Nuclear qualified as “green” energy, potential key for autonomy and European energy transition
Now that nuclear is on the list of investments that can be called ‘green’, it is vital for investors to act quickly and support nuclear projects within the EU to ensure energy security, writes Timur Tillyaev.
Timur Tillyaev is an International investor in renewable energy.
Earlier this month, the European Parliament took the historic decision to label investments in nuclear energy as green, marking a major step forward for energy transition and security in the EU.
The vote means that nuclear energy will be added, from 2023, to the European Union’s (EU) taxonomy for sustainable activities, which is a set of rules used to define what can be considered a sustainable investment.
So why is it so important? In short, it provides access for the green atomic energy sector to the more than $8 trillion sustainable investment market. Provided that the projects meet the criteria defined by the green taxonomy.
Additionally, it removes uncertainty for investors worried about potential tax and regulatory changes for non-green energy sources.
The opportunities for the industry are immediate. Companies can now start preparing to raise funds using green bonds, a market that has rapidly gained ground in recent years.
In 2021, just over $500 billion of green bonds were issued. The potential capital injection is expected to pave the way for innovations in the industry, helping countries produce safer, more efficient, more affordable and larger-scale nuclear power.
This will allow the EU to be less dependent on fossil fuels, and above all, on Russian gas.
EDF, which is in financial difficulty, is already preparing to issue green bonds to finance nearly 8 billion euros in nuclear expenditure. France also plans to build 14 new nuclear power plants by 2050 to achieve carbon neutrality.
France has long been Europe’s spearhead in terms of nuclear energy. Usually, 60 to 70% of the country’s electricity comes from nuclear power. In comparison, only 12% of Germany’s energy production came from nuclear in 2021.
It would seem that other European countries are ready to follow the French model. Belgium is currently working to develop the operations of two nuclear reactors. Poland plans to build six nuclear reactors by 2040 to reduce its dependence on coal.
Driven by the current gas crisis, Germany too is considering extending the life cycle of the country’s three remaining reactors.
Across the EU, nuclear has become an integral part of conservations on the energy transition. Earlier this month, in a joint editorial, several European energy ministers singled out nuclear energy as a “realistic strategy” to ensure Europe’s energy security and reduce carbon dioxide emissions.
Even long-time opponents are changing their minds. Among them is the Finnish Ecological Party. In May, the party made the historic decision to endorse nuclear power in its manifesto.
“We need to make sure we effectively reduce fossil fuels as quickly as possible. To meet this challenge, we need all sustainable means: wind, solar and nuclear.”said Finnish Green parliamentarian Atte Harjanne.
Calling nuclear green is the clearest indication of this growing consensus on the question of nuclear energy in the EU.
There are still critics, including those who are right to point out that nuclear power plants take years to build and are therefore not long-term investments, given the urgent nature of the climate crisis.
It is true that the nuclear industry could do more to deliver projects more quickly and without stretching budgets. However, with the right investment, it is possible.
Research suggests that innovations in nuclear technology should be able to drastically reduce the cost and time of building new reactors.
Nonetheless, NextGen ESG’s Chief Investment Officer, Sasja Beslik raised some concerns, arguing that the new green designation could divert funding from renewable energy resources to nuclear projects.
Greater investments should be devoted to both forms of energy. However, it is certain that in order to combat climate change we must move away from fossil fuels as soon as possible and that this can only be done through flexible and significant investment in all energy sources that can help countries become carbon neutral.
Nuclear power, which is one of the cleanest energy resources available on the planet, has an important role to play in this transition.
The European Parliament has opened the door for investors to that they become aware of the potential of nuclear energy in the fight against the climate crisis and energy insecurity. It is now up to sustainable energy investors to make this change.
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