Energy Policy 140 (2020) 111449 Available online 30 March 2020 0301-4215/© 2020 Elsevier Ltd. All rights reserved. Coexistence of nuclear and renewables in the V4 electricity system: Friends or enemies? Andr� as Mez} osi , Bal� azs Felsmann , Lajos Kerekes , L� aszl� o Szab� o * Corvinus University of Budapest, Regional Centre for Energy Policy Research, 1093, Budapest, F} ov� am t� er 8, Hungary A R T I C L E INFO Keywords: Nuclear energy Renewables Energy modelling Scenario assessment ABSTRACT The paper examines the interactions between nuclear and variable renewable generation capacities (vRES) under various assumptions in the broader V4 region. Four exploratory scenarios are analysed with high and low penetration levels of vRES and nuclear applying electricity dispatch and unit commitment models. The assess- ment quantifes the impacts of the joint evolution of these technologies, measuring the effect on utilisation rates, wholesale prices, market values of vRES, energy not supplied (ENS) and the changing production and trading patterns in the projected 2035 electricity system. The results are indicative of a ‘double competition’ between (i) nuclear and vRES technologies within the merit order and (ii) between the NPPs in the region. If the ambitious V4 nuclear plans are indeed execute, NPPs will compete for limited export opportunities during times of high vRES production periods. Thus, coordination of long term energy policies within the V4 region is critical to manage nuclear and vRES developments and trade patterns with the aim of improving fexibility and security of supply to mitigate the negative economic impact on the electricity system. 1. Introduction Construction of new nuclear power plants (NPPs) in the post- Fukushima world is challenging not only because of heightened safety requirements and public backlash but the economics of such massive investments vis-� a-vis rapidly falling costs of variable RES (vRES: wind and solar). Variable RES and nuclear are frequently seen as rival tech- nologies due to the fact rising vRES installations require a more fexible decentralised system, while the traditional operation (and the prevailing fnancing model) of nuclear is a baseload profle. This paper investigates the parallel development of nuclear and vRES in the V4 and recom- mends proactive policies that can reduce the adverse effects on the regional electricity systems - namely increasing interconnection capac- ities between countries with low levels of net transfer capacities (e.g. Poland) and promoting more market oriented and fexible operation of vRES technologies. Several studies have contributed to evaluating the myriad of risk factors facing nuclear power development in the post-Fukushima era. While the literature differentiates many different types of risks in nu- clear developments e.g. fnancial, market, safety, proliferation risks, this paper will focus on the fnancial and market components. Market risks of NPPs derive due to the changing market conditions (prices, demand and export positions), which determine the operation hours and income of nuclear plants. Financial risks of NPPs arise mainly in the development phase, as due to the large size of investments, fnancing their con- struction have high risk characteristics. More specifcally, the paper compares these risks in the presence of vRES technology in the V4 re- gion, which remains a pro-nuclear bloc at a time when several EU Member States are cancelling nuclear plans and phasing out existing nuclear feets. In the region energy security is a political priority asso- ciated with dependence on Russian natural gas, but diversifying elec- tricity supply with the addition of renewables and nuclear can improve the position of the region vis-� a-vis Russia. The V4 region herein (later called in the paper V4þ) extends to Bulgaria and Romania besides the offcial V4 countries of Czech Republic, Hungary, Poland and Slovakia due to their strong connections to the Central and Eastern European electricity system. Four exploratory scenarios are used to quantify the joint evolution of these technologies, measuring the effect on utilisation rates, wholesale prices, market values of vRES, energy not supplied (ENS) and the changing production patterns in the projected 2035 electricity sector portfolio. The paper is structured as follows. A literature review of vRES and NPP integration includes recent studies on the market risk mitigation * Corresponding author. E-mail address: lszabo@uni-corvinus.hu (L. Szab� o). Contents lists available at ScienceDirect Energy Policy journal homepage: http://www.elsevier.com/locate/enpol https://doi.org/10.1016/j.enpol.2020.111449 Received 31 May 2019; Received in revised form 10 January 2020; Accepted 19 March 2020