Sunday, July 6, 2008

Europe's G8 giants divided on nuclear energy

Germany and France remain far apart on how to generate electricity

Foreign policy wonks are participating this weekend in an annual exercise of watching and reporting on the major western powers try to solve the world's problems. It is called the G8 conference and is a yearly gathering of the U.S., U.K. France, Germany, Japan, Canada, Italy, and Russia.

Climate change and nuclear energy are on the top of the agenda. AP reports the G-8 leaders agreed at last year's summit in Heiligendamm, Germany, that they would set a goal of a 50 percent cut in the world's greenhouse gas emissions by 2050. Japan hopes to transform this long-term goal into an actual agreement during this year's summit.

bush g8At a press conference in Washington before leaving for the meeting, President Bush (left) repeated the U.S. position that it will not be possible to reach an effective agreement unless China and India are included in it. His remarks underscore the U.S. argument that any agreement reached only among the G-8 nations would be meaningless.

So, what's up with China and India? It turns out the answer is quite a bit.

China doubles its nuclear bet and then some

For its part China told Westinghouse this week it wants to buy 100 AP1000s from the company. This request came as a surprise to new Westinghouse CEO Aris Candris who said the firm had been expecting orders for up to 40 reactors.

The AP1000 generates up to 1,150 MWe, but Candris said work is underway to design a new reactor that will generate 1,700 MWe and will be targeted at China and India as key markets. The unit is clearly designed to compete with the Areva EPR which is roughly the same size. Areva sold two to China last November.

India's nuclear deal on again?

With regard to India, Reuters reports Indian Prime Minister Manmohan Singh left for Japan on Monday for a G8 summit where he may formally press ahead with a civilian nuclear deal with the United States. He finally convinced one of the political parties opposing the deal to support it.

The deal would be one of Singh's most important achievements, giving India access to U.S. nuclear fuel and technology and moving the country's trade and diplomatic relations closer to the West. It is potentially worth billions of dollars to U.S. and European nuclear supplier companies and would give India more energy alternatives to drive its booming economy.

France plans second EPR

Sarkozy 2nd nuclearWhile all the high level hand waving was going on in Tokyo, French President Nicolas Sarkozy (right) announced just before his departure for the G8 meeting that a second Areva EPR would be built in France. He made the announcement while visiting the Creusot site (photo) in eastern France owned by steelmaker Arcelor which makes large forgings for nuclear plants. Anne Lauvergeon, CEO of Areva, came with Sarkozy to visit the plant. A new EPR is under construction in Flamanville, France, and another is being built in Finland.

Germany still conflicted over nuclear energy

Germany is the last of the G8 nations to sign on for the use of nuclear energy as an alternative to fossil fuel. It is still politically divided over the issue with Social Democrats this week proposing to tax existing plants out of existence. In response the Christian Democrats have launched a massive public relations drive to revive Germany's use of nuclear energy and stop a plan to close and decommission the existing reactors.

AngelemerkelGerman Chancellor Angela Merkel (right) finds herself in an awkward position as one of Europe's biggest polluters in terms of greenhouse gases as she arrives at the G8 summit. The Social Democrats are exploiting German unease with rising fossil fuel costs and propose to tax nuclear plants charging them with "profiteering" during the current energy crisis.

A proposal seen by Reuters would raise $1.6 billion Euros. The wire service reported the proposal showed the party is ready to play on divisions within German society over the advantages and risks of nuclear energy. The logic of the proposal seems to be upside down.

The paper said, "Electricity production in nuclear power stations enjoys unjustified privileges." The SPD paper charged the largely written-off equipment at nuclear plants was highly profitable, and that nuclear operators did not have to pay any carbon avoidance costs benefiting from favorable arrangements for insurance and decommissioning costs. "Electricity production in nuclear power stations enjoys unjustified privileges," the SPD paper said according to Reuters.

Reuters also reported that the SPD wants to stick to Germany's nuclear phase-out program for its 17 reactors by 2021, while Chancellor Angela Merkel's Christian Democrats (CDU), with whom the SPD shares power, wants the plan scrapped. The CDU argues the national economy needs cheap power for longer and that more coal, of which Germany has an abundance, is not the answer in a world facing the threats of global warming.

This seems to be a case where political ambition and 'green' ideology have combined to throw out common sense along with a commitment to slowing the pace of global warming. If Ms. Merkel succeeds in overturning the planned phase out of nuclear reactors in Germany, it will unravel the ruling coalition and force new elections with nuclear energy front and center as the key issue.

# # #

No comments: