New EU Study Shows Path To Net Zero Requires Nuclear
“The EU is targeting renewables to enable reaching net zero emissions by 2050. A peer-reviewed study shows achieving the goal will not alter the global temperature increase but will make EU electricity more expensive. ”
A peer-reviewed report prepared at the end of last year for the ECR Group and Renew Europe shows that for the European Union (EU) to achieve net zero carbon emissions by 2050, it will need to embrace nuclear power. The report, “Road to EU Climate Neutrality by 2050: Spatial Requirements of Wind/Solar and Nuclear Energy and Their Respective Costs,” was prepared by a team of authors and contributors and was released by Renew Europe on March 22nd.
The report will play an important role in the debate over the policies EU member countries should adopt in dealing with climate change. This is because the report addresses several key questions likely to shape the upcoming debate over how best to achieve net zero emissions. As the report stated:
The EU has endorsed the ambitious objective of achieving climate neutrality (i.e., net zero greenhouse gas carbon emissions) by 2050. An energy transition is necessary to achieve this objective. This report presents the results of a study that examines three issues that are key to the EU climate neutrality’s ambition:
i. The effect of EU climate neutrality on the average global atmospheric temperature by 2050 and 2100;
ii. The spatial (land and sea) requirements for wind and solar energy versus nuclear energy in the Czech Republic and The Netherlands; and,
iii. The cost of wind/solar energy and of nuclear energy for these two countries
The importance of the 456-page report is that it was prepared for two crucial political groups within the European Parliament, which is responsible for approving the legislation implementing the policies proposed by EU ministers for dealing with the environment and energy. The ECR Group is the European Conservatives and Reformists Group within the European Parliament, while Renew Europe is a liberal, pro-European political group of the European Parliament
Renew Europe states on its website: “We are the pro-European political group in the EP fighting for your freedom, civil rights while securing economic growth and jobs.” The ECR Group says on its website: “Since our foundation [sic] in 2009, we have been working hard towards an EU that gets back to basics to deliver common sense solutions. We believe that at the heart of every decision made by the EU, should be the consideration of whether, or not it is adding value for hard-working taxpayers across the union.” With this focus, the detailed study of climate policy and its economic cost should be well received. It is also important that the models and methodology of the study was peer-reviewed.
The report says the following about the study’s authors and contributors:
The authors of the study have been assisted by an interdisciplinary team of experts with academic qualifications and professional experience in a number of disciplines, including energy economics, modelling, engineering, business administration, natural sciences, climate science, and law and policy-making. Each of the key chapters has been reviewed by at least two peer reviewers with relevant academic qualifications and professional backgrounds. These peer reviewers include 2018 Nobel Laureate in Economics Professor William Nordhaus, Dr. Joeri Rogelj, Dr. Fabien Roques and many more distinguished scholars.”
In fact, there were 15 peer-reviewers, eight of whom were identified, including the three listed above. Dr. Nordhaus is acclaimed for his work integrating climate change into long-run macroeconomic analysis; Dr. Rogelj is the Director of Research and a Lecturer in Climate Change and the Environment at Imperial College; and Dr. Roques is Associate Professor, Florence School of Regulation, European University Institute. The other named peer-reviewers included Professor Samuele Furfari, a former Senior Official on Energy Policy for the European Commission; Dr. Kors Bos, a Nuclear Physicist and formerly with the Nuclear Data Group, Oak Ridge National Laboratories; Professor Gordon Hughes, former Professor of Economics, University of Edinburgh and famous for his economic analyses of offshore and onshore wind farms in the U.K. and Denmark; Dr. Richard Zijlstra, professor of Energy and Environmental Sciences at the University of Groningen; and Professor Michael Kelly, Emeritus Prince Philip Professor of Technology, University of Cambridge. The remaining unidentified peer-reviewers included an environmental and climate scholar, an energy and transition specialist, a climate researcher, an atmospheric scientist, two engineers and a chemist. At least two reviewers considered each chapter of the study and the models.
