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France and Russia compete for market share. Neither Rome nor reactors are built in a day.
Italy is looking for energy independence, and like many of its politicians, has taken up with two new companions - France and Russia - both of which are promising a new life with nuclear energy at its heart. In doing so Italy is clearly planning to leave behind coal which is its long time companion dating back to the dawn of the industrial age.
The leading light of this change is Industry Minister Claudio Scajola (right) who was the driving force behind an accord signed in February between Italy and France. 
The potential outcome of the agreement with France is a massive investment in nuclear power plants, perhaps as many as eight-to-ten Areva 1,600 MWe PWR type nuclear reactors. Some of the reactors will be built in France. Italy's Enel utility has agreed to take a 12.5% stake in an Areva EPR being built in Flamanville and another 12.5% stake in a second EPR which was just announced by French President Nickolas Sarkozy.
Not to be outdone, and slipping into Italy's embrace only a month after the French left town, Russia's nuclear energy export agency AtomStroyExport signed an agreement with a delegation of Italian companies in Moscow on April 9. The deal calls for construction of Russian designed reactors in Italy.
The prime mover of the agreement is none other than the same Claudia Scajola who began his first flirtation with Russian nuclear power agencies in July 2008. In a meeting with his counterpart Russian Energy Minister Sergei Shmatko, the two countries agreed to broad cooperation in energy technologies including nuclear, gas, and electricity transmission networks.
Unlike the traditional romance movie, where love's labor lost comes to a more or less happy ending, it isn't clear that will be the case here. First, it looks like the Italian's are setting up the French and Russians to compete with each other for the best deal. Second, the Italians could be playing it safe by not having a single source for their nuclear energy technologies. If the strategy is in the second spot, then Italy is clearly following China's strategy of giving no one a preferred market position buying reactors from Westinghouse, Areva, and the Russians. Finally, the Italians may be serious about a deal with the Russians so as not to be domianted by the French state-owned firms of EDF and Areva.
What makes the competition even more interesting is that the Russian initiative with Italy represents the first major foray of its Atomic Export Agency into western Europe. Italy is next door to France and their two economies are closely linked. It is virtually unthinkable that Italy would not buy the majority of its nuclear power capacity from France. There still may be market share for the Russians. It all depends on their ability to deliver a competitive deal.
The feasibility of Russia actually delivering nuclear reactors in the Italian market is an entirely separate question. The Russians do not self-finance their deals with other countries. They also charge a premium price. One of the reasons is that they have their own ambitious program to build nearly two dozen new domestic nuclear plants and plan to raise the money for that domestic expansion with export earnings.
Indeed, French President Nickolas Sarkozy (right) may have been anticipating competition from the Russians when he said last February that state-owned French utility EDF and Italy's Enel "will constitute two components of a trans-alpine energy axis." Reuters also reported similar words from Italy on enduring relationships between the two countries
"In coming years we must lay the first stone of a safe and clean Italian nuclear plant," Foreign Minister Franco Frattini told Italian television. "Nuclear power is an important source of energy supply for Italy."
As French President Nicolas Sarkozy and Berlusconi held a bilateral summit to produce a deal on nuclear cooperation, Frattini said Italy wanted to take advantage of France's "very advanced technology and experience in the subject".
The cost of not having nuclear energy is 50 billion euros
Despite expected problems with financing and political opposition,in the next two decades Italy is planning to get 25% of its electricity from nuclear energy. This is a complete reversal from that country's decision two decades ago to walk away from nuclear energy and dismantle its reactors. The cost of not having the nuclear plants was pegged at $50 billion euros, and for those of you counting zeros, that is indeed the "B" number which is 1,000 million.
World Nuclear News reports that Claudio Scajola, Italy's Energy Minister said that the Berlusconi government is intent on "reversing a terrible mistake" in phasing out nuclear power following the Chernobyl accident in the Ukraine. The Italian populace panicked and voted in 1987 to shut down its nuclear plants.
Energy independence for Italy
Scajola says the goal of investing in nuclear energy is to develop energy independence for Italy and to meet the challenges of global warming. Despite getting cozy with the Russians, volatility in oil prices and energy security scares over natural gas are also likely on the mind of top energy officials. What makes things dicey for doing deals with the Russians is that they if they build Italy's reactors, they will also control the nuclear fuel supply for them. This situation could put Italy at risk the same way the Ukraine is for natural gas.
Turning to domestic matters, Scajola also said that the current legislature will be charged with setting up a legal, regulatory, and technical framework to handle the licensing and oversight of new reactors. A new government agency will be responsible for site and technology selection as well as strategies for eventual decommissioning and management of spent nuclear fuel.
Italy's reversal of policy on nuclear energy now leaves only Germany's Andrea Merkel with an officially sanctioned anti-nuclear energy policy. That situation is in flux and elections in September 2009 may hinge on energy policy with the voters.
Enormous investments will be needed
The key question for Italy is how it will pay for a new, massive investment in nuclear power plants? Reuters reports that the head of A2A, a major Italian utility thinks risk sharing among electricity producers is the way to go.
"(It will take) enormous investments with considerable sums set aside for decommissioning," A2A Executive Board Chairman Giuliano Zuccoli (right) told reporters.
"That's why we believe it is necessary to create a consortium of producers led by Italy's biggest utilities."
Energy experts told Reuters it will be difficult to find funds for new nuclear plants in Italy with state funding scarce and private investors reluctant to finance capital-intensive and long-term projects which also face strong public opposition. However, Fulvio Conti, chief executive of Italy's biggest utility Enel, which owned all Italian nuclear stations before the ban, said the return to nuclear would cut by 20-30 percent Italians' power bills, among the highest in Europe.
Giancarlo Aquilanti, director of nuclear programs at Enel, Italy's biggest utility, said it will be more difficult for utility's like Enel to raise money for nuclear plants in the current financial climate. His timeline suggests a private investment effort to begin construction in 2017 assuming the government has all the policy and regulatory mechanisms in place by 2012. Construction of the plant would take five-to-six years with entry to revenue service in 2023.
Greens will make it hard for Italy to go nuclear
Reuters reports that green groups plan to mount a major campaign to insure that Italy will keep its ban on nuclear power.
"We say 'No' to nuclear... to construction of plants which would be outdated by the time they are built... the plants which are not secure and create waste problems," said Marcello Saponaro, (right) an attorney and the head of Greens in the northern region of Lombardy.
Italy's Greenpeace, World Wildlife Fund, and environmental group Legambiente said in a joint statement boosting renewable energy generation and energy efficiency were much more immediate, simple and less expensive ways "to stop energy fever" than nuclear energy.
Nonproliferation expert says it is a conspiracy
But greens aren't the only groups opposed to Italy's nuclear renaissance. Henry Sokolski, (left) a noted expert on nonproliferation issues, wrote a scathing OP ED in the Wall Street Journal (sub req.), titled, "Italy's Nuclear Job," on May 30, 2008.
Starting with financial considerations he said that Italy's huge debt would prevent it from making the necessary investments in nuclear energy. He wrote,
"Italy and Europe would be wise to stay away from energy investments that no private bank would make without government support. For the moment, that would have to include nuclear."
He said there are three reasons why no new nuclear power plants will be built in Italy.
- Skyrocketing construction costs
- Build times of 10-20 years
- No one in Italy wants one in their backyard
Sokolski also sees a political power play to consolidate power among a few large electric utilities as another reason why Berlusconi's government wants to pursue nuclear power.
"Energy experts, though, suspect something a bit more sinister. The announcement could be part of a long-term effort by the largest European utilities to push out smaller competitors by arranging massive government support for large, expensive nuclear power programs."
Postscript - Galileo has the last word
The last word on a new nuclear build in Italy belongs to Galileo. There is no written historical evidence that Galileo uttered his famous expression "and yet it moves" at his trial. According to later accounts the legend first became widely published in 1761 which is a century and a quarter after he supposedly said it.
Critics of Italy's new nuclear build are faced with a similar reality. Although they want to turn back the clock on energy policy in that country, in fact it has moved into the 21st century.
Four hundred years after the Church put Galileo (left) on trial for heresy the Times of London reports the Vatican is to complete its rehabilitation of the scientist by erecting a statue of him inside the Vatican walls.
The planned statue is to stand in the Vatican gardens near the apartment in which Galileo was incarcerated while awaiting trial in 1633 for advocating heliocentrism, the Copernican doctrine that the Earth revolves around the Sun.
Nicola Cabibbo, head of the Pontifical Academy of Sciences and a nuclear physicist, said: “The Church wants to close the Galileo affair and reach a definitive understanding not only of his great legacy but also of the relationship between science and faith.”
It is not a leap of faith to understand that coal leads to more global warming and nuclear does not. It is a fact of science.
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