Nuclear Gains Ground in Europe’s Plan to Phase Out Gas

(Bloomberg) -- Nuclear power is emerging as a green back-up option for renewables in Europe and to help reduce reliance on foreign supplies of natural gas.

A global rush to secure gas ahead of winter has sent prices surging, prompting politicians in Britain to turn to nuclear to ensure energy security. But gas is a large part of the electricity mix and getting away from it won’t be easy. Across the channel, the power system in France combines atomic and renewables, and while this makes it less dependent on gas imports, surging electricity prices are forcing the country to call for a less import-reliant Europe.

“It is key to be independent. This is key for France. This is key also for all European countries,” French Finance Minister Bruno le Maire said ahead of a meeting of euro-area finance ministers in Luxembourg. “We don’t want to be dependent on the supplies coming from foreign countries.”

Nuclear is poised to take on a prominent role in the U.K. power system to support intermittent renewables in a plan to phase out natural gas by 2035. The government on Monday pointed to expensive and volatile gas prices as part of the reason behind its thinking.

A reason for the skyrocketing gas prices is lower supplies from Russia, which is filling up its own storage sites in preparation for winter demand.

“The more I look at this, I think nuclear has to be part of the solution,” U.K. Business Secretary Kwasi Kwarteng said. “What we need to do in this country is have a cheap, affordable system, something that’s sustainable, and something which we can rely on ourselves, which protects us from the vagaries of international price movements.”

Nuclear Dominant     

Nuclear power has been dominant in France for years, and it’s planning to reduce that reliance by boosting renewables. But the benefits of a low-carbon system aren’t filtering through into the economy in the current energy crisis. 

Europe’s energy markets are linked through huge power cables that run between nations and a reliance on gas in neighboring countries like Germany is lifting French prices too. The French benchmark power contract rose to a record 152.40 euros ($177.08 )a megawatt-hour on Monday.

The backing for nuclear is a resurgence of sorts for the industry, after the major Fukushima accident in Japan in 2011 that leaked radiation. It forced nations to look at safety, while gas emerged as the bridging fuel between dirtier fossil fuels and renewables. Atomic power projects are expensive and take years to build.

But the current crisis is bringing it back into focus. Finance ministers of the 27-nation European Union meet in Luxembourg Monday and Tuesday to discuss ways to help consumers and companies cope with record prices of gas that have spilled over to the carbon and electricity markets. Numerous energy suppliers in the U.K. have gone bust. France is blocking increase in gas tariffs.    

“The situation we are facing today is unbearable, unbearable for our citizens, unbearable for our private companies,” said Le Maire. “This will be a major political issue for the next years.”

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