With this level of peer-reviewers, it was not surprising to see extensive models, as well as in-depth examinations of the many details about climate, energy and the operations of the power grid that are often skimmed over in other studies, if considered at all. For example, there was discussion about the fallacies of “levelized cost of energy” (LCOE) calculations for the respective power sources. Another area explored was the issues and costs of integrating various power sources into the grid, something that can significantly boost the real cost of renewable power.
The approach the report took was governed by the demands of the leading government official responsible for climate and energy policy in the EU. As the report highlighted, the EU is committed to evidence-based policymaking, including in the areas of energy and climate. The report’s authors focused on the criteria set forth by Commissioner Frans Timmermans, First Vice President of the European Commission and the Executive Vice President of the European Commission for the European Green Deal and European Commissioner for Climate Action. He has repeatedly emphasized that “facts, science, and evidence-based analysis should inform policymaking.” As a result, he always encourages that analysts “do the numbers.” In response to that demand, this report took the following position:
The authors share Commissioner Timmermans’s views on the role of evidence in policy making. The research and analysis conducted in connection with this study have therefore been based on ‘state-of-the-art’ professional standards, academic literature, prior analyses, such as those conducted for the Dutch government and electricity network operators, and other relevant, reliable information. References to sources are provided throughout this report.
Given the approach to energy policy through a climate change lens, it was not surprising the report began by assessing the carbon emissions outlook of the EU. The goal of the EU is to become carbon neutral by 2050, which would be in keeping with the recommendation of the Intergovernmental Panel on Climate Change (IPCC). As its 2018 Special Report – “Global Warming of 1.5 ºC” – pointed out:
Limiting warming to 1.5 degrees C requires dramatic emission reductions by 2030 and carbon neutrality by around 2050. This would entail unprecedented transformations of energy, land, urban, and industrial systems, including measures to achieve “negative emissions” by removing carbon from the atmosphere.
Embracing this directive, the EU is proposing to enact a Climate Law. That law requires that the energy transition to climate neutrality be “fair and cost-effective, as well as cost-efficient, and contributes to prosperity, competitiveness, energy security, energy affordability, and technological neutrality.” The problem is that the Climate Law does not spell out how those conditions will be met. The issue is complicated by the fact that after the Paris Agreement in 2015, the EU enacted a revised Renewable Energy Directive (RED-II) in December 2018. It set a new binding renewable-energy target for the EU for 2030 of at least 32%, with a clause for a possible upward revision by 2023. It also imposes an increased 14% target for the share of renewable fuels in transportation by 2030, while limiting the use of first-generation biofuels. Adding to the imperative is that the EU member states must submit a 10-year integrated national energy and climate plan for 2021-2030 demonstrating how they will meet the new 2030 targets for renewable energy and for energy-efficiency. This means the transformation of RED-II into national law by June 20, 2021. That means many policies will need to be adopted, but will they be based on in-depth analysis of their possible outcomes? If not, the EU plan may be unsuccessful in achieving its objective, and potentially create other unintended consequences.
The report contained numerous callouts that highlight policy issues that need to be considered as part of the process of adopting policies to address climate change. For example, the authors of the report state: “The concept that broad-scale impacts of physical climate change are ‘scientifically well-understood,’ but ‘specific estimates of these impacts are associated with uncertainty,’ is simply not satisfactory to the man of science.” This seems to capture the essence of “the science is settled” debate.
Likewise, the authors put forth this observation: “In climate policy-making, politicians say what they believe to be scientifically necessary and politically possible, but they do what they believe to be politically necessary and scientifically possible,” which rings true for many observers when politicians are dealing with emotional issues for their constituents but know they will not be around to suffer the backlash from the consequences of their actions if they prove ineffective, or worse, deleterious.
The authors used a chart from an EU report – “The Global Carbon Budget 2018. Get the facts.” – to highlight the lack of success in limiting carbon emissions despite their well-documented efforts. The timeline of the chart shows that climate change has been a world issue for over 40 years, but other than during periods of economic contraction, carbon emissions have not declined.
