The future of nuclear power in the Netherlands (part 3): the project procedure has started!

NL Law

A Notification of Intention and Participation for the construction of two new nuclear power plants was published in the Government Gazette on 22 February 2024. This notification marks the first step in the project procedure that will be followed for the construction of the two nuclear power plants. The Minister of Economic Affairs and Climate announced this step in his letter of 1 February 2024, in which he gave an update on the status of the new nuclear power plants to be built. In addition, the Lower House passed a motion on 28 February 2024 to build two more nuclear power plants. Time for an update!

Changed planning for the construction of the new nuclear power plants

In the letter of 9 December 2022, the minister stated that he is committed to the construction of two new generation III+ nuclear power plants at the preferred location Borssele (Zeeland). The aim is to start operation from 2035, after the four phases of the roadmap for new nuclear power plants have been completed. These phases are:

Phase 1: preparing the decision-making (voorbereiding besluitvorming)

Phase 2: executing the tender (uitvoeren tender)

Phase 3: licensing (vergunningverlening)

Phase 4: construction and commissioning (bouw en ingebruikname)

The minister shared the following schedule in the letter of 9 December 2022:

ams - kernenergie 1

In the letter of 22 February 2024 the minister writes that, even though he plans to maximise progress in the first phase by undertaking several working tracks in parallel, he will take more time for two of the four working tracks (the market consultation and the technical feasibility studies). As a result, the tender will not be launched until mid-2025. However, the minister expects to benefit from this delay during the tender phase because the basis for the negotiations will be better.

Status of phase 1: preparing the decision-making

The minister states in the letter that phase 1 is currently underway. This phase provides for four working tracks: market consultation, technical feasibility studies, first phase project procedure and the State-Region Package. The fourth working track was added in consultation with the municipality of Borsele and the province of Zeeland. In this package, the minister wants to make agreements between the state and the region about the preconditions under which the nuclear power plants will be constructed. These agreements will be made to preserve the quality of the living environment in those areas.

The minister has provided the following updates on the various work tracks.

Market consultation

The market consultation has started and, according to the minister, constructive discussions have taken place with the three technology suppliers, Korea Hydro & Nuclear Power (KDHP), Électricité de France (EDF) and Westinghouse. The intended outcome of these talks is to obtain an overview of the opportunities and constraints for technology suppliers, financial institutions and the Dutch government in financially enabling the construction and operation of the two nuclear power plants. The possible role of the Dutch government with regard to the new nuclear power plants is thereby being explored with the approach of a Government Support Package. This Government Support Package may include different forms of support, such as a government participation, guarantees on debt capital, price support during the operational phase, risk allocation in the construction and operational phase, and indemnifications in the event of higher risks. As the package will also partly consist of financial instruments, it will require approval from the European Commission because of state aid. 

At the end of 2024, the minister will present the first insights on the outcomes of the market consultation after an independent review of the results.

Technical feasibility studies

Contracts for the technical feasibility studies have been signed with the parties with which discussions were also held as part of the market consultation: KNHP, EDF and Westinghouse. In addition, a cooperation agreement was signed with EPZ, the operator of the only nuclear power plant in the Netherlands. The technical feasibility studies aim to determine whether and, if so, how two nuclear power plants can be constructed in Borssele at EPZ's site. By focusing on this location, the minister anticipates the integrated assessment and the draft preferential decision that will be taken in the project procedure in mid-2025. If another location is identified in the project procedure, part of the technical feasibility studies will have to be carried out again. The minister is knowingly taking this – in his view – limited risk because in his opinion a large part of the results of the technical feasibility studies is also representative of other locations that will be included in the project procedure, including Maasvlakte I. The studies provide insight into the costs and timeline, safety conditions and licensability, spatial integration and other technical conditions involved in the possible construction of two new reactors. The technical feasibility studies, together with the market consultation, will indicate the necessary conditions to realise the new construction project. 

The technical feasibility studies started in January 2024. The final reports are expected in the autumn of 2024. 

