Last year I was invited to participate as a speaker in the 22nd Winter Course of the International School on Disarmament and Research on Conflict (ISODARCO), to be held in Andalo, near Trento (Italy), from 11-18 January 2009. Due to a misunderstanding with the organizers that was entirely my fault, I had assumed I was to take part in a round table on the relationship between the nuclear industry and nuclear proliferation.
I ended up covering a different topic, but in possession of a few notes on, and of renewed interest in, a subject – nuclear industry – I had last dealt with more than a decade ago. I learned, for example, that the world was about to experience a nuclear revival.
Further feeding my interest came, on 24 February 2009, the signing of an agreement between the governments of France and Italy on the development of the nuclear industry – paralleled by another one on the same matter between the respective largest electricity utilities, EDF and ENEL.
These moves were hailed, especially by the French and Italian media, as Rome’s nuclear U-turn. Italy has no functioning nuclear power plant in its territory as a result of three referenda held in November 1987 – the year after the Chernobyl nuclear accident – that made clear a public aversion to making use of nuclear energy. All the governments in power since then but the current one pledged to respect the popular will emerged in the 1987 referenda.
In this short paper I will briefly review what is known of the Franco-Italian agreements, assessing whether it can be really taken as the Italian version of a worldwide nuclear renaissance. Finally, I’ll ask what the likelihood of such renaissance really is.
What about the relationship between the nuclear industry and nuclear proliferation that initially triggered this paper?
Well, the fissile materials needed to have a controlled chain reaction in a nuclear reactor are the same as those needed for an uncontrolled chain reaction in a nuclear bomb.
With Uranium the degree of enrichment is very different: around 3% for a reactor, more than 90% for a bomb. But the technologies, and the attendant equipment, to enrich it are the same. This is what the fuss about the Iranian nuclear program is about, after all.
Once separated from spent nuclear fuel, Plutonium, which is a fission by-product and does not exist in nature, may be used indifferently to fuel a bomb as well as a reactor.
Thus, other things being equal, the more nuclear reactors are around, the more fissile materials are around, the more difficult becomes countering the proliferation of nuclear weapons. If a nuclear revival were truly to take place over the coming decades and the number of world nuclear reactors were to substantially increase, then – other things being equal – nuclear non-proliferation would become harder.
But other things are never equal. One may imagine, for example, a world in which complete nuclear disarmament has been achieved, the nuclear fuel cycle has been fully internationalized and the International Atomic Energy Agency (IAEA) has been given the most intrusive and full-proof inspection prerogatives ever imagined – three measures advocated by a growing number of experts, politicians and former statesmen.

In such a world nuclear proliferation would be certainly easier to hold in check than today´s – but made easier still, the less nuclear reactors and fissile materials would be around. In other words, there may very well be a thousand good arguments to see with favour the growth of the nuclear industry – except non-proliferation.

