France has positioned itself as a global player in nuclear production, resulting in supply security, the ability to export nuclear energy and cheap electricity costs. Italy’s lack of nuclear ambition has contributed to its status as a major net electricity importer, resulting in elevated energy costs.
Italy’s decision, ratified in July 2009, to start nuclear production through its joint venture with France will secure energy supplies and gain cheaper electricity for businesses and consumers.
- In 1987, Italy’s nuclear production was halted after the Chernobyl accident of 1986. 80.5% of its electricity generation came from fossil fuels in 2009 while France made 78.2% of its electricity through nuclear generation;
Source: Euromonitor International from OECD.
- The World Nuclear Association estimates that over 10% of Italy’s electricity needs were derived from imported nuclear power in 2007 (latest figure available), most of which came from France. By contrast, 38.3% of France’s primary energy consumption was from domestically produced nuclear power in 2009;
- Italy changed its laws in July 2009 to commence the building of reactors in order to produce nuclear fuel. A number of agreements were signed between the two governments in April 2010, which will see Italy’s Enel combine forces with France’s Electricite de France (EDF) and Areva to realise this ambition.
The joint venture between France and Italy will enable the export of French expertise whilst creating a new industry and lower prices for Italy:
- According to the International Energy Agency, Italy is the world’s largest net importer of electricity (46 TWh in 2007 – latest data available) contrasting with France, which is the world’s largest exporter of electricity (57 TWh in 2007). Italy is at the mercy of hydrocarbon price fluctuations and geopolitical events while France has supply security;
- The deal between France and Italy will lead to the creation of a new sector, creating employment in Italy. Italian unemployment reached 8.5% in February 2010 up from 7.4% in April 2009. It will also cement France’s expertise in nuclear technology globally and aid GDP growth;
- However, an Italian nuclear industry will have negative implications for French energy exports. Exports of mineral fuels equated to 5.1% of French exports in 2009;
- The lack of a nuclear industry and its characteristic as a net importer of electricity has translated to high electricity prices for Italy, negatively impacting Italian consumers and businesses. France’s foray into nuclear energy has resulted in some of the cheapest electricity prices globally. Amongst the International Energy Agency (IEA) participating countries, France had the lowest electricity costs for industrial usage and one of the lowest for its households at US$0.06 per unit and US$0.17 per unit respectively in 2008;
|US$ per unit of electricity|
Source: International Energy AgencyNote: 2008 is latest data available.
- Energy from nuclear power will also help Italy to reduce its carbon emissions. In 2009, Italy emitted 7,575 kg per capita of CO2 emissions from the consumption and flaring of fossil fuels compared to 6,442 kg per capita in France;
- However, France’s considerable nuclear capabilities expose it to potentially catastrophic nuclear accidents. The latest nuclear reactors have reduced this risk but are a consideration that prevents governments from extending or commencing civilian nuclear activities.
The Italian government intends to reduce its dependence on fossil fuels for its electricity from 80.5% in 2009 to 50% by 2030. It aims to derive 25% of its electricity from nuclear energy by 2030. The building of nuclear reactors will commence in 2013 with energy production expected by 2020.
France’s dominance in nuclear technology came into question when it lost a multi-billion dollar project to build nuclear reactors for the United Arab Emirates to South Korea in December 2009. However, by 2020 EDF intends on exporting Areva’s latest EPR technology by building ten nuclear plants globally.