March 28, 2024

Report Casts Doubt on Britain’s Nuclear Electricity Strategy

LONDON — Britain’s plans to build a fleet of nuclear power plants by 2025 are “ambitious” at best and “unrealistic” at worst, according to a report to be released Monday by a committee of the House of Commons.

“It is worrying that the government does not have any contingency plans in place for the event that little or no nuclear is forthcoming,” the Energy and Climate Change Committee wrote in its report.

Replacing the country’s aging network of nuclear power stations is a major component of the government’s strategy to lower 1990 levels of greenhouse gas emissions by 80 percent by 2050. While nuclear power has disadvantages, particularly the production of radioactive waste, it emits virtually no greenhouse gases.

The French utility EDF and the British government are negotiating the terms for developing new nuclear plants. EDF has proposed constructing two plants at Hinkley Point on the Severn Estuary in southwest England, where the company operates two nuclear stations built in the 1970s. The new plants would be the first for Britain since 1995.

But cost estimates for the project have soared. Analysts say that in order for the project to be viable, EDF needs the government to guarantee it will buy electricity from the plants at prices substantially higher than the current market rates.

Nuclear power now supplies about 20 percent of the electricity in Britain. The government is promoting conservation and the development of renewable sources of energy, but without new nuclear plants, Britain will struggle to meet demand for electricity and reduce carbon dioxide emissions.

Last year the German utilities RWE and E.On dropped out of contention for contracts to build the nuclear plants. A consortium led by Hitachi of Japan bought the Germans’ franchise, called Horizon, but it is years from being able to begin construction. That has left EDF as the government’s only realistic option for the foreseeable future.

For EDF, Britain provides an opportunity to demonstrate the viability of its next-generation European pressurized water reactors, known as EPRs. The first two EPR power plants, at Flamanville in France and Olkiluoto in Finland, have been plagued by huge cost overruns and technical problems. If EDF cannot make the next-generation reactors an attractive option for clients, it faces a gradual decline in its core businesses, said Harold Hutchinson, an analyst at Investec in London.

Britain wants to build around 10 new plants. Construction costs have soared to €8 billion, or $10.4 billion, for the EPR plant that EDF is building at Flamanville. The committee report estimates that the first British EPR will cost £7 billion, or $10.5 billion.

In a report last year, Citigroup estimated that if it cost EDF £7 billion to build a plant, in order to realize a 10 percent return, the utility would need to sell electricity at about £110 per megawatt hour range — roughly double today’s wholesale prices.

EDF Energy, the British arm of the company, will not disclose the electricity price it is seeking.

“When the contract agreeing a price for the electricity is published, it will show in a transparent way that new nuclear is competitive with all other forms of low-carbon energy, and good value for consumers,” it said in response to the committee report.

Providing EDF with substantial, long-term price guarantees would not only present a political challenge for the British government, it might also contravene European Union rules on state support for industry.

“I am not sure that if the U.K. had been told that this is what it would cost, it would not have gone down a different road,” said Antony Froggatt, a nuclear analyst at Chatham House, a study group based in London.

Last month the British utility Centrica, which has a 20 percent stake in EDF’s existing nuclear power plants in Britain, dropped out of EDF’s plans to build new nuclear stations and took a write-off of roughly £200 million.

Tim Yeo, the Conservative who is chairman of the House of Commons committee, said during an interview that he was concerned that EDF might walk away from the project within weeks. If that happens, development of new nuclear power plants “may not start in five years,” he said.

Article source: http://www.nytimes.com/2013/03/04/business/global/report-casts-doubt-on-britains-nuclear-electricity-strategy.html?partner=rss&emc=rss

Green: High Energy Costs Plaguing Europe

Asked whether he had considered building the plant in Europe, Voestalpine’s chief executive, Wolfgang Eder, said that that “calculation does not make sense from the very beginning.” Gas in Europe is much more expensive, he said.

High energy costs are emerging as an issue in Europe that is prompting debate, including questioning of the Continent’s clean energy initiatives. Over the past few years, Europe has spent tens of billions of euros in an effort to reduce carbon dioxide emissions. The bulk of the spending has gone into low-carbon energy sources like wind and solar power that have needed special tariffs or other subsidies to be commercially viable.

“We embarked on a big transition to a low-carbon economy without taking into account the cost and without factoring in the competitive impact,” says Fabien Roques, head of European power and carbon at the energy consulting firm IHS CERA in Paris. “I think there will be a critical review of some of these policies in the next few years.”

Both consumers and the industry are upset about high energy costs. Energy-intensive industries like chemicals and steel are, if not closing European plants outright, looking toward places like the United States that have lower energy costs as they pursue new investments.

BASF, the German chemical giant, has been outspoken about the consequences of energy costs for competitiveness and is building a new plant in Louisiana.

“We Europeans are currently paying up to four or five times more for natural gas than the Americans,” Harald Schwager, a member of the executive board at BASF, said last month. “Energy efficiency alone will not allow us to compensate for this. Of course, that means increased competition for all the European manufacturing sites.”

The expansion in renewables will probably ensure that Europe will meet its target of reducing greenhouse gases 20 percent from their 1990 levels by 2020. But it has been a disappointment on other levels.

For one thing, emissions continue to rise globally. In a sense, Europe is likely to have exported its emissions to places like China, where polluting economic activity continues to increase while the European economy stagnates.

A striking indicator that the European effort has not achieved all that it intended to is the continued rise in the burning of coal, by far the biggest polluter among fossil fuels.

The International Energy Agency, a Paris-based group formed by consumer nations, recently said that coal was likely to catch up with oil as the world’s largest source of energy in a decade.

