C. Ghiță, Nuclearelectrica: Romania needs a coherent and integrated plan of investments in new capacities

Nuclearelectrica will soon initiate a feasibility study to establish concrete data for the development of new electricity generation capacities and to respond to the National Energy Climate Plan (NECP). No truly robust energy system can really work only on the basis of renewable sources, said Cosmin Ghiță, the CEO of Nuclearelectrica, for Energynomics Magazine. In addition to renewables, hydro and nuclear energy are needed, said Cosmin Ghiță.

How do you see the development of Romania’s own energy mix, within the Green Deal?

The necessary and sufficient condition is to have resources, and Romania has such resources. Romania, however, needs a coherent and integrated plan of investments in new capacities. Even if we are still in a transition phase, obviously all energy policies converge towards the eco-economy in the fundamental sense of the Green Deal.

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Radically modified energy systems cannot occur overnight, so Romania, but also the other EU member states, capitalize on the available resources until the moment when a fully decarbonized energy mix can exist in such a way as to support all the system, consumption, environment and population needs.

The main idea at European level that decarbonization targets could be achieved by using only renewables is a utopia. No truly robust energy system can really work solely on renewable sources.

A new increase in the target for reducing CO2 emissions by 2050, with a 50-55% reduction by 2030, instead of 40%, and zero CO2 emissions by 2050, has just been launch for debate. Decarbonization targets require a well-thought-out mix of complementary sources that allow the energy system to operate steadily, with an extremely low level of factors of dependence. In addition to renewables, which are part of this process, but which, unfortunately, also come with a number of challenges in terms of availability and climatic factors, hydro and nuclear are needed.

Related to this, in order to ensure the realization of investments, a guarantee mechanism is needed, practically a temporary state support to facilitate the transition and the decarbonization process. We are talking about guarantee mechanisms that do not intervene in the energy market, that do not introduce artificial influences of energy markets.

It is very difficult to achieve an extremely low level of CO2 emissions without nuclear. Just as an example, Units 1 and 2 at Cernavodă have avoided emitting 160 million tons of CO2 since their commissioning. Not to mention the significant escalation of decarbonization costs. Decarbonization essentially means the formation of a clean energy mix. Romania has all the three clean sources – hydro, nuclear, renewable -, sources whose potential can be maximized through investments. We can secure an energy future in line with the decarbonization targets at European level by intelligently using the resources we have.

How do you see the nuclear industry in 2020-2030, in Europe and around the world, in the context in which France and Germany are closing down units, while other states are continuing their nuclear programs?

The European Commission claims that the Green Deal must be an engine of recovery after the Covid-19 pandemic, the main idea being not to return to the old polluting practices. In itself, the idea is commendable, but impractical at the moment. No matter how much effort is made – and efforts are made! – at this moment it is not realistic to give up everything that is old and polluting. Not all states have such capabilities, many of which are in the process of increasing their power capacity. Therefore, temporarily, they will have to fully exercise their prerogative to use the resources they have.

There are countries heavily dependent on fossil fuels, such as Poland, which want to implement a nuclear program to achieve environmental targets. At EU level, there are 4 nuclear units under construction in Finland, France and Slovakia, and 8 are in the planning phase (Bulgaria, the Czech Republic, Finland, Hungary and Romania). The pro-nuclear message is therefore strong and sustained.

I also mention the efforts of large states globally, such as the US or Canada in this context of emphasized importance of nuclear energy. I am thinking about their initiative for the promotion and development of the nuclear industry, manifested within the Clean Energy Ministerial, to which Romania has already joined, the NICE Future plan, as part of the CEM, entirely dedicated to nuclear energy. There are a multitude of interdependent factors such as energy systems, environment, economic factors that propel this unprecedented support globally.

I think the first thing that needs to be corrected is the European energy policies themselves. If we really want zero carbon emissions in 2050, we will need energy policies which are inclusive, not exclusive.

The European Green Deal states, as the ultimate goal of Taxonomy shows, that it does not take nuclear energy into account in the transition fund. However, the Technical Expert Group Taxonomy acknowledges its limitation in determining whether the nuclear value chain causes significant damage and recommends a more in-depth technical analysis of the life cycle, but also the existing and potential impact. Objectively, from all points of view, it would have been crucial and fair that such an analysis have pre-existed the Taxonomy, instead of this a priori judgment, despite all doubts. The implications are major and any decision at present must be made on the basis of sound analysis, and not on the basis of subjective perceptions expressed in official documents.

The discussion on the EU taxonomy is relevant and important, as it has an impact on current and future investments in nuclear projects and on the possibility of accessing funding. This can hinder and delay the development of Generation IV reactors and other innovative projects, such as SMR – Small Modular Reactors, by restricting funding and regulations. In addition, it has profound social, environmental and economic consequences for countries that rely heavily on nuclear energy or seek to replace carbon-based economies with nuclear power plants.

