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As European Nuclear Power Stalls, Renewable Projects Accelerate

Nuclear power in Europe has slowed appreciably, even stalled, in the aftermath of the crisis at the Fukushima Daiichi nuclear plant that began March 11. While the European Power market is conducting a safety assessment of nuclear power, many European Union (E.U.) countries are accelerating their pursuit of renewable energy, according to Nicola Lynch, president of Industrial Info Europe.

"The Fukushima Daiichi situation has had a very dramatic affect on the European nuclear power market," Lynch said in an exclusive "Navigating the Currents of Change" interview. "It's been 25 years since the Chernobyl disaster, and it's only been in the last 18 to 24 months that a lot of European countries had put nuclear back on the map. Countries like the United Kingdom, Germany, Poland, Italy, Sweden, the Netherlands and Finland all have nuclear projects in different stages of planning. Many had to change their legislation or constitutions before they could even consider building a new nuclear power plant. Most countries had just gotten to that point" when a massive earthquake and tsunami triggered a partial meltdown of several units at Japan's Fukushima Daiichi nuclear station earlier this year.

In the immediate aftermath of that event, the E.U. ordered stress tests for each operating reactor in Europe. Those tests, scheduled to wrap up over the next few weeks, have frozen new-build nuclear projects.

"Many countries are re-evaluating their nuclear strategy going forward," Lynch observed. "Germany immediately closed seven of its older plants for three months, which took about 8,500 megawatts (MW) of generating capacity offline, though that capacity was replaced by other sources. Although the closure is supposed to be for only three months, many believe that these nuclear plants will never come back online. In fact, a report commissioned by German Chancellor Angela Merkel has suggested phasing out all nuclear in Germany over the next 10 years, which would bring wide-ranging changes to their power landscape."

While no other European country has moved as abruptly as Germany, Lynch said of other E.U. countries: "they have very much scaled back their attitude on nuclear power. Most are awaiting the release of the stress-test results, hopefully this summer. In Italy, the government will leave the fate of that country's first nuclear plant in the hands of the people via a referendum."

Facing aggressive greenhouse gas (GHG) reduction goals and growing uncertainty about new-build nuclear power, E.U. nations have little choice but to further accelerate their already rapid pursuit of renewable energy. "A total of 11 new nuclear plants are in some stage of development in the U.K. alone," Lynch noted. "But with this stall in nuclear, I think the push for renewable will get even greater. Nuclear might not disappear off the map entirely, but some countries are re-evaluating if that's where they want to go. The vision from several years back, of nuclear alongside renewable, is probably going to have to be rethought a little bit."

Continued rapid growth in the offshore windpower market could help ease any future power shortfalls caused by the current stall in nuclear power. "The European offshore wind market doubled between 2009 and 2010," Lynch said in the "Navigating the Currents of Change" interview. In 2010, 883 MW of new offshore wind generation was built at nine windfarms across five countries, at a cost of €2.6 billion ($3.7 billion). Further development of this resource is likely in the coming years, she said.

Lynch noted that France recently launched an aggressive wind energy strategy that envisions 10 offshore windfarms with combined generating capacity of about 6,000 MW. That nation has allocated €10 billion ($14.25 billion) to build the first five offshore windfarms, which are expected have a total generating capacity of 3,000 MW. By 2020, France hopes to add 25,000 MW of wind power--19,000 MW of onshore and 6,000 MW of offshore. For more information, see the May 19, 2011, article - French Government to Launch Tenders for Offshore Wind Projects.

"While the U.K. is leading the offshore wind energy race, other countries, such as Denmark, the Netherlands, Belgium, Sweden and Germany, are following closely behind," said Lynch.

She also sees a growing portion of the E.U.'s electricity being generated by biomass: "Biomass is growing extraordinarily fast in Europe. Biomass projects are a priority in the U.K. and Ireland, where they are an integral part of strategies to meet their GHG reduction targets by 2020." For more on this issue, see May 19, 2011, article - U.K. Promises 50% Cut in CO2 Emissions by 2027. Industrial Info currently is tracking more than 200 active European biomass projects, with a combined total investment value (TIV) of $32 billion. More than 100 of these biomass projects are scheduled to kick off in the next 12 months, Lynch said.

Lynch added that coal-fired power plants in Europe "won an important stay of execution" last year when the E.U. passed an Industrial Emissions Directive (IED) that provides more time and flexibility to owners of large coal-fired plants to either shut down or install environmental retrofit equipment to reduce emissions. For more on the directive, see July 13, 2010 article - Europe Extends Life of Fossil-fuel Power Plants.

The coal plants that are being developed or constructed now are far more efficient than the existing coal-fired fleet, the Industrial Info Europe president said. The use of subcritical coal plants is expected to decline sharply in the next 25 years in favor of more efficient plants. IIR is tracking 21 grassroot coal-fired power projects and an additional 35 additions to existing coal-fired plants in Europe. "There's definitely movement in coal, and the extra life they've been given by the IED will be very beneficial."

The volatility in today's European Power markets increases the value of IIR's databases and analytic tools for power developers, equipment suppliers, financiers and utilities. These databases and tools will be exhibited at the upcoming Power-Gen Europe trade show, June 7-9, in Milan, Italy. IIR will be exhibiting at Booth 4C20. Lynch and other members of IIR's power team will be happy to show attendees how IIR's tools can help them remain abreast of news and project spending decisions in the large and dynamic European renewable power market.

Click here to hear this and other "Navigating the Currents of Change" webcasts, covering industrial trends and projects throughout the world.

Industrial Info Resources (IIR), with world headquarters in Sugar Land, Texas, and eight additional worldwide research and sales offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.