The Value-added of nuclear energy versus natural gas

Both nuclear energy and gas have been identified as green and relatively clean energy transition tools.

However, given the contested nature of both tools and the debates on which tool is more suitable to form a safety net during the transition processes in the EU, establishing the objective ‘cleanness’ of each will aid in understanding which one is more environmentally supportive and thus, more in line with the EU objectives of 2050. Henceforth, in order to analyze the comparative ‘cleanness’ of nuclear energy versus natural gas, the operationalization of ‘cleanness’ as described in chapter 1 of this research is employed. Particularly, the evaluation reviews the energy efficiency in terms of ‘Energy Returned on Energy Invested’ (EROEI), the total CO² emissions involved in the power generation, the capacity factors and the waste created as a by-product of using nuclear energy and gas.

Firstly, the EROEI summarizes the overall life-cycle efficiency of a power supply, by calculating the ratio of usable energy through the energy intensity and energy payback values of particular power plants (Weisbach, Ruprecht, Huke, Czerski, Gottlieb and Hussein 2013: 1-3). For gas-fired power plants, both extraction and refining of the natural gas are included in the energy calculation, as well as the energy needed for the building, decommissioning, and the maintenance of the power plants. The final EROEI value is 28 (idem: 12). On the other hand, nuclear power’s overall energy demand is mostly dominated by the need to extract Uranium and the involved enrichment processes. The analysis of the overall energy demand however also considers current trends, where the Uranium enrichment processes are being adjusted to the gas centrifuge technique and the increasing demands for the Uranium extraction (idem: 20). Ultimately, the nuclear energy output is at 2,315,000 TJ and an EROEI value of 75 (idem: 21). Since the higher, the EROEI number is, the cheaper and easier is to get the energy from the particular energy source, these results show that nuclear energy and the related processes of Uranium extraction and enrichment are better at powering the society. For natural gas, the outcome of this data is that energy investments are less well used and ultimately, they provide suggestions on how to better optimize the extraction and refining processes. Nonetheless, although nuclear energy succeeds in the EROEI analysis, it is crucial to note, that neither economic fluctuations nor political influences and factors are included in the evaluation.

Secondly, regarding the capacity factors, they measure the overall generation of a power plant, compared to the maximum amount it could generate without any interruption (Pedraza 2019). Through the analysis of the processes and the maintenance and operating lives of nuclear versus gas power plants, it was shown that nuclear energy has a capacity factor of 92.5%, while natural gas has ‘only’ 56.6%. This means that nuclear energy in comparison to natural gas produces maximum power, which is around 1.5 times more than natural gas (Office of Nuclear Energy 2021). Ultimately, this signifies that in order to reproduce through gas plants the same amount of electricity that a nuclear reactor produces, it would be needed to have 1.5 times more gas plants involved (EIA 2021). This finding then translates back to the EROEI and points to the fact that gas’

‘cleanness’ may be lower as in order to produce the same amount of energy as nuclear, more energy investment will be needed to obtain the sufficient amounts of gas, through extraction and refining.

Thirdly, as for the total CO² emissions involved in the power generation by gas power plants versus nuclear reactors, fossil fuels, in particular, may be found detrimental, as CO² emissions are one of the byproducts of their power generation. It has been shown that around 21% of energy-related CO² emissions are from burning gas for power generation (World Nuclear Association 2021). As for nuclear fission, it does not directly produce any CO² in its power generation. Nonetheless, like all electricity generation technologies, nuclear energy produces greenhouse gases at least indirectly, for example through the construction of the plants (ibid). Figure 3.2 shows the gCO² equivalent per kWh for all power sources, with natural gas positioned among the highest 3 emitters, while nuclear energy is standing alongside the CO² emissions rates of RES, like wind energy.

Figure 3.2 - Average life-cycle CO² equivalent emissions

Source: IPCC 2021

Finally, regarding the waste of nuclear energy and gas production, nuclear fuel produces radioactive waste, while natural gas emits methane leaks during extraction and transport. The waste management of the radioactive material, like the tools, clothing, and other materials that come into contact with radioactive dust, is crucial in ensuring that no other objects are contaminated (Rutledge et al. 2022). While countries store the extremely radioactive used fuels and rods of nuclear poison in special underwater containers or dry storage tanks (ibid), the possibility of contamination justifies the anti-nuclear sentiments. On the other hand, the extraction and transport of natural gas create a potential for methane leaks. As the IEA estimates, around

70Mt of methane have been emitted in 2020 – which is over 5% of global greenhouse gas emissions related to energy (IEA 2022). The methane leaks in the production of natural gas are more common than nuclear waste contamination, however, with the right infrastructure management, these leaks can be further reduced.

Similarly, with the right nuclear waste management, nuclear energy waste should not pose environmentally degradative impacts. However, if not stored properly the effects of nuclear waste on the environment would certainly overshadow natural gas methane leaks. Therefore, this section shows that in the first three categories, nuclear energy is more energy-efficient and CO2 friendly than natural gas and thus ‘cleaner’. On the other hand, the management of waste questions the ‘cleanness’ of nuclear energy. Therefore, crucial to note is that while nuclear energy showed as ‘cleaner’ in some aspects, its controversial nature and the greatly perceived risks connected to the functioning – and failure, of the nuclear power plants and the radioactive waste may diminish its value-added in this aspect. Chapter 4 will further develop the analysis of waste management and show that it is one of the key challenges to employing nuclear energy in the transition process.

