24.11.2001EN Official Journal of the European Communities C 330/15

Opinion of the Advisory Committee of the Euratom Supply Agency (1) on the Commission Green Paper ‘Towards a European strategy for the security of energy supply’

(2001/C 330/05)

COM(2000) 769

The Committee welcomes in general the adoption by the maintain the share of nuclear capacity in the total Commission of its Green Paper on security of energy supply. installed capacity at 22 %, 100 GWe of new nuclear It creates an opportunity to have a large and open debate on all capacity are to be constructed by 2025 to replace sources of energy, including nuclear energy, and the Committee existing reactors and cover new demand. In the ‘Nuclear has therefore taken the opportunity to adopt an opinion on the Renaissance’ sensitivity scenario of the ‘European Union issue. energy outlook to 2020’ (3) the lowest carbon cost (which means the lowest cost to society) is achieved with an installed nuclear capacity of 212 GWe and a production of approximately 1 500 TWh in 2030. The enlarged bureau of the Committee met on 16 February 2001 and the Committee was convened on 28 March 2001.

On 28 March 2001 the Committee adopted this opinion by a (4) Beyond electricity production for today’s application, the large majority. Committee further recalls that there are other potential peaceful uses for nuclear that could help to further reduce greenhouse gas emissions in the longer term, and reduce external dependence on fossil fuels. They concern 1. ROLE OF NUCLEAR ENERGY hydrogen production, desalination and process heat (with new high-temperature reactors). Role of nuclear energy as a sustainable source of elec- tricity

(1) Together with environmental protection and economic efficiency, security of supply is one of the three funda- (5) In view of the delicate balancing of the three main energy mental objectives of energy policy. The Committee shares policy objectives, the Committee believes that, without the Commission’s concerns with regard to increased prejudice to the Member States’ responsibilities for external dependence over the next few decades. energy choices, all energy options must remain open. Nuclear energy should not be classified with fossil fuels as a less ‘desirable’ source. (2) The Committee is of the opinion that nuclear energy presently plays and can continue to play a vital role in the sustainable production of electricity. It has negligible emissions of greenhouse gases and so contributes to the achievement of the objectives set by the ‘Kyoto Protocol’ (6) Several viable technical solutions exist for the of the United Nations Framework Convention on climate management of spent fuel. Facilities exist that allow repro- change (UNFCCC). Nuclear energy is the only industrially cessing or safe storage of spent fuel for tens of years. mature energy source with negligible greenhouse gas Other facilities for processing and disposal of low level emissions, which can be expanded. It should therefore and intermediate level radioactive waste are already in be recognised as such and not excluded from the operation in the European Union. Disposal facilities for different ‘flexibility mechanisms’ as discussed in the high-level waste and conditioned spent fuel are under Kyoto Protocol. development in all countries that have nuclear power. They generally have reached a stage of advancement where the scientific and technical experts feel confident (3) The Committee recalls that at least two energy mix of their feasibility and ultimate safety. When their scenarios used by the Commission demonstrate that the implementation time will come, the precise site selection most effective way of achieving the greenhouse gas and authorisation of these disposal facilities will be made emission limits of the Kyoto Protocol include, amongst with the assent of the public authorities of the respective other measures, the construction of several new nuclear Member States, and will involve public consultation in the power plants. The ‘Dilemma Study’ (2) concluded that to decision-making process. This very diversity of processes demonstrates the existence of safe and reliable tech- nology (4). (1) Members of this Committee act as expert advisors to the Supply Agency and do not formally represent or legally commit the Member States or organisations from where they come. (3) Energy in Europe, special issue November 1999, pp. 87-88, 173, (2) ERM Energy, Dilemma Study: Study of the contribution of nuclear http://www.shared-analysis.fhg.de/Pub-fr.htm power to the reduction of carbon dioxide emissions from electricity (4) Facilities in Member States are regularly reported upon in the generation, 1999, 157 pages, http://europa.eu.int/en/comm/ Euratom Supply Agency’s Annual Reports, Chapter III — Nuclear dg17/dilemma.pdf energy developments in the European Union Member States. C 330/16EN Official Journal of the European Communities 24.11.2001

