Energy Transition Digest: 27 January - 2 March 2025

1. Nuclear Phaseout Reconsidered in Europe

Belgium and Spain are reversing nuclear phaseout policies to continue operating existing reactors after 2035. And Germany is weighing a similar move.

So what? These decisions could keep about 10-15 GW of clean energy on the grid and (in the case of Belgium) open the door to the construction of new reactors. At a time when European countries are decarbonizing their economies and prioritizing energy security, it is only sensible to keep operating power assets that still have years of engineering life in them.

Details:

• Spanish parliament approved a proposal to the government to reverse the current nuclear phase-out policy, which requires all reactors to be shut down by 2035.
• Belgium's government announced plans to extend the lifetime of two reactors for 10 years beyond 2035 and build 4 GW of new capacity.
• Friedrich Merz, a leader of the dominant party in Germany's latest elections, proposed a moratorium on dismantling nuclear power plants so that restarts can be considered in the future. Although short-term restarts are unlikely, this is a change in public discourse.
• A recent study for Germany estimated that two reactors could be restarted within 3 years at less than €1bn/unit, and seven more could be restarted within 8 years at under €3bn/unit.

2. UAE Plans to Invest in Nuclear Projects Abroad

Emirates Nuclear Energy Company's CEO told the Financial Times about the company's overseas expansion plans in the nuclear sector.

So what? In 2024, ENEC achieved commercial operation of the fourth unit of the 5.6 GW Barakah nuclear power plant in the UAE. Now, the company aims to capitalize on its success in the domestic market through investments and consulting on nuclear projects worldwide.

Details:

• Barakah is the first nuclear power plant in the Arab world and was completed in 12 years (9 years for each reactor) in partnership with Korea Electric Power Corporation (KEPCO).
• The US is a market of particular interest, where the demand for clean firm power from AI applications drives interest in nuclear energy.
• ENEC examines various opportunities, including investments in greenfield and brownfield projects and consulting services based on its accumulated Barakah experience.

3. Updated NDCs Mostly Missing or Misaligned with 1.5°C

More than 170 countries missed the deadline to submit the updated Nationally Determined Contributions (NDC) under the Paris Agreement. Furthermore, the UK is the only country among the top 10 economies aligned with the 1.5°C target.

So what? With the US exiting the Paris Agreement, international relations becoming more fragmented and fragile, and global temperatures rising fast, the viability of global climate targets is in question.

Details:

• February 10 was the deadline for the signatories of the Paris Agreement to submit the updated NDCs for the next 10 years.
• Climate Action Tracker analyses government climate action and assesses alignment with the Paris Agreement targets.
• More submissions are expected by the COP30 summit in Brazil this November.

4. Baltic States Synchronized with European Grid

Estonia, Latvia, and Lithuania disconnected from the Russian electricity system and synchronized with that of continental Europe.

So what? Baltic states' efforts to join the Continental Europe Synchronous Area (CESA) started in 2007 and got even more geopolitical significance with Russia's war in Ukraine and the EU's plan to improve energy independence from Russia. Now, this process is completed.

Details:

• The three countries disconnected from Russia's electricity system on February 8, and their grids operated in an island model before being synchronized with CESA on February 9.
• More than €1.2bn has been invested in infrastructure upgrades to enable synchronization.
• Baltic states are connected with the rest of the continent via Poland.

5. EU Unveils Omnibus Legislation Package

The European Commission released the "Omnibus" legislation package, which aims to simplify sustainability-related regulations, including CBAM, CSRD, CSDDD, and Taxonomy.

So what? While the purpose of Omnibus – reducing administrative burden while upholding sustainability standards – is noble, it opens a lengthy renegotiation process, leaving companies with regulatory uncertainty.

Details:

• Sirius has put together a comprehensive overview of the changes here.
• CSRD and CSDDD deadlines have been pushed to 2028, and 80% of companies previously included have been removed from the scope.
• CBAM will not apply to companies importing less than 50 tonnes of relevant products per year – it will ease the burden on small businesses while still covering 99% of emissions.
• Reporting requirements and the required data points have been scaled back across the board.

Other News Headlines:

• China introduced export controls on five critical minerals in response to US tariffs.

• EDF wants to attract data centers to France with land access and low-carbon electricity.
• China will shift from fixed to market-based electricity prices for new wind & solar projects.