 35% of power, will remain a

strategic fuel and some imported coal may supplant falling

domestic output in the future, .the economic prospects for

nuclear power in Poland are highly interesting,. since it

could serve as a competitive baseload power source. .And the

size of the market..Poland.s power demand is the largest in

EU-10 and twice that of the next largest member, the Czech

Republic..offers sufficient potential for the necessary infrastructure

and power sales,. the RWE executive said.

Poland.s big market and its current fuels mix are .a

superb basis. for a future nuclear power program, he said.

But Poland is not alone as a potential nuclear investment

target. Plans are being made by the Czech Republic to

expand its nuclear plant portfolio .in view of dropping coal

production and expected increases in demand.. Lithuania

has likewise considered replacing the two reactors at

Ignalina with new units, but Jaeger said it was questionable

whether Lithuania.s total power demand of 10 TWH/y for a

population of 3.5-million would economically justify a new nuclear

investment.

As in EU-15 states, Jaeger cautioned, the EU-10 cannot go

forward in expanding nuclear generating capacity unless its

leaders will take the political risk. He pointed out that, in

2002, 47% of 16,000 polled citizens in EU-15 states asserted

in one opinion survey that nuclear reactors were responsible

for greenhouse gas emissions and climate change. Nuclear

energy .has a long way to go. before it has solved its image

problems in Europe, Jaeger said..Mark Hibbs, Dusseldorf













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