Nuclear energy as a competitive source of electricity nuclear energy is less sensitive to fuel cost than fossil which internalises all its cost components energy, the recent price increase of fossil fuel improves even more the competitiveness of future nuclear energy (7) Nuclear energy is a competitive source of energy in a capacity. Furthermore nuclear energy is much less subject deregulated market. Only a very small portion of the to economic risks to security of supply as caused by the total production cost of nuclear energy depends on the ‘erratic fluctuations’ of fossil fuel prices. Finally the uranium price (5 to 7 % of the levelised forward cost) (5). decision of a power company in Finland to seek author- The total nuclear fuel cycle cost, including the isation for a new nuclear power plant and studies demon- management of spent fuel and waste, is estimated to strate that nuclear electricity production costs are account for a modest share of the total cost (20 to competitive in comparison to other options (8). 25 % of the levelised forward cost) (6). As a consequence the nuclear energy production cost is stable and competitive in comparison to fossil energy sources which depend more on the volatile oil and gas markets. (10) Unlike most other energy sources, all cost components (capital investment including decommissioning, fuel including waste management, operation and maintenance including radiological protection) are included in the (8) Nuclear energy generation, including building plant and nuclear energy cost. Therefore a comparison of total fuel supply operations, provides for a very high domestic cost should include all cost components, including those European added value both in terms of sophisticated which are so far not internalised in fossil energy sources, technical and intellectual input and in terms of highly as greenhouse gas emissions. qualified jobs.

Taxation (9) The figures given in footnote 61 on page 67 of the Green Paper (footnote 60 in the French version) are just one of (11) The Committee believes that additional taxation on several cost estimates and could be misleading. Compared nuclear energy to support renewable energy would to other electricity production sources, existing nuclear disregard a basic reason why renewable energy sources energy is without question generally the most competitive are supported, namely the avoidance of greenhouse gas source, because the capital investment is most often emissions. In order to maximise the effect of avoiding largely amortised. For future capacity, according to greenhouse gas emissions or other environmental studies taking into account the low fossil fuel cost damage, nuclear energy should not be subject to any observed before recent increases, nuclear energy is the additional burden that is not related to the environmental most competitive in several countries and almost the characteristics of nuclear power. most competitive in several other countries (7). As

(5) Illustrative Nuclear Programme for the Community (PINC), COM(97) 401 final, p. 11 and table p. 41. Leading role of Community industry (6) Illustrative Nuclear Programme for the Community (PINC), COM(97) 401 final, p. 11. (12) The Community industry has played a leading role in the (7) OECD Nuclear Energy Agency (NEA) and International Energy global development of nuclear energy in the past, and is Agency (IEA), ‘Projected costs of generating electricity — update capable, if public acceptance improves and new nuclear 1998’, OECD, Paris 1998 (nuclear between USD 2,5 and 4,1 cents capacity is required, of being part of future efforts. In the per KWh and most competitive in seven countries on 18, of which meantime expertise should be preserved in order to keep seven did not report nuclear cost projections, with a 5 % discount and in two countries with a 10 % discount); open the option of developing new nuclear generation French Ministry of Economy, Finance and Industry, Directorate Gas capacity. Electricity and Coal (DIGEC), ‘Les coßts de rØfØrence de la production Ølectrique’, 1997, p. 50 (nuclear between FRF 20,7 and 21,2 cents per KWh, or approximately 3,16 to 3,23 eurocents per KWh, and most competitive at 5 % and 8 % discount except with low US dollar exchange rate and low gas prices); an overview of the (13) The Community industry, with the active involvement of DIGEC reports is given in the Report to the Prime Minister by Member States and Community institutions is also active Charpin, Dessus and Pellat, ‘Economic forecast study of the in the development of advanced nuclear reactor types (e.g. nuclear power option’, annex I, fiche 9; the ‘European pressurised water reactor’ EPR or high- Belgian independent Commission on energy choices (‘AmpŁre’, temperature reactors), advanced nuclear fission tech- Commission), ‘Rapport de la Commission pour l’analyse des nologies (e.g. the Myhrra project) and, much further modes de production de l’ØlectricitØ et le redØploiement des Energies (AmpŁre) au secrØtaire d’État à l’Ønergie et au dØvelop- into the future, the development of nuclear fusion tech- pement durable’, conclusions and recommendations p. 16 (nuclear nology (e.g. the ITER programme), which could pave the between BEF 1,22 and 1,70 per KWh, or approximately 3,02 to way for a better acceptance of nuclear energy in the 4,21 eurocents/KWh, and most competitive with and without inter- future. nalisation of greenhouse gas cost). The US Nuclear Energy Institute has indicated that the real costs of nuclear electricity production are below coal and gas even in areas (8) Risto Tarjanne & Sauli Rissanen: ‘Least-cost option for baseload where these fossil sources are abundantly available like the USA (see electricity in Finland’, The Uranium Institute 25th Annual ‘Production costs made nuclear cheapest fuel in 1999, NEI says’, in International Symposium 2000, London 1.9.2000; Nucleonics Week, Volume 42, issue 2, p. 3). http://www.uilondon.org/uilondon/sym/2000/sym00prg.htm 24.11.2001EN Official Journal of the European Communities C 330/17