1. The Franco-Italian agreement
I searched the web as best as I could but I had no success in finding the text of what a majority of sources described as a Protocollo d’intesa (Protocole d’accord in French), i.e. a Memorandum of Uderstanding (MoU), “in the energy field” between France and Italy. The only thing that is indeed certain is that it was signed by the French President, Nicolas Sarkozy, and Italy’s Prime Minister, Silvio Berlusconi, in Rome on 24 February, 2009.
On the website of Italy’s Ministry for economic development, the agreement is presented as an MoU “on nuclear cooperation” and one learns that it foresees the creation of a Franco-Italian “executive committee” charged with fostering bilateral cooperation between nuclear operators, power plant builders, nuclear regulatory agencies, R&D entities and universities.
Not yet at the end of its legislative process, a new draft law establishing an Italian nuclear regulatory agency and some general criteria for the localization of nuclear power plants is being debated in the Italian Parliament.
Even though the inter-governmental agreement seems to contain no firm commitment on anything, both Berlusconi and Claudio Scajola, Italy’s Minister for economic development, have declared that the government intends to begin the construction of at least two nuclear plants before the current legislation ends in 2013. A farther and more ambitious goal is to get one fourth of Italy’s electricity needs (the equivalent of some 12,000 megawatts) from nuclear sources “around” the year 2020. This would imply the construction of 6-10 nuclear power plants over the next 10-15 years.
According to the financial daily, Il Sole 24 Ore, the idea would then be to build by 2020 four 1.600 MW French-designed, Areva European Pressurized Reactors (EPRs), plus others – either additional EPRs or 1.100 MW U.S.-designed, Westinghouse AP1000, or a combination of them1.
Programs of this scale clearly need a government backing well beyond the words of both the Franco-Italian MoU and what the draft law on nuclear energy may say on regulation. One can only note at this stage that Rome, burdened by one of the world heaviest public debt in proportion to the size of the economy, has been extremely reluctant to counter the current economic downturn by opening the public purse. There is, in other words, little public money for anything, nuclear and non-nuclear alike.
Elsewhere – in the U.S. and Britain, but also in France – the nuclear industry has been conspicuously absent from far more generous stimulus packages, a plausible reason being the very long lead times of nuclear construction that make it scarcely fit for countercyclical purposes2.
What about private money? The largest Italian power company is ENEL, the signatory of two MoUs with its French counterpart EDF on the same date as the governmental one. The first MoU, whose duration is five years, launches “a feasibility study” to create an ENEL-EDF joint venture that would eventually build and run the four EPRs mentioned above.
In the second MoU, ENEL states its intention to extend its current participation (12.5%) in the EPR under construction in Flamanville, France, to five further reactors also to be built in France, beginning with the one recently authorized in Penly. Note that both companies are owned (31% ENEL, 87% EDF) and controlled by their respective governments, so one can speak of private money only in a rather limited sense.
We are, however, confined to feasibility studies and intentions – again, no firm commitment. This applies in particular to nuclear plants in Italy. The one plant in France, at Flamanville, with its attendant ENEL stake is the only think that does exist at this stage.
From the point of view of hedging its bets by diversifying the sources of its electricity, ENEL strategy makes sense. Next door to Italy, ENEL’s main market, EDF and Areva have probably the best expertise in the world in terms of, respectively, running and designing-building nuclear power plants. Instead of reinventing the wheel and going against a public opinion which may still be highly sceptical vis-à-vis the nuclear industry, it is thus understandable that ENEL prefers to invest in France.
Italy buys about 13% of its electricity from sources outside its territory, mainly from France and from French nuclear power plants. So, another move that makes sense is expanding the interconnection capacity between these two countries – which is precisely what the electricity network companies spun off of EDF and ENEL, RTE e Terna respectively, are doing: their target is an increase in such capacity of 60% over the next couple of years.

