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    The Pros and Cons of Nuclear Power

    Stockholm (NordSIP) – The role of nuclear energy in the energy transition remains mired by controversy. In Europe, the issue remains politically charged and continues to attract attention in the context of the EU’s categorisation of green industries – the Taxonomy.

    At the end 2020, the European Fund and Asset  Management Association  (EFAMA)  noted  that “nuclear  energy  is  not  listed  amongst  Taxonomy-eligible activities despite its important contribution to decarbonisation of the energy mix in certain EU Member States  and, increasingly  so,  in industrialising G20 countries.” Partially in response to these concerns, the European Commission launched consultations on the part of the green taxonomy concerning gas and nuclear activities n the very first day of 2022. The proposal was met with concern by sustainable asset managers.

    In a March  2020  Taxonomy report, the Technical  Expert  Group  (TEG)  on  Sustainable Finance advising the European Commission on the green transition, argued that “the evidence about nuclear energy is complex and more difficult to evaluate in a  taxonomy context. (…) Evidence often addresses different aspects of the risks and management practices associated with nuclear energy. (…) Despite this evidence, there are still empirical data gaps on key DNSH issues,” the TEG said.

    In the  Nordic region, Sweden and  Finland still rely relatively heavily on nuclear power, according to the International  Atomic Energy  Agency  (IAEA).  Sweden’s  five  sites  (Ågesta, Barsebäck,  Forsmark,  Oskarshamn  and  Ringhals) produced  34%  of  its  electricity  in  2019.  Finland’s two locations  (Loviisa and  Olkiluoto)  produced almost 35% of the country’s electricity in 2019.

    Nuclear power is expensive, heavily regulated, slow to build and raises environmental concerns. Presently, risks such as meltdowns, radioactive waste, and proliferation of fissile materials are simply a part of running NPPs, according to the International Energy Agency (IEA). However, its lack of CO2 emissions and its ability to produce energy without interruption can be a draw to investors and policy-makers.

    To better understand this topic requires a more in-depth review of this complex issue, including a discussion of four important issues regarding nuclear power: its appeal, safety concerns, proliferation risks, waste management and investment costs. Starting this week, and for the coming four weeks, NordSIP’s Thor Lindskog will provide an overview of each of these topics.

    Click below to access the articles in this series:

    Image courtesy of Taken via Pixabay
    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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