By Pietro Lombardi
MADRID (Reuters) – The future of Spain’s nuclear power industry hinges on next month’s election, with the opposition party that now leads the polls campaigning to extend the use of the plants that the government wants to start closing from 2027.
The debate, which comes as the country faces a sweltering summer blamed on climate change, reflects competing views between the conservative opposition People’s Party (PP) and ruling Socialist Party about how to decarbonise the economy.
Sticking with nuclear requires investment in aging power plants, but offers the assurance of stable power and could improve ties with nuclear-reliant France next door.
A swifter shift to solar and wind meanwhile offers cheaper generation, but may demand a grid overhaul to cope with more intermittent supplies.
“It will be a policy of my government to reverse the planned decommissioning and extend the life of our nuclear power plants,” PP leader Alberto Nunez Feijoo said on Monday in Barcelona.
Spain’s nuclear plants generate about a fifth of the country’s electricity.
“We cannot unplug 21% of the energy installed in Spain without having another 21% capable of running with renewable energy,” Feijoo said, adding that in such scenario “the price of energy will rise exponentially”.
Meanwhile the Socialists have been one of the main champions in Europe of a harder, faster transition to a zero-carbon economy, preferring renewable energy such as solar and wind.
With abundant sun and wind, as well as vast swathes of empty land, Spain holds all the cards to be a European leader in renewables, and some energy experts see a nuclear U-turn being at odds with the expected growth of those energy sources.
Jorge Morales de Labra, head of energy firm Proxima Energia, said keeping the reactors on would “discourage investment in renewables”.
Nonetheless, members of Feijoo’s team have already held talks with the sector, a source familiar with the talks told Reuters.
“A PP government is more likely to favour a softer landing which includes the use of nuclear and a bigger role for low-carbon technologies such as biofuels,” Ana Barillas of Aurora Energy Research said.
“But an evaluation of costs for these technologies is likely to be a key consideration.”
BILLIONS OF EUROS
Experts and industry players put the price tag for keeping nuclear plants running in the billions of euros.
“From a technical point of view, Spain’s nuclear plants can keep working for decades,” Ignacio Araluce, president of lobby group Foro Nuclear, said. “But they have to be profitable.”
He estimates that investments of at least 4 billion euros ($4.36 billion) would be needed over two decades just to keep the plants running.
He also called on policymakers to ease the tax burden, which accounts for around 40% of some 60 euros it costs to produce a megawatt hour of nuclear power, to ensure sustainability and competitiveness of the business.
Maria del Mar Rubio Varas, energy economist at Navarra Public University, who supports an extension, said nuclear could hardly compete with renewables in terms of price due to its high costs, but “it can compete on stability and the big amount of electricity it can provide all the time”.
One prudent option would be for any future government to keep operating just a couple of the newest plants, she said.
With the first plant set to close in 2027, a decision has to be taken by mid-2024 at the latest, Araluce said.
In addition to costs, there are political considerations to take into account. A nuclear policy shift would have broader implications in Europe, with Spain joining a chorus led by France for the EU to give nuclear energy a better treatment under its zero-carbon transition plan.
It may also ease tensions over a hydrogen pipeline project linking Spain and France, Barillas said.
Araluce said he sees “room for everyone” under Spain’s ambition to become a green energy powerhouse.
In a wider energy sector, a conservative government will likely look more favourably at low-carbon technologies like biofuels, which have sparked significant interest from foreign investors in Spain and calls from companies for Madrid to step up its ambitions.
“Spain has tremendous potential in terms of biomethane production,” Loreto Ordonez, CEO of Engie Espana, said at a recent energy event, adding that the plan deployed by the government “falls short” and “there is a very important margin for improvement”.
($1 = 0.9181 euros)
(Reporting by Pietro Lombardi; Additional reporting by Belén Carreño; Writing by Charlie Devereux; Editing by Andrei Khalip and Jan Harvey)