Here we come to a point that although crucial rarely appears in Italy’s domestic debate on the nuclear industry: the making of Europe’s single market in energy, and in electricity in particular. The latter was launched about a decade ago and has led to a high degree of reorganization of the industry, whereby several former national monopolists have compensated the loss of market share at home with an increasing presence in other EU member states. For example, ENEL controls the main electricity companies of Spain and Slovakia.
Mergers and acquisitions, plus fostering interconnection, are the main instruments for the creation of a single electricity market. There is, however, a third and important element, i.e. public attitude. Governments and politicians, particularly in Italy, are reluctant to think in terms of Europe’s single market. A common argument to support the notion of an Italy’s U-turn on nuclear matters goes like this: we import so much electricity from French nuclear plants that we may as well produce it domestically.
But buying electricity from France should not be called an import anymore – as much as it would sound strange to call import or export a transaction between different Italian regions. Behind this particular transaction as well there is a market rationale that satisfies both buyers and sellers. In particular, “France has a huge generating overcapacity, which it uses to export electricity to neighbouring countries at cheap prices.”3
Thus the argument above should be turned on its head: is there a market for additional nuclear power plants in Italian territory? Let (Europe’s single) market decide the level of supply, the different sources of energy and the location of productive units.
Energy self-sufficiency is impossible, for Europe as a whole as well as for each and every EU member state. Diversification of energy resources is the only realistic course of action to increase security of supply. But it’s Europe as a whole that must have a mix as diversified as possible – and at the same time as market led as possible – not each and every EU member state, including Italy.
If one takes Europe as a whole, then perhaps what the French invested so far in the nuclear field is enough to ensure diversification of energy sources for all. “In 2007, France’s 59 reactors produced 418.6 terawatt hours or 77 percent of its electricity4”. Currently, in the EU as a whole, the nuclear share is estimated between 28 and 33% of the electricity and 12 and 15% of primary energy5. Taking the nuclear share of electricity alone, Japan is in the same ball park (27%), but the U.S. (20%) and Russia (16%) are decidedly below Europe’s level.
Thus, it may make sense for Italy and its companies to invest in non-nuclear sources – besides renewables, natural gas pipelines from Algeria-Tunisia and from the Caspian sea via Turkey and Greece, plus Liquefied Natural Gas (LNG) terminals6 – while at the same time buying, as an insurance policy, a stake in the ongoing French nuclear effort.
With no private or public firm commitment yet in sight, there remains the issue of the Italian public attitude toward the nuclear industry. Has it really changed since 1987? The best way to know it would be to hold a new referendum. But somehow the government finds it unnecessary.
In 1987, one of the three referenda asked the abrogation of a norm that allowed the central government, after a given delay, to overwhelm the local opposition to the construction of a nuclear plant; another asked the abrogation of a norm that allowed the central government to compensate locals jurisdictions for the acceptance of a nuclear plant in their territory; and a third asked the abrogation of a norm that allowed ENEL to take part in international joint ventures for the construction of nuclear power plants outside Italy. The three propositions won with an 8-2 margin.
The letter of none of these forecloses the construction of new nuclear plants – let alone the closure of existing ones as decided at that time. Besides, ENEL is doing exactly what it was forbidden to do by the third referendum, probably on the assumption that in 1992 it changed its legal form, from state enterprise to public company. The decision of renouncing in practice the civilian use of nuclear energy in Italy was rather a political interpretation of the outcome of the three referenda.
Perhaps it was an unwarranted interpretation all along. But that is not what the current government says when it promises to go back to nuclear power. It just seems to give it for granted that the public mind has changed – precisely what a democracy should not give for granted but rather ask the electorate through a fresh consultation.
The results of any such consultation are difficult to predict. Nuclear energy once used to be a left (against) right (for) issue in Italy, but this time around there are more contradictory signals: while the main party on the left, the Democratic Party, has kept largely silent, on the right Ugo Cappellacci, the governor of Sardinia, stunned his and Berlusconi’s Freedom Party by declaring just days after his election that whoever wants to build a nuclear plant on his region will have to do it “over his dead body7”.
On 24 February, the day of the Franco-Italian summit, the daily Il Sole 24 Ore also reported that Finmeccanica – a large Italian, state-owned, defense, electronics and engineering firm – was about to buy the 34% of Areva that the German company, Siemens, had decided to divest itself of at the end of January. The news was promptly and peremptorily denied by Finmeccanica.
Areva’s stock was worth in mid-March 2009 about half what it was 12 months earlier – a little worse than the performance of Eurostoxx 50, the blue-chip index for the euro-zone, over the same period. Siemens’ exit entails a put option and Areva will have to pay about € 2 billion to its former German partner at some point over the next three years8.
New firm orders – as opposed to good intentions – are not yet in sight for the French company. To the contrary, expectations go more an more unfulfilled – such as those in the U.S. and in South Africa, whose reported order of 12 reactors has been cancelled. The EPR under construction at Olkiluoto, Finland, “has been plagued by water-logged concrete, faulty welds and flawed pipes, delaying the reactor start date by at least three years and raising costs by roughly 50 percent9”.
Finmeccanica’s lack of enthusiasm in buying a stake in Areva is thus rather understandable.
In conclusion, an Italian nuclear revival appears unlikely in the short term. It is also far too early to tell whether Italy will indeed end up having nuclear power plants operational in its territory by the end of the next decade or beyond, thus making good on the declaratory policy of the current government.

2. A worldwide nuclear renaissance?
The growth prospects of the nuclear industry are a function of several factors. These factors – chiefly the economy, the environment and security of supply – have their own peculiar way to change continuously and always stay the same.
Here are two headlines from The New York Times, one recent, the other old.
PRESIDENT OFFERS PLANS FOR REVIVAL OF NUCLEAR
WHERE SHOULD THE NUCLEAR WASTE GO?
Which is which? The former is of October 1981 (the President was Ronald Reagan), the latter of December 2008.10 But the fact that it might have very well been the other way around goes a long way to show that hopes and delusions in the civilian nuclear field tend to remain the same.
Let’s briefly review the three factors separately.

