- PME, the €55.6bn pension scheme for the technology industry, wants to invest in the four nuclear power plants.
- The pension fund’s members overwhelmingly support PME investing in nuclear energy.
PME, the €55.6bn pension scheme for the technology industry, wants to invest in the four nuclear power plants the new Dutch government intends to build. According to PME president Eric Uijen, the pension fund fears that the energy transition in the Netherlands cannot be completed without nuclear energy.
“The energy transition in the Netherlands is not going fast enough. In order to get to a carbon-neutral energy system, we also need nuclear energy,” Uijen told television show Nieuwsuur last week.
Speaking to IPE, Uijen said PME started its “internal thinking” about investing in nuclear energy about six months ago as political support for the controversial energy source was building.
“The previous government already wanted two nuclear power plants; the new one [government] even aims to build four. So there is political support for nuclear power, and people are very keen for us to contribute to it as a pension fund,” he added. “Many civil servants and politicians have asked us about it in recent months.”
Ironically, these same Dutch politicians have recently criticised PME. They accused the pension fund of “activist investing” because of its decision to divest from fossil fuels and focus on renewable energy investments.
“In fact, you can consider investing in nuclear power as an activist as well,” Uijen noted. But now you don’t hear those politicians because they are generally in favour of nuclear energy. According to us, this step proves that we are not activists but that we judge every investment on its merits.”
The pension fund’s members overwhelmingly support PME investing in nuclear energy. In a survey the pension fund conducted this year, 63 per cent of members agreed, while only 16 per cent disapproved.
“The majority of our members have a positive basic attitude toward nuclear energy. However, there are concerns about nuclear power plants’ returns, risks, and safety and the problem of radioactive waste, especially among retirees,” said Uijen.
The widespread support for nuclear energy may also be explained by the fact that several companies in the sector PME caters for are involved in producing raw materials for nuclear energy.
“For example, one of our employers is developing a gas centrifuge technology for enriching uranium, which is used for nuclear fission. As a result, our participants may have more affinity with nuclear energy than the average Dutch,” Uijen noted.
However, PME has a range of demands before agreeing to a possible nuclear investment. “State participation is absolutely necessary to manage the risks involved. In addition, we have a preference for the Regulated Asset Base (RAB) model, which allows us to make a return on investment already during the construction phase,” according to Uijen.
The RAB model allows for returns before the completion of a project by placing a small levy on customers’ bills, based on the assumption that they will benefit from much cheaper electricity once the new nuclear power station is operational. Finally, a fixed electricity price is also necessary for a nuclear power investment to be viable, he said. Regarding the kind of investment, PME has “an initial preference” for debt financing.
He added, “For a standard equity investment without additional guarantees, the risks are too high, said Marcel Andringa, PME’s chief investment officer. “Elsewhere in Europe, you see that the construction costs of nuclear power plants are always much higher than budgeted.”