EDF calls for policy 'visibility' in the transition to clean energy

08 October 2019

Energy investments have never been as dependent upon decisions taken by nations as they are now, Cedric Lewandowski, senior executive vice president in charge of the nuclear fleet at EDF Group, said today. Public policies must quickly deliver the "visibility" required for nuclear energy to play its part in protecting the climate and promoting economic and industrial growth, he told delegates at the International Atomic Energy Agency's International Conference on Climate Change and the Role of Nuclear Power.

Cedric Lewandowski (Image: EDF)

Citing the International Energy Agency (IEA), Lewandowski said 85% of energy sector investments are currently directly or indirectly dependent on the state. In the electricity sector it is 95%, even though half of the world’s electricity is generated in markets open to competition, he added.

Three ways to be visible

On planning, he said long-term visibility is improved when energy policy objectives are prioritised and clearly identified for the climate, economy, and security of supply.

"All too often, targets focus on means - this or that technology, for instance - rather than actual end-goals. This is one source of the harmful ‘stop-and-go’ patterns in regulation," he said.

Costs come down when there is "industrial continuity", he said, "when first-rate expertise is maintained within the industrial ecosystem, and when series effects and standardisation kick in to lower costs. This is crucial for nuclear power. This is actually crucial for all of the technologies we will need for energy transition."

On incentivising, he said the first task is to guarantee adequate investment.

"Greater magnitudes of uncertainty lead to volatility," he said, "and for a capital-intensive sector like ours, this means less investment and more risk to security of supply. This is especially true in power markets that are open to competition: their market design must be adaptive, and long-term contracts used for all types of generation."

There must also be incentives for extending the service life of existing nuclear plants, he said. "As the recent IEA report on nuclear clearly showed, keeping existing plants in service is vital to climate protection, as well as the most competitive way to produce electricity that is carbon-free, dispatchable and, as demonstrated in France, flexible. Now is the time to create a regulatory framework within these countries that ensures proper remuneration of existing nuclear over the longer term. This means a framework that guarantees adequate remuneration for capital previously invested, as well as for the continued safe operation of existing plants."

Effective signals must be provided for investment in new nuclear, he said, adding that these signals must limit the cost of capital by design, through intelligently sharing risk between operators, builders, suppliers, consumers and the state.

"This can make a huge difference for capital-intensive projects like nuclear power plants," he said. "We can, and must, innovate in terms of contract engineering to ensure that all major industrial projects, including new nuclear, are of benefit to our overall energy and climate policies," he said.

On support, he said that, if energy transition leads to a "greater inequality of benefit", it will eventually be rejected by citizens, as illustrated in the Yellow Vest movement in France.

One means to avoid this is a constant focus on minimising costs, he said. "We cannot devote hundreds of dollars per tonne of CO2 to what might be obtained for a few tens of dollars. This is the primary guarantee of fairness. It is then equally important to identify which populations are most affected by transition, and provide support to the most vulnerable among them."

Acceptance of the energy transition will depend on the “concrete benefits” for citizens in terms of growth and jobs, he said, adding that the ability to develop and maintain local industries will be essential. "Anywhere future technologies are developed and produced becomes an opportunity for future economic growth and jobs," he said. "Nuclear power is a driving force for industrial development and the creation of skilled jobs."

Industry's role

Industry players must "do their share, with the public good in mind", he said, adding, "We must continue to drive innovation, improve technological performance, and lower related costs."

They have a role in ensuring the success of nuclear, he said, through firstly choosing an adapted design that meets the highest safety standards; secondly adopting an industrial organisation that optimises construction projects and keeps lead times in check; thirdly maintaining and developing skills across the entire value chain; fourthly innovating and conducting R&D to improve performance and prepare the reactors of the future, such as small modular reactors (SMRs).

"We must pay more attention to evolving consumer expectations, and to their desire to be treated more like stakeholders," he said. "This is the only way we will continue to earn our ‘licence to operate’. It is time for us to bolster our corporate social responsibility and expand our focus on shareholder value to include stakeholder value."

Nuclear is collaborative

Lewandowski quoted the late Jacques Chirac, the former French president who died on 26 September. Chirac had declared at the Johannesburg Summit on Sustainable Development in 2002: "Notre maison brule et nous regardons ailleurs" - "Our house is burning down and we’re blind to it."

Rising to the challenge of climate change requires greater international cooperation, Lewandowski said.

"Nuclear can and should lead the way. It is a source of sovereignty. It is inherently collaborative," he said, highlighting the IAEA and the World Association of Nuclear Operators as key institutions in that regard.

International cooperation on norms and technical and safety standards is more important than ever for the future of nuclear, he added. "It is the way forward if we are to continue to innovate, notably with SMRs, and to attract the best talent."

It is obvious, he said, that the world is lagging behind in the fight against climate change.

"In 1987, when the Rio Earth Summit was held and the Brundtland Report published, fossil fuels made up 81% of the global energy mix. Thirty years later, in 2017, after Kyoto, after the Paris COP, after all the work done to promote energy efficiency and a renewable revolution led by wind and solar power, fossil fuels still made up 81% of the mix," he said.

"This shows just how complex it can be to reduce carbon emissions, especially for emerging countries faced with meeting the dual challenges of energy access and economic development. It is also a reminder that in order to tackle climate change, we must make use of carbon-free technologies in concert rather than substituting one for another. The renewable energies rolled out thus far have merely served to offset the decline in nuclear’s share of the mix."

There is a clear choice: either every new dollar invested in energy is used towards decarbonised sources, or the world must offset investment in fossil fuels with major emission reductions. "If this is indeed the case, we cannot currently afford the exclusion of any carbon-free technologies," he said.

He added: "It has become increasingly clear - and widely documented - that we cannot win the climate change fight without nuclear power. This simple statement may be an 'inconvenient truth' to some, but becomes more evident to others with every passing day."

Citing a recent World Bank report, he said the biggest decrease in emissions was achieved during the 1980s in France - directly attributable to the country's nuclear electricity programme. "We must ramp up every effort that allows nuclear to make its full contribution - and do so without further delay."

Researched and written by World Nuclear News