July 10, 2024
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Eastern Europe's Nuclear Ambitions: A €130bn Dream Confronts Financial and Technical Realities

Eastern Europe aims for a nuclear power expansion with a dozen new reactors, but the €130 billion plan faces significant financial, technical, and regulatory obstacles.
Eastern Europe's Nuclear Ambitions: A €130bn Dream Confronts Financial and Technical Realities
Fredrick Musen - Unsplash

In the heart of Eastern Europe, a nuclear power resurgence is underway, as governments from Prague to Sofia lay out ambitious plans to build new nuclear reactors. Driven by a desire to meet the European Union's green energy targets, reduce dependence on fossil fuels, and bolster energy security, these nations are collectively envisioning a nuclear expansion of unprecedented scale.

This ambitious undertaking, with a price tag of nearly €130 billion, represents a significant commitment to nuclear energy. However, the path to realising this vision is far from smooth, as the region grapples with several formidable challenges.

One of the most pressing concerns is securing the necessary funding. Private investors have been reluctant to fully finance these large-scale nuclear projects due to the inherent risks and long construction timelines. As a result, the burden of financing falls heavily on governments, straining their budgets and raising questions about the economic feasibility of these endeavours.

While the European Union has signalled its support for nuclear energy as part of its green energy transition, competition for EU subsidies is intense. Eastern European nations are vying for a share of these funds, but the allocation process is complex and lengthy, leading to potential delays in project timelines.

Poland, for instance, is grappling with how to finance its first nuclear power plant, which could cost upwards of $30 billion. The government is exploring various financing options, including state subsidies and contracts for difference agreements, but negotiations are ongoing.

Other countries in the region, such as Romania and the Czech Republic, are also devising strategies to secure funding for their nuclear projects. However, investment decisions are likely to be delayed until the EU approves aid under its 2028–34 budget cycle.

Technical challenges also loom large. Unlike Western Europe, which boasts a well-established nuclear industry, Eastern Europe lacks the same level of expertise and infrastructure. This necessitates relying on foreign companies and expertise, which can increase costs and create logistical complexities.

Moreover, the construction of nuclear power plants is notoriously prone to delays and cost overruns. Slovakia's Mochovce plant, for example, experienced significant delays and cost twice its original budget. Such setbacks raise concerns about the ability of Eastern European countries to deliver their nuclear projects on time and within budget.

Despite these challenges, the determination to embrace nuclear power remains unwavering in Eastern Europe. Governments view it as a reliable and low-carbon energy source that can provide a stable baseload power supply and reduce greenhouse gas emissions. Additionally, the region's historical reliance on Russian gas has fuelled a desire for energy independence, making nuclear power an attractive option.

Eastern Europe's nuclear ambitions are undeniably bold and promising. However, the success of these endeavours hinges on the ability of governments to navigate complex financial landscapes, secure adequate funding, and address technical shortcomings.

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