|Electricité de France's deal with Enel is part of a global upswing for nuclear power. An EDF plant outside Paris. Bloomberg News|
Ene SpA and Electricité de France SA on Monday finalized a deal valued at as much as €16 billion ($22.8 billion) to form a joint venture that will develop nuclear power stations in Italy.
The joint venture, Sviluppo Nucleare Italia Srl, will study the feasibility of building at least four reactors using Areva SA's advanced third-generation EPR nuclear-reactor technology, at a cost of about €4 billion for each 1,600-megawatt unit. EDF has said that economies of scale should allow it to improve the cost-effectiveness of EPRs as it builds more of them.
The deal, originally agreed to in February by Italy-based Enel and French nuclear giant EDF at a summit between Italian Prime Minister Silvio Berlusconi and French President Nicolas Sarkozy, is part of the Italian government's drive to reverse a decades-old ban on nuclear-power generation in Italy. The country banned nuclear-generating facilities in a 1987 referendum after the Chernobyl disaster in the former Soviet Union.
The move in Italy is part of a trend world-wide to build nuclear power stations as governments try to shore up energy security and take action on greenhouse-gas emissions to meet climate-change commitments. Nuclear power plants can provide low-carbon electricity for as long as 60 years.
In the best-case scenario, the amount of electricity generated from nuclear power could almost double to 619 gigawatts by 2030 from 370 gigawatts now, according to forecasts in the Organization for Economic Cooperation and Development's Nuclear Energy Outlook, published last year.
According to the International Atomic Energy Authority, 52 nuclear power stations are currently under construction, with most of these in China and other countries outside the OECD.
In Europe, fears about overdependence on Russian gas to generate electricity, tough European Union climate-change targets and the closure over the next 15 years of many aging nuclear power stations have driven countries such as the U.K. to support the construction of new plants. Sweden, meanwhile, has begun the legislative process to overturn a ban on nuclear energy and Germany is also reconsidering its nuclear phase-out.
In Spain, the government has granted an operating extension to a nuclear power plant that was originally designed to run only until 2011. This could set a precedent for four large plants.
In the Middle East, governments are spurred on by rising electricity demand in their own countries and are considering freeing up lucrative domestic oil and gas output for export.
The United Arab Emirates is blazing a trail with its $41 billion nuclear program to build reactors to help meet a projected doubling in electricity demand by 2020. Emirates Nuclear Energy Corp. plans to award contracts for the primary construction work next month.
Other Gulf countries, such as Saudi Arabia and Qatar, have taken first steps toward building nuclear power plants, signing memoranda of understanding with countries that have nuclear power.
In the U.S., the operating lives of older nuclear power plants are being extended. Announcements on loan guarantees, due soon, are likely to spur the building of new nuclear plants, as they will help ease the financial burden on companies through the 10-year approval and construction process.
But the return to nuclear power could be limited by the difficulty of rebuilding the supply chain after such a long hiatus, low carbon prices and policy and regulation, industry experts say.
Though developments in Europe and the Middle East look promising for the nuclear industry, most countries are still at the stage of applying for planning and regulatory approval. Only two reactors are currently being built in Western Europe -- an EDF-led project in Flamanville, France, and an Areva-led project in Finland.
Sabrina Cohen, Adam Mitchell, Jan Hromadko and Bernd Radowitz contributed to this article.