A debate broke out among institutional investors in Germany last week over whether nuclear should be back on the agenda as part of energy-transition strategies.
Two months after the European Parliament voted against excluding nuclear and gas from the EU Taxonomy for sustainable activities, speakers and delegates at the in Munich addressed the question head on.
Sama Bilbao y Le贸n, director general of the World Nuclear Association, sought to correct what she said were misconceptions about the energy source.
鈥淚t is not a very well-known fact that in OECD countries and in Europe, in particular, nuclear energy today 鈥� and for several decades 鈥� has been the largest source of low-carbon electricity,鈥� she said.
Bilbao y Le贸n faced probing questions from the audience, including those relating to the experience of the Fukushima nuclear disaster in Japan and whether the potential costs of accidents are factored into investments.
鈥淣uclear energy is the safest form of energy production,鈥� she said. 鈥淚f you look at the fatalities, if you look at the environmental impacts of the use of nuclear energy, at a global level it is the safest.鈥�
But support for nuclear did not only come from the industry鈥檚 trade body. Investors more associated with renewable energy recognised that a range of solutions needed to be considered if Europe was to transition to a net-zero economy.
鈥淣uclear energy is actually being classified as a clean energy source, so from our perspective, as energy market specialists, we actually see that as a great addition,鈥� said Karin Kaiser, head of private markets for Europe at Greencoat Capital, a renewables fund managed acquired by Schroders Capital last year.
The openness to considering nuclear varied among investors, she said, with 鈥渟ome who like the proposition鈥� and others preferring to back the development of hydrogen technology. 鈥淏ut the truth also is that we don鈥檛 know when hydrogen will be ready to actually take that role and complement renewables in the energy mix.鈥�
Lawrence Slade, CEO of the Global Infrastructure Investor Association (GIIA), said: 鈥淭he response I get when we talk about nuclear is there is an interest in it鈥� but from an industry perspective there are still very big questions over how it fits into an ESG portfolio.
鈥淥ne of the things certainly the big pension funds are getting is a lot of pressure from their stakeholders in terms of where they鈥檙e investing, and so there are still some big hurdles to be got over.鈥�
Slade, whose organisation won Outstanding Industry Contribution at the 91传媒在线 & Infrastructure Global Investor Awards, said there was 鈥減otential attractiveness鈥� in nuclear energy in the form of the new generation of small modular reactors (SMRs), which will be able to provide power closer to where it is being used.
Speaking from the audience, international pensions adviser Peter Kraneveld asked how advanced the technology behind SMRs was. 鈥淚s it being implemented? Is it just a research project?鈥�
Bilbao y Le贸n said: 鈥淣one of this is research. This is our reality. The technology is well known, and it鈥檚 being deployed as we speak.鈥�
She added: 鈥淭he business model is different. It is not a project, it is a product. Essentially, you can manufacture these reactors in a factory, you can put them in the back of a truck and bring them to the site of deployment and just put them in and start operating them. So, we are talking about a much faster deployment.鈥�
Graham Matthews, infrastructure CEO at , which invests in renewables and recently acquired an 80% stake in Italian bio-liquified natural gas producer Biomet, said: 鈥淭he idea of smaller-scale distributed nuclear I actually think is really interesting.鈥�
Matthews said if there was to be a solution to 鈥渕aterially increasing energy supply鈥� over the next three, five or seven years, 鈥渋t has to be in relation to distributed energy, because big power plants just take too long to build鈥�.
He said: 鈥淭hat鈥檚 important in the short term, but it鈥檚 also necessary for the long term. Historically, energy markets were built around the idea that you build a big generation plant and then you connect the electrons to people over long distances.
鈥淏ut the network of the future doesn鈥檛 look like that at all. It鈥檚 a much more distributed network, where it鈥檚 not just a one-way flow of electrons 鈥� it鈥檚 a two-way flow where you have we have more smaller generation units closer to people, you have distributed storage in the network to improve resilience and everything鈥檚 more distributed.
鈥淪o with that long-term, necessary goal in mind, I think that means that in the short term we really need to focus on building a large number of smaller-generation units that are closer to population, closer to demand. Renewables is part of that鈥� but it鈥檚 much more than that.鈥�
