EU energy supply at risk after Fukushima -Capgemini

PARIS Wed Oct 26, 2011 7:04am EDT

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PARIS Oct 26 (Reuters) - European Union governments must encourage investments of as much as 1.1 trillion euros ($1.53 trillion) by 2020 to ensure the bloc's continued energy supply security, French computer consultancy Capgemini said in a study on Wednesday.

The impact of Japan's Fukushima nuclear disaster on certain EU states' energy mix has cast doubt on Europe's supply security, the outlook for power prices and efforts to fight global warming, Capgemini energy analyst Colette Lewiner said.

"Energy consumption growth in developing countries, the Fukushima accident, together with a slowdown in needed investments in energy infrastructure will have negative consequences in Europe on the security of energy supply and greenhouse gas emissions," Lewiner said.

The nuclear accident at the Fukushima plant in March has prompted only a limited number of countries -- Germany, Italy and Switzerland -- to shelve their atomic plans, Lewiner said, noting many more have confirmed their commitment to nuclear.

China, South Korea, Russia, Britain, France, the Czech Republic and countries in the Middle East have all said they would forge ahead with nuclear plans.

"More than three quarters of the 62 reactors under construction are in Asia and in Russia. These countries are facing high energy needs and except perhaps for Japan, should continue construction," Lewiner said.

But Germany's decision to stop its seven oldest reactors, and phase out its remaining nine reactors between 2015 and 2022, has far reaching implications for Europe's energy supply security, the Capgemini study said.

Germany is now importing electricity from its neighbours.

"However, during the winter peak, France imports electricity mainly from Germany but this will not be possible in coming years. There is thus a real threat in some countries in keeping the lights on for the 2011/12 winter, and future winters," Lewiner said.

This means Germany, and the rest of Europe, will become more dependent on Russian gas imports, Capgemini said, estimating that the share of Russia in Europe's gas imports should rise from 33 percent in 2010 to 50 percent in 2030.

Finally the development of renewable energies, which have a higher production cost than nuclear power, should push energy prices up for European households.

"Although a second economic crisis might delay these negative effects, the longer term impact will be difficult to face as we struggle to curb the planet's temperature rise an keep the lights on for future generations," Lewiner concluded. ($1 = 0.719 Euros) (Reporting By Marie Maitre; Editing by Anthony Barker)

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