Europeans reassess nuclear option as fuel prices, fears grow

London (Platts)--5Oct2005

High oil prices and concerns about security of supply and the environment
appear to be making nuclear power more palatable to the general public and
politicians alike in Europe. The nuclear futures of the UK, Germany, Spain and
Italy are still unclear, but these factors are lending weight to the
pro-nuclear argument, opinion polls show.
     According to an April 2005 report by public opinion research agency Mori,
"attitudes towards nuclear energy are now at their most positive, on balance,
for several years, both among the general public and amongst members of
parliament." According to a Mori survey of UK parliamentarians,the ruling
Labour Party members of parliament are warming to the nuclear industry as a
whole, with 33% viewing the industry favorably in the summer of 2005, compared
with just 26% in summer 2004. Meanwhile, those Labour Party MPs hostile to the
industry fell by 4% year on year. Among all MPs, support for nuclear power is
up 5%, year on year, to 41%, while opposition is unchanged at 41%.
     But only 36% of Labour MPs, compared with 45% of all MPs, wanted nuclear
build to replace those being phased out. Although an increase from 30% Labour
support for nuclear in 2002, still around 45% of Labour MPs are against new
build. Nevertheless, the poll shows the trend is still positive for nuclear.
     The British public are also warming to nuclear energy. "The recent
improvement in public opinion is greatest on the issue of new construction
that is intended only to replace units which will close over the next few
years," Mori said in its April 2005 report. "This is now supported by more of
the population than oppose it for the first time (35% support to 30% oppose),
representing a step change in net support since our first measure of this in
2001." The UK public sets most store by environmental factors when deciding
on energy sources, not cost, so it prefers renewable energy, Mori found.
     UK Prime Minister Tony Blair cited global warming and dependence on "some
of the most unstable parts of the world" for the country's energy needs as
justification for his refusal last week to rule out nuclear power. "The G8
Agreement must be made to work so we develop together the technology that
allows prosperous nations to adapt... and that means an assessment of all
options, including civil nuclear power," he told his Labour Party conference
Sep 26. The Iter nuclear fusion project was "incredibly important," he said.
The government is to produce a wide-ranging review of energy policy next year.

     SPANISH REMAIN MORE HOSTILE TO NUCLEAR POWER 
     Spain faces even more pressing supply concerns than the UK but attitudes
towards nuclear power are less encouraging for the nuclear industry. In a 2004
nationwide poll, only 16% of those surveyed wanted nuclear power on principle,
with 59% against and 25% undecided. Opposition to nuclear power rose to 62%
when asked if 30% of Spain's power generation should come from nuclear, while
the number of undecided shrank to 12% and those in favor grew to 26%. Nearly
55% of those polled rejected nuclear energy because of pollution and 43%
believed that nuclear power plants were operated without enough regard for
safety. Spain's socialist Spanish government is openly opposed to the nuclear
power option. President Jose Luis Zapatero promised in his successful 2004
election manifesto that, if elected, he would phase out nuclear.
     Industry minister Jose Montilla in June 2005 said his government would
reduce the role of nuclear power in the national generation mix to 16.8% by
2011. Spain's nuclear power plants contributed 26.47% of total production from
Jan 1 to Jun 15, 2005, and 31.55% of the electricity generated in Spain in the
same period of last year. Some of Spain's nine reactors are reaching the end
of their scheduled lives. New nuclear build is not talked of openly.
     While the country leads the world in wind power and normally has abundant
reserves of hydro, neither energy source can be counted on. With 2004/2005
being one of the worst hydro years on record, Spain's hydro power reserves and
output have slumped, while oil and gas prices have soared. "We support its
(nuclear) use because Spain's dependence on imported fuels is absolute," said
Alberto Matellan, analyst at the Institute of Economic Studies in Madrid.
"Nuclear power must be supported." He said that, even in good hydro years,
Spain would still need to find more energy sources to meet rising demand.
     The Madrid government is clearly aware of the problem it faces in trying
to reduce nuclear power output while cutting emissions. When replacing nuclear
reactors, security of supply and emissions had to be considered when choosing
other fuels, industry minister Montilla said in June. But his ministry has
since been distracted by Gas Natural's takeover bid for Endesa.
     In Italy, the nuclear power debate looks set to reopen. Enel CEO Paolo
Scaroni said in April that Italians were "paying the cost" of rejecting
nuclear power. At the end of May, Enel and Electricite de France signed a
preliminary agreement allowing Enel to join the French EPR nuclear program.
     The future of German nuclear power generation is also now in doubt.
Analysts have said that, without the Greens, the CDU and SPD would likely
agree to extend nuclear power plants' lives by eight years to 40 years, but
Merkel, the chancellor in waiting, would want utilities to offer something in
return, like lower prices. Here, again, there is no talk of new nuclear build.

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