(14) With over 3 500 reactor years of safe operation (19) At today’s annual global consumption rate of 60 000 experience in the EU and with an advanced regulatory tonnes of natural uranium, the coverage (9) of long term system, it has been demonstrated that nuclear energy operation of nuclear power is well assured: production in the EU is a safe and reliable process. Presently the IAEA has an established set of adequate safety standards for all relevant areas of the nuclear power cycle and EU Member States who have concluded — known conventional resources at a cost below the IAEA Convention on nuclear safety, have opened up USD 80: 3 million tU or 50 years, to international scrutiny and peer review. This is a good basis for continuing to operate a safe nuclear industry in Europe. — possible conventional resources at a cost of up to USD 130: 9 million tU or 150 years,

Role of the European institutions (15) The Euratom Treaty recognised the need to promote the — possible conventional resources without specified cost: development of nuclear energy in order to improve 16 million tU or 260 years, security of energy supply. The Green Paper demonstrates that there are still concerns with security of supply. The EU institutions should play a constructive role and should therefore not enact legislation which would impede the — unconventional resources in phosphates: 22 million choice of existing or future Member States to opt for tU or 370 years (exploited in the past), nuclear, as such obstacles would be contrary to the desired security of supply of the Union.

— unconventional resources in seawater: 4 000 million tU or 66 000 years (never exploited). (16) Following open debate, European institutions should, without prejudice to the choice of Member States to use nuclear energy, play a more active role in fostering public acceptance. They should explain to the public the role of (20) The Committee agrees with the Commission that the the EU energy policy, including the use of nuclear energy, uranium sources are located in geographically diversified in the avoidance of greenhouse gas emissions. The Green areas, in most cases in politically stable countries. Paper can be a part of such an effort. Uranium supply to the European Union is supervised by the Euratom Supply Agency with a policy of stimulating geographical diversification of supply, a policy which is generally shared by nuclear power operators. (17) The Euratom Treaty constitutes the relevant legal framework at Community level, and within this framework the Commission and the Euratom Supply Agency ensure a more structured situation with respect to nuclear fuel supply security than is the case with other Nuclear fuel cycle supplies energy sources. (21) The Community industry also masters the whole nuclear fuel cycle and plays a leading role from uranium mining, conversion, enrichment, fabrication (the ‘front end’ of the fuel cycle), to reprocessing, interim spent fuel or waste storage and spent fuel or waste conditioning in prep- 2. SUPPLY OF NUCLEAR FUEL aration for final disposal (the ‘back end’ of the fuel cycle). Nuclear energy can therefore contribute, as an Availability of sustainable uranium resources essentially domestic source, to the long-term security of energy supply of the European Union, and is less (18) Uranium resources are available in sufficient amounts to susceptible to disruption than fossil energy sources continue for an extremely long time and at a stable cost, heavily dependent upon fuel imports. the production of nuclear energy. This could save for future generations valuable but limited fossil resources. (9) Source NEA-IAEA. If the energy content would be more intensively To assess the long-term resources not only the known used by fast breeder reactors, the coverage would be approximately conventional resources at a low production cost have to 50 times the present coverage: respectively for known conventional be taken into account, but also possible conventional resources at a cost below USD 80: 3 million tU or 2 500 years, resources at a somewhat higher cost and unconventional possible conventional resources at a cost of up to USD 130: 9 resources, some of which have been exploited in the past, million tU or 7 500 years, possible conventional resources without specified cost: 16 million tU or 13 000 years, unconven- as well as alternative reactor types (fast breeder reactors) tional resources in phosphates: 22 million tU or 18 500 years, which could use more intensively the energy potential of unconventional resources in seawater: 4 000 million tU or uranium. 330 000 years. C 330/18EN Official Journal of the European Communities 24.11.2001