2.1 The Economy
In mid-2008, only a few months ago, the word most frequently associated with the adjective “nuclear” was indeed “revival”, meaning that after a couple of decades of nuclear neglect we were on the eve of a spectacular growth of this industry. Only a few months ago, in fact, world GNP was growing at a historically unprecedented rate and with it grew world energy demand. A rapidly growing energy demand was driving up, in a way that seemed irreversible and even unbounded, the price of fossil fuels. High prices of fossil fuels make all other energy sources, including nuclear, more competitive.
Last July, a barrel of oil hit the $147 mark. At about the same time, Arjun N. Murti, an energy analyst for Goldman Sachs made the headlines (again in The New York Times) predicting a price of $ 200 “soon”11.
A typical problem with the nuclear industry – that of being capital intensive – appeared to have been overcome because capital was abundant. Only a few months ago, merchant banks, including Goldman Sachs, still existed.
Now, in early 2009, all these conditions are upside down and therefore the economic case for a nuclear renaissance is far less self-explanatory.
Basically, the oil price plummeted – in mid-March 2009 hovers well below $50-a-barrel, despite the usual Russia’s Christmas tinkering with its gas exports to Europe via Ukraine and a war in the Gaza strip, Middle East, at around the same time. Credit froze, with devastating, systemic consequences. What is worse a complete thaw of it is not yet here.
Last, but not least, world GNP growth is predicted to be negative in 2009, for the first time since the end of WW2. Ditto of world trade. Most of the richest countries are expected to have their sharpest contraction of the last 60 years or so.
True, the oil price is so volatile that it’d take relatively little to send it up again – basically a return to growth onto positive terrain.
True, the sharp economic downturn the world over has triggered in most places so-called stimulus packages of public spending. In other words, capital may be plentiful once again in the coming months. But consisting mostly of taxpayers’ money, it will be the Treasuries to decide how to use it.
Normally, this used to favour the nuclear industry – think of France, for example. But these are not normal times. If the objective is to jumpstart or jolt the economy, I doubt that many rich nations will embark in projects, such as the construction of nuclear power plants, that take at least a decade to come to completion. The packages approved so far, beginning with the U.S. one, confirm this line of reasoning.
These are the main known, or knowable, economic factors.
Right now they do not seem to support any nuclear revival.
Then there are the perennial unknowns or unknowables. How much does it really cost the decommissioning of nuclear power plants? How much does it really cost long term waste storage? Who will bear these costs? Governments, i.e. taxpayers? The utilities, i.e. consumers? Isn’t a taxpayer also a consumer and vice versa?
Ultimately, what’s the proper economic environment for the nuclear industry, a command economy or a market economy? The Russian and the French answer would probably be: the former. The British and U.S. (and the European Commission’s) answer would probably be: the latter. Or rather, market economy yes, but with some public guarantees of an explicit or implicit kind.
What’s an implicit public guarantee? Answer: Fannie Mae and Freddie Mac.

2.2 The environment
Let’s give it for granted here that Three-mile Island and Chernobyl have been absurdly unlikely accidents that are never ever to occur again. In other words, for the sake of the argument, let us assign zero probability to a major release of radioactivity from a nuclear power plant, either intentionally (terrorism) or unintentionally (accident).
Nuclear power plants do not emit greenhouse gases, if one excludes the emissions linked to the construction phase. To the extent that global warming is a real and present danger the nuclear industry scores many points. Actually, global warming was one of the strongest arguments behind the whole nuclear renaissance idea.
Nuclear energy does not affect, however, one major producer of greenhouse gases, the transportation sector, that relies almost entirely on the internal combustion engine and thus on fossil fuels. This may change if and when advances in battery technology will allow mass-produced cars and trucks to run on electricity. This is clearly another environmental plus for the nuclear industry, albeit still potential.
It often happens these days to stumble on this adjective, “clean”, when reading about nuclear energy. But non-emission of carbon is perhaps not enough to grant the nuclear industry a certificate of cleanness.
Can one really define as “clean” the radioactive waste which is the inevitable by-product of the fission process? The amount of High Level Waste worldwide is currently increasing by about 12,000 metric tons every year. HLW includes radionuclides whose half-life is measured in tens of thousand, hundreds of thousand and even millions of years.
Things are not going to get any better with more recent technology. Areva’s EPR was expected to produce less waste, for example. It turned out instead that its waste will be more radioactive by a factor of seven according to Greenpeace, and by 15% according to Areva itself12.
Mixed in the waste but chemically separable there is Plutonium, a raw material for nuclear bombs.
No country in the world can fairly say to have solved the problem of permanent nuclear waste disposal. Most countries do not even know where to locate their disposal sites – the issue obviously triggers the perfect NIMBY storm. And those who know are not sure.
Take the U.S. site at Yucca mountain, Nevada, to which referred one of the two NYT headlines above. President Barak Obama won in Nevada with a pledge to “end the notion of Yucca mountain”. The Senate majority leader, Nevada’s Democratic Senator Harry Reid, is a long-term opponent of the nuclear repository.
Obama’s 2010 budget made good on his electoral promise by cutting off most money for it. The decision to do away with the Yucca project may cost the government billions of dollars in payments to the utility industry. On top of that the $9 billion already spent on the site would be wasted13. Even if the site managed to survive this political barrage, its capacity – 70,000 metric tons of HLV – would equal U.S. spent reactor fuel and military waste now in “temporary” storage in 2010, i.e. next year.

