Business, Finance & Economics

Nuclear energy might not be on its way out in Spain after all


MADRID, Spain — Spain’s center-left governing party’s 2008 election manifesto committed to the “gradual replacement” of nuclear energy and to the “orderly closing” of the country’s nuclear plants at the end of their “useful life.”


It was a promise that sounded good to many green organizations, but also one that was called into question this year when the government decided to renew the license of the nuclear station in Santa Maria de Garona, located in the northern province of Burgos. The four-year extension to Garona's lifespan means that it will operate until 2013, past its 40-year design lifetime and two years after it was originally supposed to shut down.


And then this month, according to Spanish media, Mariano Rajoy, who leads the main opposition party, visited Garona and pledged that, if elected in 2012, he would keep the plant open even longer.


The initial decision to prolong the plant, announced in July 2009 by Prime Minister Jose Luis Rodriguez Zapatero, was labeled “a missed opportunity” by green organizations, the nuclear industry and economists, albeit for different reasons. And the ensuing debate revealed inconvenient truths about nuclear energy that may ultimately test its viability in Spain.


“Maintaining Garona open four more years is a calamity,” contended Ana Rosa Martinez, a Greenpeace spokesperson. “The plant is old, dangerous and marginal in the production of electricity,” she argued.

But Teresa Dominguez, director of Foro Nuclear, an association of Spanish nuclear industry companies, disagreed. “It’s an outrage to not extend the operation of an electrical installation that meets all safety guarantees.”

Garona started up in 1971 and is the oldest nuclear plant operating in Spain. A non-binding Nuclear Security Council report unanimously recommended the extension of its license for 10 more years, as it deemed the plant safe. The report did specify a series of safety improvements the plant owners Endesa and Iberdrola will have to implement.

Emilio Jarillo, in charge of press for energy matters at the Ministry of Industry, called the four-year extension “adequate.” He said the government needs time to implement an economic development plan for the area, to replace the jobs that will be lost when Garona no longer exists, and to build a central temporary warehouse for the storage of spent fuel before dismantling Garona.

“A capitulation to electrical companies’ interest,” said Martinez from Greenpeace. By renewing Garona’s operating license, she believes the Spanish government has wasted a chance to send the electrical companies a message that their focus should be on renewable energies. “Nuclear energy is not essential in Spain. Unlike the U.S., we have developed renewable energies to replace it. In the U.S. many nuclear plants are getting old, but they don’t have alternatives compatible with the current climate change situation. We do,” explained Martinez.

According to the International Atomic Energy Agency (IAEA), in 2008, Spain had 18 percent of its electricity coming from the eight reactors of its six nuclear plants, putting the country 18th in the world for nuclear electricity generation. France, with 76 percent share, and Lithuania, with almost 73 percent, lead the ranking. In the U.S., the share was 19.6 percent. Thirty thousand people work in the Spanish nuclear sector, according to Foro Nuclear.

A leader in wind and solar energy, Spain aims to generate 40 percent of its electricity from renewable power by 2020. Jarillo said renewable resources accounted for 24 percent of Spain’s electricity at the end of last year.

However, Foro Nuclear said, “today an electric system of any country cannot work only with renewables, for they depend on external agents and are not always available when we need them.”

Critics of nuclear energy point out that waste can remain radioactive for thousands of years, leaving a “super toxic heritage for which there’s no technical solution at present,” Martinez said.

But supporters brandish an argument of a clean legacy: nuclear energy produces no greenhouse gases. According to Foro Nuclear, the eight reactors in Spain avoid 40 million tons of CO2 a year — equivalent, they state, to the emissions of more than half of Spain’s automobiles.

The same arguments repeated by advocates and detractors all over the world make the decision over Garona highly controversial. The plant generates less than 2 percent of the electricity consumption in Spain. If not for windfall profits, the closure debate would be “almost anecdotal,” said Natalia Fabra, a professor of economics at Carlos III University and investigator at the Center for Economic Policy Research.

Backers of nuclear energy assert it is a cheap type of energy while opponents state it is expensive. There have even been warnings that closing Garona will increase consumers’ electricity bills. The reality, says Fabra, is that the Spanish consumer pays a market price for electricity, regardless of the type. “A consumer buys a kilowatt per hour, not a kilowatt per hour of nuclear energy or a kilowatt per hour of another type of energy,” explained Fabra. Closing Garona will have virtually no impact in the market price, she said.

The cost of producing energy at a nuclear plant is lower than at a coal or gas plant, yet it fetches the same market price.

“Closing Garona would be equivalent to burning that money,” said Fabra. What should change, she and other economists believe, is how the extra profits are distributed.

Nuclear plants were built in Spain under a regulatory system that guaranteed their profitability, through the electricity bill set by the Ministry of Industry. “There was no risk involved for the owners,” said Fabra. A 1997 law began liberalizing the market, but not without compensation – through the electricity bill - to buffer energy suppliers during the transition. Again, little risk for the owners.

Critics of windfall profits say it is time to even out the playing field. Suggestions include reducing rates for consumers, increasing taxes on windfall profits and investing part in electric car technologies or further development of renewable energies.

Spain’s current government stands by its aim to reduce nuclear energy stated in its election manifesto. But in his visit to Garona this month, Rajoy said that if his party wins in 2012, “all nuclear stations in Spain will remain open as long as the Nuclear Security Council considers it opportune,” according to Spanish media. The plants in Almaraz, Vandellos, Asco and Cofrentes are due for renewal before the 2012 elections.

The fate of nuclear plants in Spain will ultimately be a political decision. But if the windfall profits argument gains enough traction to change the modus operandi, nuclear energy might not be such a deal for electric companies.