Exhibit 1. Emissions Climb Regardless Of Warnings SOURCE: Renew Europe
The view that the future does not look much different from the past was demonstrated by a forecast of carbon emissions from the MIT climate model in 2018 that shows a steady increase to 2100. However, the mix of emission sources should change as developed economies and other G 20 countries show progress in reducing their emissions. This chart highlights why the focus is so intense on what China and India plan to do to reduce their emissions.
Exhibit 2. Emissions Will Continue To Increase SOURCE: Renew Europe
The report offered the observation that “There are no assurances whatsoever that other countries will match the EU’s efforts [to cut emissions]. To the contrary, there are indications that they will not do so.” This is becoming a major concern of many countries, and likely will be heatedly debated at the U.N.’s upcoming COP26 climate conference in November in Glasgow, Scotland. The challenge at that meeting will be reconciling the multitude of uncertain climate outcomes projected by the myriad of IPCC models. Since these models have yet to demonstrate any success in replicating past climate data, skepticism about their forecasts is high.
As the authors pointed out, “The literature reveals a wide range of estimates of future emissions under nominally similar scenarios. Possible confounders include modelling methods, input data and assumptions regarding country intent.” Without a better understanding of why these models produce such widely divergent forecasts employing similar data inputs makes devising climate and energy policies more difficult. Moreover, the embrace by environmental activists of the IPCC’s worst case climate prediction and then presenting it as a mainstream and well-accepted forecast when the IPCC rates it as “highly unlikely” is disingenuous.
Exhibit 3. Climate Emission Forecasts Are All Over SOURCE: Renew Europe
Much like U.S. Energy Czar John Kerry told reporters in January, if the United States were to eliminate all its carbon emissions, there would be virtually no impact on global temperatures. The report stated: “EU 2050 climate neutrality, if achieved, will likely cause a decrease in the average global atmospheric temperature increase estimated at between 0.05 °C and 0.15 °C in 2100, and between 0.02 °C and 0.06 °C in 2050, assuming no carbon leakage occurs.” These projections should receive greater publicity, as they will shape the debate among residents of countries embarking on aggressive paths to carbon neutrality. Just how much cost and impact on their daily lives will people be willing to endure to achieve a goal with little overall impact?
Exhibit 4. Getting To Net Zero Emissions Is Impossible SOURCE: Renew Europe
A report last fall by U.S. climate scientist Roger Pielke, Jr. shows that if the world is to get to net zero carbon emissions by 2035, it will need to replace 0.1 EJ (exajoule) of fossil fuel energy every day starting now. That energy would need to be replaced with an equivalent amount of clean energy, which Professor Pielke suggests could be accomplished by building and connecting two nuclear plants or 3,000 2.5-megawatt (MW) wind turbines every single day until 2035. That is certainly not going to happen, and every day it does not, the rate of replacement increases.
The challenge confronting EU politicians is that their climate neutrality efforts, even if achieved, will have little effect on the average global temperature increase. Non-EU nations have no obligation to reduce their emissions, and the EU has no way to force them to do so. Developing nations have, and are affirming, their right to develop their economies as they see fit. These governments are focused on improving the living standards of their citizens and will not sacrifice that objective in the name of carbon emissions reduction. This reality means that the EU’s climate goals are likely not going to be achieved. So, is there a possible alternative course of action for the EU that will get everyone to a carbon neutral world?
The report offers an interesting possible plan to overcome the reluctance of developing economies to cut emissions. That plan would require the EU to purchase all the world reserves of fossil fuels and retire them indefinitely. The report estimates that at current market prices, it would take at least €109,000,000,000,000 ($128,690,000,000,000), which is approximately seven times the entire EU’s annual GDP and would equal €560,000 ($661,136) per EU household. The authors calculate that on a 30-year straight line basis, this effort would require the EU to spend approximately a quarter of its GDP on fossil fuel purchases every year, or more than 20 times the 2019 EU budget of €165 ($195) billion, starting in 2021 and extending through 2050.
