Italy needs joint funding for nuclear revival-A2A

Thursday, May 29, 2008

MILAN, May 28 (Reuters) - Italian power generators and major consumers should fund a revival of nuclear energy in the country which rejected it 20 years ago, an executive from the utility A2A SpA said on Wednesday.

A simmering debate about a possible renaissance of nuclear energy in Italy -- which was banned in a 1987 referendum after the Chernobyl disaster -- heated up last week when economic development minister said construction of new nuclear plants should start within five years.

But where the multi-billion euro investment that would be needed will come from is unclear, even if strong public opposition to nuclear can be overcome.

"(It will take) enormous investments with considerable sums set aside for decommissioning," A2A Executive Board Chairman Giuliano Zuccoli told reporters.

"That's why we believe it is necessary to create a consortium of producers led by (Italy's biggest utility) Enel SpA," Zuccoli said, adding there were no concrete plans.

Zuccoli said A2A representatives had taken part in a recent trip by research group Energy Lab, which has been drafting a nuclear build plan for in Italy, to Finland to learn from Finnish forestry and energy firms building a plant there.

Energy experts say it would 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. A plan for new nuclear should be drafted to see how to shorten the time for new plant construction, define how many plants are needed and deal with radioactive waste, Zuccoli said.

Energy experts say Italy needs nuclear power capacity of between 8,000 and 15,000 megawatts to reduce dependence on energy imports, cut emissions of carbon dioxide (CO2) and trim power prices which are among the highest in Europe.

Roberto Poti, head of development at Italy's second-biggest utility Edison SpA, said Italy would need at least 12 years to build up nuclear plants with a total capacity of 10,000 MW. Edison is controlled by A2A and French nuclear power producer EDF SA.

Italy relies on oil and gas imports to meet more than 80 percent of its energy demand and buys abroad about 20 percent of electricity it needs.

Much of the imported power comes from France which generates about 80 percent of its electricity from nuclear reactors.

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