2.3 Security of supply
In 2005 the EU-27 import dependency was 57% for natural gas, 82 % for oil and 39 % for coal. It is projected to climb to, respectively, 84%, 93% and 59% by 2030.
Sure, the EU depends on imports for almost 100% of uranium ore. But these are different sources (about half from Canada and Australia) than those for oil and gas (about half from Russia, Norway and Algeria)14.
Diversifying energy sources is a way to increase security of supply.
On top of that, the cost of uranium is a small fraction (a few percentage points) of the total cost, with or without externalities and unknowables, of a nuclear generated kWh.
Moscow has a special ability at driving home this point of diversification and security of supply to the EU, by plainly closing gas pipelines and halting shipments every other winter around Christmas.

It goes without saying that renewable sources (solar, wind, hydro etc.) share with nuclear the pros of low or zero carbon emissions and diversification – actually they can be considered home sources.
 
Conclusions
Taking into account economic and regulatory constraints – tight and complex licensing procedures are everywhere a well-known further headache – and beyond the revival rhetoric, what’s the foreseeable future of the nuclear industry?
According to Mycle Schneider, author of the “World Nuclear Industry Status Report”, it is not very brilliant15.
The number of worldwide operating nuclear reactors is actually decreasing: they were 439 in 2008 in 31 countries, 5 less than five years before. Total installed capacity – 372 gigawatts in 2008 – is slightly increasing, though, thanks to technical improvements, or “uprating” at existing plants. This roughly corresponds to about 14 percent of the world’s commercial electricity or less than 6 percent of the commercial primary energy.
Estimating “the number of plants that would have to come online over the next several decades simply to maintain the same number of operating plants around the world”, Schneider reaches the conclusion that “70 reactors (in addition to the 20 now under construction with a scheduled start-up date) would have to be planned, completed and started up by 2015 – one every month and a half – and an additional 192 units over the subsequent decade – or one every 18 days”. He believes this is highly unlikely, if not impossible.
Not surprisingly, Schneider’s conclusions are that “contrary to the public’s perception and the industry’s efforts, nuclear power will continue its long-term decline rather than move toward a flourishing future revival”.
All in all, then, this brief review supports the conclusion that non proliferation efforts are not going to be made more difficult in the near future by any nuclear renaissance.
Which does not amount, however, to say that non proliferation is going to be any easier than it is now. North Korea and Iran have shown that the route to the bomb now goes through the Non Proliferation Treaty and the access it grants to nuclear technology, rather than around it. These cases also show that it does not take hundreds of new nuclear power plants to shake the foundations of the non proliferation regime. One or two reactors may suffice.
If one’s main concern is proliferation, she’d better turn her attention, then, to those initiatives – such as the internationalization of the nuclear fuel cycle and/or the elimination of nuclear weapons – that have the best chances to strike at the heart of the problem.

1 See F. Rendina “Italia-Francia, patto sull’atomo”, Il Sole 24 Ore, 24 February, 2009 and A. Geroni “Nuovo asse Italia-Francia”, Il Sole 24 Ore, 25 February, 2009.
2 See E. Grasland, “Le plan de relance américain réjouit les spécialistes européens des énergies renouvelables – Le nucléaire grand oublié”, Les Echos, 17 February, 2009.
3 M. Schneider, “2008 world nuclear industry status report: Western Europe”, Bulletin of the Atomic Scientists, 19 September 2008.
4 M. Schneider, cit.
5 The lower-end estimate is from M. Schneider, cit., the upper-end one from Commission of the European Communities, Nuclear Illustrative Programme, COM (2006) 844 final, 10.1.2007.
6 These are all Trans-European Energy Network projects of EU-wide interest.
7 “Cappellacci: ‘Da Noi nessuna centrale’”, Il Corriere della Sera, 26 February, 2009.
8 See “Nuclear fission”, The Economist, 30 January, 2009.
9 J. Kanter, “Rebound of nuclear plants raising worries over waste”, International Herald Tribune, 31 January, 2009.
10 The first headline is quoted in M. Schneider, “2008 world nuclear industry status report: Global nuclear power”, Bulletin of the Atomic Scientists, 16 September 2008; the second headline is the title of an editorial reprinted in the International Herald Tribune, 24 December 2008.
11 See L. Story, “An Oracle of Oil Predicts $200-a-Barrel Crude”, The New York Times, 21 May, 2008.
12 See Kanter, “Rebound of nuclear plants raising worries over waste”, cit.
13 See M.L.Wald, “Nuclear waste challenge resurfaces”, International Herald Tribune, 6 March, 2009.
14 Commission of the European Communities, An Energy Policy for Europe, COM (2007) 1 final, 10.1.2007.
15 See M. Schneider, “2008 world nuclear industry status report: Global nuclear power”, Bulletin of the Atomic Scientists, 16 September 2008.