Why would the EU even consider such a strategy? It would be in reconnection of the reality of its current carbon emissions strategy shortcomings, which are highlighted by a chart showing the difference between carbon emissions from consumption versus those from territorial activities. In other words, the difference between these two measures represents the manufacturing that has been exiled from the EU to other parts of the world to reduce the continent’s emissions. The continent will be challenged to keep living costs reasonable in the future if it adopts a carbon tax and a potential carbon levy on all goods entering the EU. A recent newspaper article highlighted how the steel industry in the EU will become unprofitable and will cost substantially more when it is imported, but few people understand that outcome and its long-range impact on EU economic activity and health.
Exhibit 5. Cut Emissions By Exporting Manufacturing SOURCE: Renew Europe
After demonstrating that the EU’s carbon emissions reduction target will have little impact on the global temperature increase, yet potentially inflict significant expense and lifestyle changes on its citizens, the authors explain the only policy that might achieve its goal. It would require the EU to spend its wealth on buying up and retiring the world’s fossil fuel reserves. That is not a likely or realistic scenario. But that plan highlights a concluding thought about the energy transition from the authors. A thought that barely receives consideration.
The more resources the energy transition requires, the fewer resources are left over to meet other needs. Climate change is one of many major public policy ends. So, the more efficient the climate issue is addressed, the more resources are available for other important public policies, such as health care and education.
Few politicians, especially those espousing the idea that climate change is the world’s or their country’s greatest existential threat, address the reality that there are limited sums that can be spent on climate change, while also addressing all the other public policies. Remember, in surveys asking the public to rank their most important concerns, climate change consistently ranks low on lists. That is because the public basically understands that there are higher priorities for spending tax money than climate change. It is only when the subject of climate change is raised with those being surveyed and they are asked about its importance does it rank in the top half of people’s concerns.
After addressing the climate issue, the report’s authors explored the question of how best to achieve the EU’s energy transition in a cost-effective way. With the June date rapidly approaching for EU member countries to submit their energy plans for 2021-2030, the study shifted to examining the impact of policies for two countries – The Netherlands and Czech Republic – in choosing between wind and solar or nuclear power. The Czech Republic has extensive experience with nuclear, while the Netherlands has little. Key issues considered were the space requirements and cost of the two fuels.
The authors developed a model to assess the land/space impact of wind/solar versus nuclear power. The model was run for the two countries under varying scenarios. There are significant differences between Czech Republic and The Netherlands with respect to their wind/solar and nuclear baselines and plans for further development of power infrastructure, especially the extent each country views nuclear power to be a critical element of their future power plans.
The model requires two inputs – capacity factor and density factor. The capacity factor is the megawatt-hours (MWh) of electricity generated annually as a percentage of capacity. The density factor is the megawatts (MW) of nameplate capacity per square kilometer (km2). Besides these inputs, the model takes three exogenous parameters: total county energy demand (PJ); share of energy demand served by electricity (%); and the required electricity generation mix. With this data, the model calculates the number of power plants of each technology that are needed, as well as the amount of land that must be committed to the plants. A factor not considered in the space requirement calculations was the amount of space required for the transmission and cable lines to bring wind and solar power to consumers, as these energy sources tend to be built in remote areas. Estimates are that in offshore wind farms, the cable space requirement along with bringing it to shore can be the equivalent of two-thirds of the farm’s generating space.
The model showed that for Czech Republic, the space required to generate 1,800 PJ (equivalent to the country’s current power consumption) by wind/solar would range between 14,630 and 43,758 km2 (5,649 to 16,895 square miles). This is between 19% and 55% of the country’s available land, or equal to the size of Connecticut on the low end or 1.5 times the size of Maryland at the high end. In contrast, if the power came from nuclear plants, they would require only 269 km2, or 78 square miles, of space.
To provide 3,000 PJ of power to The Netherlands from wind/solar power in 2050, the space required would range between 24,538 and 68,482 km2 (9,474 and 26,441 square miles). That is the equivalent of the combined land mass of The Netherlands’ five largest provinces at the low end, or 1.8 times the size of the country on the high end. For Americans, it is the equivalent of the size of New Hampshire or slightly larger than West Virginia. Generating the equivalent energy from nuclear power plants would require 120 km2 or 35 square miles, about half the size of Rotterdam.