Security of nuclear fuel supply 3. Are tax and State aid policies in the energy sector an (22) The nuclear industry in the European Union has obstacle to competitiveness in the European Union or historically been reliably supplied with uranium from not? Given the failure of attempts to harmonise indirect external sources during its entire history. An important taxation, should not the whole issue of energy taxation be reexamined taking account of energy and environmental contribution to this stability has come from the Euratom objectives? Treaty (10), which charges the Community with the task of ensuring that all users receive a regular and equitable supply. The Euratom Supply Agency plays a central role Answer: When energy taxation aims at the environmental in performing this task in cooperation with the industry. objective of reducing greenhouse gas emissions, it should not burden electricity from nuclear reactors, because this energy is almost free of emissions. (23) The European Union has available within its borders the complete strategic technology and capacity to provide for new nuclear fuel and the processing and disposal of spent 4. In the framework of an ongoing dialogue with producer fuel. Most of the uranium mined and imported comes countries, what should supply and investment promotion from sources controlled by EU industry. agreements contain? Given the importance of a partnership with Russia in particular, how can stable quantities, prices and investments be guaranteed? (24) Several countries and nuclear power operators keep nuclear fuel strategic inventory in various forms to further enhance security of supply. Inventory of nuclear Answer: Beyond the scope of the Committee. fuel is not only much easier to maintain but is also significantly less financially burdensome on society than keeping inventories of oil or gas. Inventory of nuclear material may amount to several years’ requirements 5. Should more reserves be stockpiled — as already done for unlike inventories of oil and gas which are only feasible oil — and should other energy sources be included, such as gas or coal? Should the Community take on a greater role for a few months of requirements. in stock management and, if so, what should the objectives and modalities be? Does the risk of physical disruption to energy supplies justify more onerous measures for access to resources? 3. REPLIES TO THE QUESTIONS OF GREEN PAPER

Answer: The Committee recalls that in the EU operators already keep significant inventories of nuclear fuel materials. Inventory of nuclear fuel is not only much easier to maintain but is also significantly less financially 1. Can the European Union accept an increase in its burdensome on society than keeping corresponding inven- dependence on external energy sources without compro- tories of oil, coal or gas. The Euratom Treaty and the mising its security of supply and European competitiveness? Euratom Supply Agency constitute the legal framework at For which sources of energy would it be appropriate, if this Community level. For nuclear there is no need for were the case, to foresee a framework policy for imports? In additional regulation. this context, is it appropriate to favour an economic approach: energy cost; or geopolitical approach: risk of disruption? 6. How can we develop and ensure better operation of energy Answer: Without addressing the issue of an increase in the transport networks in the European Union and neigh- EU’s external dependence, the Committee points out that, as bouring countries so as to enable the internal market to far as security of supply is concerned, nuclear energy is function properly and guarantee security of supply? sustainable and is less susceptible to external disruptions than fossil fuels. Answer: Beyond the scope of the Committee.

7. The development of some renewable energy sources calls for major efforts in terms of research and technological 2. Does not Europe’s increasingly integrated internal market, development, investment aid and operational aid. Should where decisions taken in one country have on an impact on co-financing of this aid include a contribution from the others, call for a consistent and coordinated policy at sectors which received substantial initial development aid Community level? and which are now highly profitable (gas, oil, nuclear)?

Answer: Beyond the scope of the Committee. Answer: The reason why renewables are to be supported is their contribution to the reduction of greenhouse gas emissions. It would not seem appropriate to impose a burden on nuclear energy, which is the most developed virtually emission free technology. (10) Articles 2 and 52, EA — Treaty establishing the European Atomic Energy Community (Euratom). 24.11.2001EN Official Journal of the European Communities C 330/19

11. Should energy saving in buildings (40 % of energy 8. Seeing that nuclear energy is one of the elements in the consumption), whether public or private, new or under debate on tackling climate change and energy autonomy, renovation, be promoted through incentives such as tax how can the Community find a solution to the problem of breaks, or are regulatory measures required along the nuclear waste, reinforcing nuclear safety and developing lines of those adopted for major industrial installations? research into reactors of the future, in particular fusion technology? Answer: Beyond the scope of the Committee.

