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Opinion: Nuclear Plants Masquerading as Climate-Friendly Shouldn’t Qualify for Green Finance

[This story has been updated to include content on the European Union’s taxonomy for sustainable investments.]

Bruce Power’s recent issuance of C$500 million in green bonds to help extend the life of Ontario’s biggest nuclear power plant is being touted as a critical step toward decarbonization. But it could also be seen as a dangerous and time wasting dead-end, a corruption of the very notion of green financing.

According to Jonathan Hackett, head of sustainable finance at BMO Capital Markets and co-lead green structuring agent for Bruce Power, nuclear is necessary to the net-zero transition, writes the Globe and Mail.

According to Hackett, the urgent need to green the energy and power sectors means nuclear power is a worthy recipient of green finance.

But confronting the notion that nuclear power is “green” are unresolved concerns about what to do with reactor waste products, as well as the acute dangers inherent in nuclear power plants, with the tragedy at Japan’s Fukushima plant the most recent example.

As for the claim that nuclear is essential to avoiding climate meltdown, independent experts say the world has neither the time, the funds, nor the expertise to bring the expensive and notoriously slow sector to bear in time to shift the climate crisis in any meaningful way.

And this reality doesn’t change as the hype around small modular nuclear reactors (SMRs) ramps up. “There is no SMR promoter suggesting a prototype could be licenced, built, and operating by the end of this decade,” said Mycle Schneider, author of the annual World Nuclear Industry Status Report, at a webinar hosted by University of British Columbia in October. “That means—if ever, likely not—a commercialization could start only in the second half of the 2030s.”

Noting that “the industry has never kept its promises on schedules and budgets,” Schneider added, “we have no time, money, and brainpower to waste on fantasy PowerPoint designs.”

Early this month, Ontario Power Generation and GE Hitachi triumphantly announced plans to bring an SMR into service at the Darlington nuclear generating station “as early as 2028”. But even if they managed to bring the project in on time and on budget—a practice that has never been the industry’s strong suit—the project would just be one expensive generation source in a decarbonizing economy that needs far more electricity, and vastly more energy efficiency, far faster than SMRs can deliver.

And this year’s WNISR report was only the latest to conclude that the nuclear industry outside China is already in decline, with its output in the United States dropping to its lowest level since 1995. In France, a former nuclear leader, atomic generation dropped to 1985 levels.

As explained in last year’s WNISR report, this precipitous drop in the fortunes of traditional nuclear owes to the soaring fortunes of solar and wind, with the renewable technologies receiving 10 times as many investment dollars.

Faced with such an implosion in the prospects of its traditional reactors, the nuclear industry has seized upon SMRs as a ticket to a new revenue track. But SMRs will never be ready in time to shift the trajectory of the climate crisis. Even if they worked, “it would take centuries to build enough to make a difference,” Schneider said.

Schneider is not alone that view.

“Betting on nuclear as a climate solution is just sticking our heads in the sand because SMR technology is decades away, extremely expensive, and comes with a nasty pile of security and waste headaches,” Ontario Clean Air Alliance Chair Jack Gibbons wrote last year, responding to then-natural resources minister Seamus O’Regan’s full-throated endorsement of the SMR storyline.

“That our government would be this gullible is distressing, especially given the havoc already being wreaked by a changing climate,” he added.

Jonathan Porritt, founder of the UK’s Forum4theFuture, echoed Gibbons’ view in a March opinion piece for The Guardian. He warned of a nuclear sector now “straining every sinew to present itself as an invaluable ally” in the global push for net-zero by 2050.” Yet the problems that have long dogged the industry remain unchanged: “ever-higher costs, seemingly inevitable delays, no solutions to the nuclear waste challenge, security and proliferation risks.”

Strain as it might, the European industry looks likely to end the year without a decision on whether the European Union will include it in its list of technologies that investors can declare as sustainable practices.

“The EU Taxonomy is a hideous name for a vital set of rules that will ultimately govern sustainable economic activities with goals such as climate change mitigation and adaptation, as well as disclosure around sustainable investment products,” 24/7 Wall Street reported December 10. But while the taxonomy as a whole is due to take effect January 1, “a fierce debate over whether nuclear energy, as well as some forms of natural gas, can fall under the taxonomy as part of any economic ‘transition’, caused the council to push those two off for further discussion. The EU is divided on nuclear energy, with some members such as France big proponents of nuclear power while Germany, among others, is against it.”

With Germany dropping its opposition to including nuclear in the taxonomy, the news story indicated a deal might be close at hand. But for the moment, “Brussels diplomats instead decided getting the vast majority of the taxonomy into law sooner was more important than addressing the divide.”

3 Comments (Open | Close)

3 Comments To "Opinion: Nuclear Plants Masquerading as Climate-Friendly Shouldn’t Qualify for Green Finance"

#1 Comment By Chris Melville On December 19, 2021 @ 12:57 AM

This year the EU’s TEG and JRC published definitive reviews on the suitability of nuclear energy as an ESG investment. Their findings are that nuclear energy meets all the criteria as well, or better than, any form of renewable energy. Failing to include those findings; and similar findings by the UN’s ECE, are a serious lapse of journalism ethics. It undermines the expectation that facts should matter in determining policy, and reduces the debate to pure ideological prejudice.

#2 Comment By Mitchell Beer On December 31, 2021 @ 7:26 PM

Thanks for the prompt to add material on the EU’s sustainable investment taxonomy. We’d originally left out some of that content, TBH, because the story was running long, time was running short, and the EU’s treatment of nuclear and some forms of fossil gas was still unresolved. We’ll take issue, though, with any notion that it’s an ethical lapse or ideological prejudice to emphasize energy solutions that cost pennies per kilowatt-hour, promote energy democracy, don’t melt down, don’t produce waste that remains toxic for thousands of years, have no imaginable connection to nuclear weapons proliferation — and haven’t survived on lavish subsidies for the better part of a century, with no end in sight.

Ask yourself: If the energy efficiency, wind, and solar industries showed up demanding subsidies for purported climate solutions that were still on the drawing boards, after the IPCC declared a 2030 deadline to cut global GHG emissions by 45%, would they be taken seriously? Should they be??