Much of the increase in coal use can be blamed on China and India, but not all of it. Europe has increased its coal use this year, and that has led to an increase of about 7 percent in carbon dioxide emissions from power generation, according to IHS. Coal use is increasing in all regions except the United States, the I.E.A. said.

Current European energy policies were mostly shaped when the European economy was booming. In the grim economic climate of today, spending big money on renewables can seem like a luxury. Spain — once a strong supporter of renewables — has sharply cut funding.

The British government, another big backer of clean energy, recently struck a compromise. It promised to soak consumers for billions of pounds of subsidies for renewables like wind power and even new nuclear power plants, but it also gave a cautious green light to shale gas drilling in hopes of finding a cheaper source of natural gas.

A British consumer advocacy group called Which? recently pegged the costs to British consumers of decarbonization and new energy infrastructure at more than £100 billion, or $161 billion, and said that “persistently rising energy prices” were putting “intense financial pressures” on the public. In Germany, renewables subsidies are already adding 10 percent to 15 percent to bills, according to IHS.

Europeans cannot help noticing that the United States has managed, through the shale gas boom, not only to slash natural gas prices but also to cut carbon dioxide emissions to a 20-year low as utilities have shifted from coal to natural gas, which produces much less carbon dioxide.

What can Europe do? If it wants to make a bigger dent in carbon emissions, it needs a serious carbon price — not the current €7, or $9, per metric ton — that has little effect on business decisions. It might also consider a tax on carbon consumption to make sure it is not achieving its goals through deindustrialization. But such measures might make Europe even less competitive unless they are adopted globally.

Dieter Helm, a professor of energy policy at the University of Oxford, thinks that Europe could get a much bigger bang for its euro by putting some of the funding going into uncompetitive existing technologies into basic energy research that might produce much better clean technologies in the future.

Mr. Helm argues that big gains in the reduction of emissions could be achieved in the short term by replacing coal with natural gas — as the United States is doing. Europe may have enormous quantities of shale gas. There has not been enough exploration yet to know. Yet, several countries, including France, seem bent on killing the industry in its infancy. As with so many things in Europe, less ideology and more pragmatism are needed.

Article source: http://www.nytimes.com/2012/12/27/business/energy-environment/27iht-green27.html?partner=rss&emc=rss

Across Europe, Irking Drivers Is Urban Policy

Cities including Vienna to Munich and Copenhagen have closed vast swaths of streets to car traffic. Barcelona and Paris have had car lanes eroded by popular bike-sharing programs. Drivers in London and Stockholm pay hefty congestion charges just for entering the heart of the city. And over the past two years, dozens of German cities have joined a national network of “environmental zones” where only cars with low carbon dioxide emissions may enter.

Likeminded cities welcome new shopping malls and apartment buildings but severely restrict the allowable number of parking spaces. On-street parking is vanishing. In recent years, even former car capitals like Munich have evolved into “walkers’ paradises,” said Lee Schipper, a senior research engineer at Stanford University who specializes in sustainable transportation.

“In the United States, there has been much more of a tendency to adapt cities to accommodate driving,” said Peder Jensen, head of the Energy and Transport Group at the European Environment Agency. “Here there has been more movement to make cities more livable for people, to get cities relatively free of cars.”

To that end, the municipal Traffic Planning Department here in Zurich has been working overtime in recent years to torment drivers. Closely spaced red lights have been added on roads into town, causing delays and angst for commuters. Pedestrian underpasses that once allowed traffic to flow freely across major intersections have been removed. Operators in the city’s ever expanding tram system can turn traffic lights in their favor as they approach, forcing cars to halt.

Around Löwenplatz, one of Zurich’s busiest squares, cars are now banned on many blocks. Where permitted, their speed is limited to a snail’s pace so that crosswalks and crossing signs can be removed entirely, giving people on foot the right to cross anywhere they like at any time.

As he stood watching a few cars inch through a mass of bicycles and pedestrians, the city’s chief traffic planner, Andy Fellmann, smiled. “Driving is a stop-and-go experience,” he said. “That’s what we like! Our goal is to reconquer public space for pedestrians, not to make it easy for drivers.”

While some American cities — notably San Francisco, which has “pedestrianized” parts of Market Street — have made similar efforts, they are still the exception in the United States, where it has been difficult to get people to imagine a life where cars are not entrenched, Dr. Schipper said.

Europe’s cities generally have stronger incentives to act. Built for the most part before the advent of cars, their narrow roads are poor at handling heavy traffic. Public transportation is generally better in Europe than in the United States, and gas often costs over $8 a gallon, contributing to driving costs that are two to three times greater per mile than in the United States, Dr. Schipper said.

What is more, European Union countries probably cannot meet a commitment under the Kyoto Protocol to reduce their carbon dioxide emissions unless they curb driving. The United States never ratified that pact.

Globally, emissions from transportation continue a relentless rise, with half of them coming from personal cars. Yet an important impulse behind Europe’s traffic reforms will be familiar to mayors in Los Angeles and Vienna alike: to make cities more inviting, with cleaner air and less traffic.

Michael Kodransky, global research manager at the Institute for Transportation and Development Policy in New York, which works with cities to reduce transport emissions, said that Europe was previously “on the same trajectory as the United States, with more people wanting to own more cars.” But in the past decade, there had been “a conscious shift in thinking, and firm policy,” he said. And it is having an effect.

After two decades of car ownership, Hans Von Matt, 52, who works in the insurance industry, sold his vehicle and now gets around Zurich by tram or bicycle, using a car-sharing service for trips out of the city. Carless households have increased from 40 to 45 percent in the last decade, and car owners use their vehicles less, city statistics show.

Article source: http://feeds.nytimes.com/click.phdo?i=69c21ec85eca5bdce8202ba065fed5db