Answer: The Committee refers to its opinion and stresses in particular some points it has raised, namely:

12. Energy saving in the transport sector (32 % of energy — Spent fuel management is an operational reality in the consumption) depends on redressing the growing EU. Facilities exist for both reprocessing and safe storage imbalance between road and rail. Is this imbalance of spent fuel. Technical solutions to the nuclear waste inevitable, or could corrective action be taken, however problem exist in the EU (deep geological repositories in unpopular, notably to encourage lower use of cars in salt, clay or granite), and plans to build sites are urban areas? How can the aims of opening up the sector underway in Finland and Sweden. The political to competition, investment in infrastructure to remove decisions of selecting sites are still due in several bottlenecks and intermodality be reconciled? Member States. Further spent fuel treatment tech- nologies are under consideration. Answer: Beyond the scope of the Committee.

— Nuclear safety is well under control in the EU and research into advanced reactors is not limited to the long-term development of nuclear fusion, but also includes advance pressured water reactors (the EPR), 13. How can we develop more collaborative visions and high temperature reactors, and alternative fission integrate the long-term dimension into deliberations and processes (accelerators). actions undertaken by public authorities and other involved parties in order to evolve a sustainable system of energy supply. How are we to prepare the energy options — Nuclear energy is not only ‘one of the elements’, it is a for the future? mature and developed proven technology with a minimum of greenhouse gas emissions, and hence it Answer: The European institutions should play a is indispensable if the EU really wants to achieve the constructive and more prominent role, in fostering public Kyoto Protocol objectives. acceptance of a new energy policy for a sustainable energy system, including nuclear energy.

9. Which policies should permit the European Union to fulfil 14. Any other questions or proposals: its obligations under the Kyoto Protocol? What measures could be taken in order to exploit fully potential energy savings which would help to reduce both our external — dependence and CO2 emissions?

Answer: If nuclear were to be phased out there is no chance of achieving these objectives. To achieve the Kyoto Protocol 4. CONCLUSION objectives, any realistic policy would, in conjunction with other measures, at least aim to keep, nuclear energy (25) The Committee is of the opinion that nuclear energy is a approximately at its share of the energy mix (which long-term sustainable energy source, and concludes that means allowing additional new or replacement reactors). therefore:

(a) From the point of view of security of supply, nuclear energy has evident advantages in comparison to other energy sources, particularly at Community level, and could be considered either as an essentially domestic 10. Can an ambitious programme to promote biofuels and source or as a strategic Community reserve of the other substitute fuels, including hydrogen, geared to 20 % European Union. of total fuel consumption by 2020, continue to be imple- mented via national initiatives, or are coordinated decisions required on taxation, distribution and prospects for agri- — Uranium resources are sufficient to sustain cultural production? long-term nuclear energy production and thus to save for future generations valuable limited fossil Answer: Beyond the scope of the Committee. resources.

— Inventories of uranium are easier and cheaper to maintain when compared to other energy sources. C 330/20EN Official Journal of the European Communities 24.11.2001

— Within the framework of the Euratom Treaty, the (c) From the point of view of economic efficiency, nuclear Commission and the Euratom Supply Agency energy can be competitive, even in the prevailing ensure a more structured situation with respect to conditions of a deregulated and liberalised EU nuclear fuel supply security than is the case with internal energy market, and particularly existing other energy sources. nuclear capacity.

— European industry has played a leading role in the — Long-term production costs of nuclear energy are development of nuclear energy and is capable of predictable and competitive with fossil and future efforts. renewable energy sources.

— Nuclear energy should not be made subject to — Nuclear energy can contribute, as an essentially additional taxation designed to support renewable domestic source, to the long-term security of energy sources. energy supply of the European Union. — Unlike most other energy sources, nuclear energy (b) From the point of view of environmental protection, and costs include all nuclear cost components. particularly the Kyoto Protocol goal to reduce greenhouse gas emissions, nuclear energy is now (d) A Community strategy proposed by the Commission to and for the foreseeable future, a major large-scale integrate these energy policy objectives and to achieve reliable technology that can help achieve the EU the Kyoto objectives in the most economic way, committed targets. should be realistic and take into account long term and short term needs and has to recognise that nuclear energy can play a crucial role in the EU’s — Nuclear energy can play a crucial role, among future energy mix. other energy sources, in achieving the emission levels set by the Kyoto Protocol. The Committee requests the Director-General of the Supply Agency to transmit this opinion to the Commission of the — For the management of spent fuel and the disposal European Communities, as a contribution to the debate on of nuclear waste technical solutions exist, but they the Commission Green Paper ‘Towards a European strategy need to be complemented by political decisions to for the security of energy supply’ COM(2000) 769 final, and confirm strategic choices and select storage sites, recommends its publication.