As the months slip by, the optimism drains away that the UK government will make good on its pledge to build eight new nuclear stations.
LONDON, 15 June – The British government’s promise not to subsidise new nuclear power stations in the UK looks set to torpedo its own stated energy policy which is to build a range of new reactors to keep the lights on.
Ministers have been in negotiations with the French state-owned giant EDF for more than a year, trying to strike a deal that does not look like a subsidy but guarantees a price for electricity for 40 years – big enough to give investors a return on capital to make building the first two new nuclear stations a worthwhile venture.
The government’s pre-election promise was to encourage low carbon energy production, to reach ambitious carbon dioxide emission reduction targets and so become “the greenest government” the UK has known.
New generation capacity is needed to keep the lights on in Britain as several “dirty” coal fired stations are being closed because of European Union regulations and some old nuclear stations are nearing the end of their lives.
The problem is that nuclear power continues to get more expensive while renewable costs fall. The price that EDF is reported to be insisting on would provide a bigger subsidy than is paid to wind and solar power.
This would make nuclear the most expensive energy in the UK and tie the British consumer to high bills for generations to come. Consumers would in effect be paying a nuclear energy tax.
A formal announcement to start work on the first new nuclear build in Britain in more than 25 years has been repeatedly delayed – and the proposed finishing date of the first reactor has already unofficially slipped from 2017 to 2022 before the first concrete has been poured. With the delays new nuclear stations already under construction are experiencing in Finland and France, even this looks optimistic.
While negotiations drag on between the government and EDF, the European Union and members of parliament in the House of Commons are investigating the proposed subsidies to be paid to nuclear power. The reason is that “mature” industries like nuclear are banned under European competition rules from being given subsidies because it is classed as “unfair competition.”
Cannot go bankrupt
The Environmental Audit Committee, made up of MPs of all the UK’s political parties, has been taking evidence on “Energy Subsidies in the UK” to try and work out which form of generation is best value for money for consumers.
There is evidence before the committee that the lights can be kept on using renewables, wind, solar, biomass and half a dozen other technologies without resorting to nuclear power. But the inquiry is also an opportunity for the gas industry and others to have a go at the subsidies for renewables like wind and biomass.
Some witnesses concentrate only on both the existing and proposed subsidies to nuclear power. Dr Gerry Wolff, representing a think tank called Energy Fair, said nuclear energy already had seven kinds of subsidy. If they were withdrawn, the price of nuclear electricity would rise to at least £200 a megawatt hour.
This is compared with the next most expensive form of low carbon energy, offshore wind at about £140 a megawatt hour. The UK has more offshore wind turbines than any other country and plans more with the cost expected to continue to fall as time passes.
Nuclear subsidies include the state underwriting the cost of a nuclear accident so the industry does not pay the full cost of insurance or pay for protection against terrorism, Dr Wolff says.
He also points out that, as happened 10 years ago when the price of electricity fell below the cost of production, nuclear power is insulated from going bankrupt. The industry is too important in preventing politically unacceptable power cuts to be allowed to fail and would always be bailed out by the government. This is a commercial security no other power company has.
The biggest subsidy, according to the Energy Fair evidence, is the cost of dealing with nuclear waste and dismantling nuclear stations. This is a vast and although ultimately spread over centuries, and therefore cannot be quantified, mostly falls on the consumer and taxpayer, not on the company.
Dr Wolff says: “Renewables have a clear advantage on cost, speed of construction, security of energy supplies, and effectiveness in cutting emissions of carbon dioxide. Subsidies for nuclear power have the effect of diverting resources away from techniques and technologies which are cheaper than nuclear power and altogether more effective as a means of meeting our energy needs.”
The European Union Commission inquiry is politically complex. The British government’s point is that nuclear is a low carbon form of electricity production and should be treated as a renewable. This has never been the case in Europe and there is powerful opposition to this idea in Germany and other EU states that have decided that nuclear power is not for them.
As each week passes and no decisions are reached on this variety of issues, delays and therefore nuclear costs continue to mount making the dawn a new nuclear age in the UK seem as far away as ever. – Climate News Network.