First phase project procedure

On 22 February 2024, it was announced that the Intention and Proposal for Participation (VenP) had been made available for inspection. The VenP describes the intention to build new nuclear power plants and explains the procedure to be followed. The VenP comprises the first step of the project procedure to be followed for the planning designation of a site where nuclear power plants can be built (Article 9b(1)(c) of the Electricity Act 1998). In a project procedure, a step-by-step approach is taken towards a preferential decision (in the Exploratory Phase) and a project decision for the actual spatial incorporation of the new nuclear power plants (in the Planning Implementation Phase). The procedure consists of different phases. The exploration phase is the phase on which the minister is currently focusing. As part of this phase, the VenP was drafted and the minister commissioned an update of the safeguard policy. These documents show that, in terms of locations, the minister is focusing on the safeguard areas Borssele/Vlissingen and Maasvlakte I (Eemshaven has been dropped as a safeguard location).

The minister is expected to adopt a so-called Note Scope and Level of Detail shortly after the summer, in which he will decide on the locations to be studied. He believes the draft preferred decision will be made in the second quarter of 2025. This decision will be prepared through an Integrated Impact Study and a plan environmental impact assessment (EIA). The final preferred decision will follow after an opinion from the EIA committee and consideration of any views.

State-Region Package

As stated above, the State-Region Package is a new working track within the first phase. In this package, the minister wishes to enter into phased agreements between the state and the region on the preconditions under which the nuclear power plants can be constructed, so that the quality of the living environment can be preserved. The municipality of Borsele and the province of Zeeland have set up their own participation procedures in recent months. The outcome of these procedures is that both the municipality and the province have set conditions. The minister stated that – when there is more clarity on the location of the new nuclear power plants – he will indicate how the conditions can be met. 

Setting up a project organisation

Besides implementing the various working tracks, the minister is also setting up a project organisation. This project organisation will prepare the tender, enter into the contract with the technology provider, and apply for the necessary licences. To accomplish this task, the organisation will need to have an independent legal status in addition to sufficient capable staff. This will require fundamental choices to be made over the next two years on how to set it up and on the government's role in it. A letter of the minister dated 28 March 2024 shows that an important consideration is whether a private company will become the project organisation instead of a government participation. The establishment of a participation by the central government will in any event require a sound justification, depending on the chosen form. A policy participation owned by a line ministry could be among the possibilities.

The minister will send a letter at the end of the second quarter in which the possibility of participation by the state will be addressed in more detail. 

Further ambitions: two additional large-scale nuclear power plants 

In conclusion, the minister anticipates the adopted motion for two additional large-scale nuclear power plants by noting that such an addition will require a new project procedure and additional spatial policy. A revision of the safeguard policy will then be needed, including associated environmental impact studies (including a Plan Environmental Impact Assessment). Additional power plants cannot be built in the same guarantee areas, in light of issues such as the availability of cooling water, capacity on the grid, and support in the region. This requires a thorough process in which regional and local interests and environmental effects must also be carefully considered. 

Final observations

Preparations for the two new nuclear power plants are in full swing with the start of the first phase. As we pointed out in our earlier two blogs, several (legal) challenges are likely to arise during these preparations. In this blog we want to mention the capacity of Zeeland's high-voltage grid again. As the power grid is congested, the minister has asked TenneT (the operator of the national high-voltage grid) to map out whether the two new large-scale nuclear power plants can fit into the grid. Tennet concludes that this will not be easy. Only one large-scale nuclear power plant (1.6 GW) will be possible, under strict conditions. One of those conditions is that there will be no new connections for offshore wind energy in Zeeland in addition to the existing plans from the Ministry of Economic Affairs' Offshore Wind Energy Development Framework. In a letter dated 29 February 2024, the minister noted that, for the analysis carried out, TenneT calculated only the year 2035 and that, in addition, there are inherent uncertainties due to model choices, scenarios and assumptions. TenneT has therefore been asked to map the period beyond 2035 as well. Studies such as this will have to show whether the desire for two nuclear power plants can be put into practice.