A Conference Discussion Paper for The Future of Nuclear Energy in A Carbon Constrained World, November 5th 2007, New York. Mr. Carroll is an independent consultant on policy, legal and technical issues on a range of environmental, energy and maritime subjects. Froggatt is a European energy policy consultant.
Nov 05, 2007
AUTHOR: Simon Carroll and Antony Froggatt
Nuclear Third Party Insurance-The Nuclear Sectors Silent Subsidy State…. (PDF) 735.88 KB
Nuclear Third Party Insurance
The Nuclear Sector’s “Silent” Subsidy State of Play and Opportunities in Europe
There are divergent and seriously inadequate nuclear liability and compensation arrangements currently in place across the various EU Member States. This has serious negative implications for reactor safety, fails to ensure compensation of damage in the event of an accident, and creates distortion of competition in the EU electricity market.
There is a need to introduce new liability and compensation arrangements that reflect the actual potential costs of nuclear accidents, that would fully compensate damage caused in the event of a nuclear accident, and which would eliminate this significant subsidy to nuclear electricity generation. Yet attempts to increase the minimum compensation required by international nuclear liability treaties by even a relatively modest amount, have been resisted by some Member States with nuclear power plants. Recently, however, the European Commission has recognised the need to address the disparities and incongruities in nuclear third party liability currently existing in the EU. In this context, there is currently a real opportunity to develop and implement a fairer more efficient and effective nuclear liability and compensation scheme to the benefit of all.
Overview of nuclear power in the European Union
Within the European Union (EU) nuclear power is a divisive issue on a public and political level. Of the 27 Member States 15 have nuclear power, with a total of 145 nuclear reactors providing 30% of the Union’s electricity. France has by far the largest nuclear fleet operating with 45% of the EU’s total capacity.
Since the Chernobyl accident in 1986 there has been a downturn in the fortunes of the nuclear industry and the absolute number of reactors in operation is expected to decline from 172 reactors in 1987 down to 135 reactors by 2010, in 2006 eight reactors were shut. However there is renewed interest in nuclear power and reactors are under-construction in Bulgaria (Belene), Finland (Olkiluto 3) and France (Flamanville 3), the first new reactors orders in a Member State for over a decade.
Proposals are being developed in a number of countries in the EU to order new nuclear power plants. This includes a proposal for a reactor in Lithuania that would be jointly owned by Estonia, Latvia and Poland. The proposals in other new Member States (Romania and Slovakia) also involve considerable co-operation with international utilities or constructors. In the UK the Government has stated its desire to see the continual use of nuclear but says the decision rests with the utilities. A number of Vendors (Areva and AECL) have submitted designs for approval. In some countries there are no plans to build new reactors, although the existing reactors are being subject to plant life extensions, which simultaneously expands the output from each unit and prepares to extend their operating lives.
A number of countries have politically agreed phase out plans. The most active is in Germany, where a number of reactors have been closed, as have reactors in Sweden. Although in the later the original timetable for closure has slipped significantly. In Belgium an agreement to limit the operating life of the reactors to 40 years and to build no more nuclear power station was reached in January 2003.
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