More fuel for the nuclear energy debate: why the depreciation of nuclear power plants has put power companies on a war footing

During the conversation we had several weeks ago, Alfredo García, a disseminator of nuclear energy well known on Twitter for his alter ego @Nuclear Operator, explained to us how important it seems to him protect operational life of nuclear power plants for the time necessary for the owner companies to recover the investment they have made:

“Those forty years really define a minimum period in which you have to guarantee that the plant works correctly and safely to ensure the investment that has been made. It is not an expiration date. A central it can’t last thirty years because then it would not be fully amortized, but once it has reached forty years and has been safely maintained, and as long as the regulatory body ensures that it operates safely and is profitable, that plant can continue to operate for many more years ”, assures Alfredo.

In the United States, just over 90% of nuclear power plants already have permission to operate for 60 years. And for just a few days this country has three authorized centrals to operate for 80 years, but this model is currently unaffordable in Spain because the nuclear blackout foresees that in 2035 the activity of the last nuclear power plant that will remain in operation that year, that of Trillo, in Guadalajara, will cease.

The energy transition poses challenges that are not easy to solve

It’s not entirely clear yet what will the energy model be like for which Spain will bet in the medium term, but we know that renewable energies will have an indisputable role in it. And it’s good news backed by most of the experts.

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However, there is still no consensus about the energies that should act as backup of renewables. There are those who defend that nuclear energy fits like a glove in this role, and also those who advocate other alternatives, such as the storage of surplus energy in batteries or pumping hydroelectric plants, among other options.

It is still not entirely clear how the energy model that Spain will bet on in the medium term will be, but we know that renewable energies will have an indisputable role in it

Fortunately, the path towards a sustainable and environmentally friendly energy model that we have embarked on poses small obstacles that also need to be resolved, and, sticking to the short term, the entry into force of the new electricity bill is one of they. And it is that the adoption of the new time zones has put in the spotlight, once again, the cost of electricity.

In this complex context, the Government has prepared a draft bill that seeks, among other things and according to legislators, to reduce the price of the electricity bill about 4.8% for domestic consumers using this strategy: to participate in the correction of the dividend received by non-CO₂-emitting plants.

It sounds complicated, but, in reality, it is not that much. To understand what is happening, it is necessary to know, on the one hand, what the Government says, and, on the other, what the electricity companies argue. The first aims to cut something more than 1000 million euros per year the remuneration received by the electricity companies that own nuclear power plants, hydroelectric plants and some wind power plants as a consequence of the price of CO₂ in the emission rights market.

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The great debate about whether nuclear energy is becoming more expensive to produce: two experts with different views explain it to us

The plants that have come into operation after 2005 will not be affected by this measure, and a part of that money, again according to the Government, will be used to reduce the cost of the electricity bill and the economic impact it will have on consumers the energy transition. But this is only one side of the coin. Nuclear power plants are responsible for generating 67% of electricity affected, so the impact of this measure on their coffers can be profound, which has caused the electricity companies to put themselves on a war footing.

The electricity companies assure that the Spanish nuclear power plants are not amortized

The quote from Alfredo García with which I started this article defends how important it is for nuclear power plants to remain active at least during their entire amortization period as long as, yes, it is possible to guarantee the safety of the facilities. Otherwise the proprietary companies they will not recover the investment they have done in them, and the nuclear power plants will give losses.

According to Foro Nuclear, which is the association that represents the interests of the Spanish nuclear industry, the processing of the preliminary draft law that the Government is preparing, places nuclear power plants in an extremely delicate position. According to this organization, the plants are not amortized and invest approximately annually 300 million euros to maintain the operability of the facilities.

Foro Nuclear assures that the capital pending amortization is over € 5.5 billion, and that in this context and as a consequence of the low price of electricity, Spanish nuclear power plants are generating losses. This textual quotation from this association clearly reflects the dissatisfaction of the electricity companies with the new government measure: «The draft bill, the current rates, taxes and taxes, and the future market context increase the financial asphyxia of the nuclear park and the lead to their cessation of activity.

The disputes between the electricity companies and the Government concern us as consumers because they will surely have a perceptible impact on the electricity bill we pay the users. The challenge, without a doubt, is to contain the cost of electricity as much as possible and design a smart energy transition that leaves no one behind. Let us cross our fingers that both the Government and the electricity companies measure up as we all walk this path together.

Cover Image | Nuclear Forum

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