At EU level, nuclear energy currently supplies about 50% of low-carbon electricity. The European Commission’s forecasts estimate that “the nuclear share in 2050 will remain quite similar in all eight scenarios” (12-15%). And yet, the hasty conclusions of Taxonomy say otherwise!

However, how broad is the support that nuclear energy has in Europe and in the world?

Recently, at the beginning of May, Romania co-moderated with the United States, in an online event, the Working Group on Nuclear Energy within the Transatlantic Pact for Energy Cooperation, an event in which many states supported the idea of a common voice to support nuclear energy as a clean and firm source in achieving decarbonization targets. We are talking about states like Bulgaria, the Czech Republic, Estonia, representatives of the European Commission, Georgia, Hungary, Moldova, Poland, Romania, Slovenia, Ukraine and the USA.

Member States will work in small groups on areas of common interest, which include improving cooperation on advanced reactor technologies, communicating the role of nuclear energy in integrated, clean energy systems, assessing the viability of authorization and long-term operations management and addressing technical and policy environmental issues related to nuclear waste management.

In addition to energy generation, the nuclear industry has major benefits associated with other industries. One of them is the use of thermal and electrical energy for the production of hydrogen, which until now came mainly from the gas industry. The nuclear industry can play a major role in this, as the need for hydrogen in other major industries is known. Thus, we are already talking about integrated systems with multiple effects. As an example, a single reactor with an installed capacity of 1,000 MW can produce more than 200,000 tons of hydrogen per year.

The interest of states exists, cooperation exists, nuclear energy is an essential part of the mixed future of decarbonization.

NECP talks about new nuclear capabilities that would be equivalent to a single new reactor by 2030. How do you think Romania should continue its nuclear program, after denouncing the memorandum with CGN?

In the GMS of June 12, the shareholders approved the abrogation of the Strategy for the continuation of the Units 3 and 4 Project from Cernavodă NPP, the mandate of the SNN Board of Directors to initiate actions regarding the termination of negotiations with CGN, as well as termination of the legal effects of the Memorandum of Understanding for construction, operation and decommissioning of Units 3 and 4 of Cernavodă NPP and of the Investor Agreement in preliminary form, but also the mandate of the SNN Board of Directors to initiate the necessary steps to analyze and crystallize strategic options for the construction of new electricity generation capacities from nuclear sources.

As a result, we will initiate the cessation of negotiations with the CGN and the legal effects of the documents registered between the parties so far. We will also initiate actions to analyze the options for further increasing the nuclear capacity at Cernavodă NPP.

Building one reactor is a possibility that both the Romanian state, through the relevant ministry, and SNN have taken into account and communicated as such in the past. We will see, on concrete data, which will be the most advantageous option in terms of necessity, costs and time. We will initiate a Feasibility Study as soon as possible in order to have concrete data on the development of the project as soon as possible and to answer NECP as well.

What is certain is that postponing the previous project was an unacceptable solution that was not helpful at all. We have goals to meet, we have the resources and we have experience. Therefore, we will make every effort to reach the construction phase as soon as possible, so that we have new capabilities in the horizon of the 2030s.

What is the strategic investment plan for the period 2020-2025?

We will make investments for which we already have a clear planning and implementation schedule. Large investment projects such as the refurbishment of Unit 1 and the detritification plant are in full swing. Much of the information accumulated in the analysis processes will be the basis for either the preparation of feasibility studies or the clear and irrevocable structuring of funding. The investment strategy for 2020-2025 was approved by shareholders on June 12.

Some of the investments were already underway; they are important investments for the company and of course they will continue. What is new is the investment in the production of Cobalt 60 and a special emphasis on the investment in cyber security, which have become a priority.

The value of investment projects, strictly in the period 2020-2025, according to the strategy and stages of implementation is 2.29 billion lei.

How do you see the National Uranium Company solved?

In the first place, CNU needs a major efficiency process and a development program.

Meanwhile, Romania must maintain its historical advantages in terms of the raw material component in the nuclear cycle. SNN is also direct interested in this. We have a GMS decision by which SNN to take over part of the assets of Feldioara, the CNU branch, and the mining license in the perimeter of Tulgheș-Grințieș. Because, obviously, it must be an efficient process for us as well, we will analyze which are the most appropriate methods in this regard. The aim is to ensure the processing of raw materials beyond maintaining this economic-strategic component, as the predictability and security of supply of raw materials is a priority for Nuclearelectrica.

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This interview firstly appeared in the printed edition of Energynomics Magazine, issued in July 2020.

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