While these special estimates are for the respective countries to be generating the equivalent power that each currently consumes, the analysis is consistent with what the European Commission (EC) is projecting for electricity demand and its renewable power. By 2030, the EC expects the share of renewable energy in its electricity mix to double to 55-60%, and then climb to around 84% by 2050. That means a significant investment in wind/solar in the interim. It also means thousands of wind turbines and solar panels, much of which would be eliminated with the use of nuclear power.
One issue the report focused on was the impact of declining renewable power after 2028 as facilities put in place earlier need to be replaced or are closed due to the ending of their government subsidies. There were also discussions over the cost of integrating intermittent power sources, a significant amount.
The report employed a model of synchronized lifetime power costs and various scenarios for the volume of respective power sources. The report dealt with nuclear, solar, onshore wind and offshore wind. It determined inputs for a long list of key financial factors. They included: capital costs; weighted average cost of capital (WACC); discount rate for energy production; fixed maintenance and operation costs; variable maintenance and operation costs; fuel costs; waste processing and storage costs; and decommissioning costs. The various capital and maintenance and operation costs were determined based both on actual data and expected costs in 2050. Costs that were not included were the integration and transmission costs for renewable power, which can be extensive.
Exhibit 6. Energy Model Inputs SOURCE: Renew Europe
Exhibit 7. Climate Model Outputs Favor Nuclear SOURCE: Renew Europe
What we see from Exhibit 7 (prior page) showing the costs for each scenario determined from the model employing the various input factors is that nuclear is the least costly option. We note that there are two scenarios – Kalavasta 1 and 2 – that show nuclear to be much more expensive than from the other scenarios, while the renewable energies are considerably cheaper. Kalavasta is a Dutch consultancy that has done work for the Dutch government in its various energy studies. In preparing their studies, they elected to use an outdated estimate of the cost of uranium, as well as mandating that nuclear plants should only run at 40% of capacity. They also insist on using expected (i.e., estimated for 2050) costs for capital costs and maintenance and operation costs. Virtually every renewable energy forecast assumes lower capital and operating costs for these plants. With a high fuel cost and a low output for nuclear plants and favorable future costs for renewables, it is not surprising we would see the resulting Kalavasta estimates.
The points about the Kalavasta reports, as well as the detailed discussions by the authors about validating data sources from a multitude of energy reports and forecasts, dominate pages of the report. It makes the full report challenging to read, but one is left with a feeling that the rigor employed is much greater than most other reports. In some cases, this report refused to deviate from standards of other reports, in attempting to show either the similarity or deviation from their outcomes. This adherence to other report standards came after the authors pointed out weaknesses in the other approaches. The result is the report’s conclusions are more difficult to challenge because the authors eliminated claims that they used a different methodology, which would invalidate the outcomes.
The financial impact for residents of The Netherlands and Czech Republic by relying on wind/solar power rather than nuclear is annual electricity costs that are €165 ($195) more for the former and €50 ($59) for the latter. If full system integration costs for wind/solar had been factored into the calculation, the cost gap between wind/solar and nuclear would have been wider. The cost model employed in the report shows that had the integration costs been incorporated in annual electric bills for The Netherlands, they would have been at least 18% higher.
The following are the conclusions of the report.
The EU’s 2050 climate neutrality strategy involves a high risk of policy failure. The anticipated energy transition, however, can hedge against this risk by deploying ‘no regrets’ solutions that are good investments, bring down emissions, and have little adverse impact. Nuclear power is such a solution.
With respect to both spatial requirements and costs, nuclear power offers substantial advantages over renewable power (wind, solar). These advantages have been recognized in the Czech Republic, but not (yet) by policy makers at the EU level and in The Netherlands.
With the EU member countries required to report their carbon emissions reductions plans, as well as their resulting energy policies, in the next three months, it will be interesting to see if key points from this report are incorporated. Based on the current plans, the EU’s strategy is a failure, but it is not recognized nor acknowledged. We will be watching for the debate over this report, something we fully anticipate. The report was prepared for politicians in Brussels who will have final say over the EU energy and climate change policies. If there is no debate, then the powers-to-be governing the EU are determined to undertake their failed plan despite serious economic and social consequences. We cannot believe this report will be ignored.