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Nuclear energy might not be on its way out in Spain after all

The extension of a power plant's life in Spain heats up debate about the value and role of nuclear power in tomorrow's world.

Critics of nuclear energy point out that waste can remain radioactive for thousands of years, leaving a “super toxic heritage for which there’s no technical solution at present,” Martinez said.

But supporters brandish an argument of a clean legacy: nuclear energy produces no greenhouse gases. According to Foro Nuclear, the eight reactors in Spain avoid 40 million tons of CO2 a year — equivalent, they state, to the emissions of more than half of Spain’s automobiles.

The same arguments repeated by advocates and detractors all over the world make the decision over Garona highly controversial. The plant generates less than 2 percent of the electricity consumption in Spain. If not for windfall profits, the closure debate would be “almost anecdotal,” said Natalia Fabra, a professor of economics at Carlos III University and investigator at the Center for Economic Policy Research.

Backers of nuclear energy assert it is a cheap type of energy while opponents state it is expensive. There have even been warnings that closing Garona will increase consumers’ electricity bills. The reality, says Fabra, is that the Spanish consumer pays a market price for electricity, regardless of the type. “A consumer buys a kilowatt per hour, not a kilowatt per hour of nuclear energy or a kilowatt per hour of another type of energy,” explained Fabra. Closing Garona will have virtually no impact in the market price, she said.

The cost of producing energy at a nuclear plant is lower than at a coal or gas plant, yet it fetches the same market price.

“Closing Garona would be equivalent to burning that money,” said Fabra. What should change, she and other economists believe, is how the extra profits are distributed.

Nuclear plants were built in Spain under a regulatory system that guaranteed their profitability, through the electricity bill set by the Ministry of Industry. “There was no risk involved for the owners,” said Fabra. A 1997 law began liberalizing the market, but not without compensation – through the electricity bill - to buffer energy suppliers during the transition. Again, little risk for the owners.

Critics of windfall profits say it is time to even out the playing field. Suggestions include reducing rates for consumers, increasing taxes on windfall profits and investing part in electric car technologies or further development of renewable energies.

Spain’s current government stands by its aim to reduce nuclear energy stated in its election manifesto. But in his visit to Garona this month, Rajoy said that if his party wins in 2012, “all nuclear stations in Spain will remain open as long as the Nuclear Security Council considers it opportune,” according to Spanish media. The plants in Almaraz, Vandellos, Asco and Cofrentes are due for renewal before the 2012 elections.

The fate of nuclear plants in Spain will ultimately be a political decision. But if the windfall profits argument gains enough traction to change the modus operandi, nuclear energy might not be such a deal for electric companies.