Economy argues about subsidies for old nuclear power plants

Should Switzerland build new nuclear power plants despite the nuclear phase-out? The SVP has been managing the issue for months. It warns of a power shortage and calls for the construction of new nuclear power plants. However, new reactors will not solve Switzerland’s short-term problem. Due to new rules in the EU, there is a risk of electricity shortages as early as 2025. However, it takes at least 20 years for a new nuclear power plant to be approved and built.

However, another discussion is much closer to the short and medium-term risks of the Swiss electricity supply: How long should the existing nuclear power plants run? Parliament has not specified any fixed terms. Beznau I and II, Gösgen and Leibstadt are allowed to produce electricity for as long as they can be operated safely. The supervisory authority Ensi makes the safety specifications. The owners decide for themselves whether it is worthwhile for them to continue using them after expensive upgrades. The power company BKW came to the conclusion that investments in the security of the Mühleberg nuclear power plant no longer paid off and therefore took the plant off the grid in 2019.

Economiesuisse wants old nuclear power plants as a safeguard

In the judgment of the business umbrella organization Economiesuisse, that was not a good idea. As long as there is an acute danger of a power outage, phasing out nuclear energy is highly risky and is associated with concrete dangers for households and the economy, the association writes in a policy paper on security of supply. As long as the plants can be operated safely and provisions are made for disposal, they should therefore remain connected to the grid. The old kilns are almost CO₂-neutral and supplied electricity in large quantities. According to Economiesuisse, if they continue to run, the winter shortage will partially ease. The life extension of the old nuclear power plants served as insurance in case the expansion of renewables continues to falter.

The association derives two conclusions from this: The dismantling of reactors should only be possible when the expansion of renewables has progressed. In addition, old nuclear power plants should also be able to receive subsidies. Specifically, Economiesuisse wants existing plants that are no longer profitable to be able to participate in tenders for funding in the event of an impending shortage. “It would be negligent to ignore nuclear power a priori,” says Alexander Keberle from Economiesuisse. In the auctions, the old nuclear power plants are in competition with photovoltaic, wind and biomass systems as well as hydroelectric power plants.

Cool reaction from Axpo and Alpiq

This proposal met with resistance – also in business. “We are categorically against even more subsidies for old nuclear power plants,” says Fabienne Thomas from AEE Suisse, the umbrella organization of the economy for renewable energies and energy efficiency. It represents professional and industry associations as well as companies that are committed to renewables. Nuclear power plants became less reliable as they got older. Due to the high risk of failure, other plants would have to be available at all times as security, which makes production more expensive.

In addition, there would then be a lack of funds for the expansion of renewables. The available funds should be invested in the expansion of sustainable technology. Thomas points to the International Energy Agency (IEA), which recently found that new solar and wind power plants are historically the cheapest form of electricity production. There is also the risk of free-rider effects: an operator receives money even though he lets the nuclear power plants continue to run anyway.

As long as no state funds flow, AEE Suisse is open to longer terms, provided that the nuclear power plants can be operated safely. This must be assessed in the specific case, says Thomas.

The electricity companies Axpo and Alpiq, which operate the four nuclear power plants, are also reacting cautiously to negatively to the Economiesuisse proposal. Alpiq refers to the applicable law, according to which nuclear power plants can run for as long as they can be operated safely and economically. This does not require subsidies, but stable framework conditions, for example for the financing of the decommissioning and waste disposal fund, says spokesman Guido Lichtensteiger. The focus of the funding must be on renewables. In view of the supply-critical winter months, it is important that the projects of the hydropower round table are pushed forward.

According to Axpo spokesman Martin Stucki, there is a risk that a discussion about nuclear power plants will distract from the urgency with which renewable energies must now be expanded. He refers to calculations by the company. These showed that the energy transition can be achieved with a high level of security of supply at the same time if the nuclear power plants were shut down after 60 years of operation. However, this requires a clear push for the expansion of renewables. Beznau I and II reach the operating age of 60 around 2030. At the more powerful plants in Gösgen and Leibstadt, this will take place in 2039 and 2044 respectively.

Associations agree on saving electricity

Economiesuisse’s proposal for the old nuclear power plants made the industry doubt: is the association really serious about expanding photovoltaics? With the longer running time of the reactors, not much time is gained. But it takes pressure off politicians to finally tackle the controversial issues. For example, the strict requirements for landscape protection, which are slowing down the energy transition. Or whether a new funding model is needed to accelerate the expansion of solar energy. Discussions are currently underway in the Energy Commission of the Council of States.

Economiesuisse contradicts this perception. “In addition to hydropower, solar energy is an elementary component of future energy supply,” says Keberle. There is no doubt about that within the association. That was not always so. Economiesuisse was initially one of the bitter critics of the Federal Council’s Energy Strategy 2050.

Nevertheless, differences between the two trade associations remain. Economiesuisse would like to subsidize as little as possible. AEE Suisse, on the other hand, is calling for the amount of funding to be based on the expansion goals – and also for allowing the network surcharge fund to be indebted. The funds for the expansion of renewables come from this fund. AEE Suisse is also demanding a significant increase in the planned fee for the construction of systems that supply electricity in winter.

Economiesuisse, on the other hand, wants to design the expansion in such a way that end customers don’t notice anything. For example, the fee for using the electricity grid is to be reduced. According to AEE Suisse, however, this would lead to overexploitation of the quality and stability of the power grids.

At least the associations agree that there is still a lot to be done in terms of efficiency. Savings in electricity consumption have a faster and more direct effect than the construction of new systems.