Turning to the second aspect of the value-added, the costs of nuclear energy and gas are considered. In order to position nuclear energy and gas side by side and make them comparable in terms of their costs, while maintaining the scope of this thesis, the proceeding analysis juxtaposes the Levelized cost of electricity generation (LCOE) for each. The LCOE used for this research is based on the report produced by the International Energy (IEA) and the OECD Nuclear Energy Agency (NEA) with data for 243 in 24 countries.

Although the object of study is the EU, France, and Germany, given the scope of this research, the provided data will display the cost value-added between natural gas and nuclear energy in general terms. The LCOE of natural gas for the combined cycle gas turbine plants and carbon capture storage has been calculated at a minimum $70/MWh and a maximum of $112/MWh. For nuclear energy, the LCOE has been identified at a minimum of $42/MWh and a maximum $102/MWh (IEA 2020). To include also the costs of uranium imports for the functioning of nuclear energy, the uranium prices indices based on deliveries and enriching in 2020 have shown an average of 71.37/kgU (Euratom 2020). In 2020 the total imported natural uranium was 12592 tonnes (Statista 2020). After conversion to kilograms (12592000 kg), the average price for uranium in 2020 in the EU was around €898.7 million. Comparing this with the estimated price of gas imports to the EU only in the second half of 2020, the price of natural gas imports was €6.2 billion (Market Observatory for Energy 2020).

The simple analysis of costs related to LCOE, and Uranium versus gas imports to the EU, clearly shows, that nuclear energy is a cheaper energy source. However, important to note, is that this analysis did not include project costs - including materials, components, manpower, and capital needed for the construction and the costs related to management and operation, like staffing, consumables, and routine maintenance; which play a significant role in the total costs of nuclear power plants. Nonetheless, considering that Germany already had existing and operating power plants, the costs of nuclear energy were significantly lower and thus it had higher value-added than natural gas. Paired with the costs incurred after the decision to phase-out nuclear energy, through the compensation to the main energy providers, it is curious that the German government prioritized anti-nuclear sentiments over financial soundness.

Finally, turning to the third component of the value-added comparison between nuclear energy and natural gas, security, is measured through the analysis of 1) the energy security of the energy supply and 2) the security from external risks. In relation to energy security, where an uninterrupted availability of sources is presented at an affordable price, both nuclear energy and natural gas rely on both their generation sources and also on the import of these resources. Nuclear energy is well known for its reliable energy generation, which can continuously feed into the power system and provide stability. As highlighted in the ‘cleanness’ section, the high-capacity factor of nuclear energy means that only little fuel is needed for the generation of energy (iEnergy 2018). Namely, this means that Uranium which is the fuel of nuclear power plants needs to be added only every 18 to 24 months and can be simultaneously stored for years (ibid). On the other hand, natural gas security of supply energy is limited with the lower storage capacities. Natural gas can be stored only for a few months underground (World Nuclear 2022). Additionally, gas supply disruptions are always exposed to risks created by technical or human errors, natural disasters – or geopolitical disputes (IEA 2019). Nuclear energy faces risks in terms of the inability of transport companies to deliver or receive nuclear material shipments and the reduction in uranium explorations and mining (ESA 2020). Nonetheless, in light of the long period that nuclear power plants can go without adding Uranium fuel, sudden interruptions in supply can likely be resolved before the next fueling is needed.

Secondly, security from external risks understood as the country’s dependence on third countries shows import dependencies for both nuclear energy and natural gas. Nuclear energy, with France as an example, depends on the import of uranium from abroad. Currently, all of France’s uranium is imported – with the

main shares coming from Kazakhstan, Australia, Niger, and Uzbekistan (rfi 2022). Instead of energy independence, nuclear energy offers energy inter-dependence, where it still has power over the diversification of supplies from various countries. However, even though only small amounts of uranium are needed per 18-24 months, and they can be stored for the long term, the dangers are related to fluctuating prices and increasing competition for the resources from China and Canada (ibid).

Natural gas is significantly more vulnerable to external risks and dependencies on other countries. As the case of the EU, Germany and Russia shows, gas supply can be protected through long-term gas supply contracts, stable relationships and the diversification of supplies. Germany relies on Russia for 55% of its natural gas imports and as the following chapter will examine, a geopolitical conflict can easily present a threat to the energy security of a country. The EU has created a framework for security of gas supply based on information exchange, regional cooperation and long-term contracts to address these risks (European commission 2020).

Chapter 4 will delve in detail into this energy dependence and what it means for the German energy transition.

Ultimately, since nuclear energy is in the aspects described above more energy secure than natural gas, the Russian-Ukraine war may make Germany rethink its anti-nuclear strategy and the role of natural gas.