Lawyers working with the campaigning group Energy Fair say that some existing and proposed new subsidies for nuclear power in the UK may be unlawful under EU laws designed to promote fair competition between businesses. A formal complaint about those subsidies is now being prepared for submission to the European Commission.
The law firm BBH is working with Energy Fair in preparing the formal complaint to the European Commission. The legal team is led by Dr Dörte Fouquet. She is a senior partner in the firm and is also Director of the European Renewable Energies Federation.
The planned action by Energy Fair, to make a formal complaint to the European Commission about subsidies for nuclear power, is endorsed by the following people and organizations: Tom Burke CBE, Campaign for Nuclear Disarmament, Eurosolar, Jean Lambert MEP, Caroline Lucas MP, Nuclear Free Local Authorities, Michael Meacher MP, People Against Wylfa B (PAWB), Jonathon Porritt CBE, Dr Jeremy Leggett and Solarcentury, Sortir du Nucléaire, Keith Taylor MEP, and Urgewald.
“Our research is in line with what others have been saying” says Dr Gerry Wolff, Coordinator of the Energy Fair group. “MPs have already raised concerns about provisions in the recent Finance Act that will produce windfall profits for the nuclear industry. The Government itself says that the industry will benefit by £50 million per year, and calculations by WWF and Greenpeace show that the subsidy could be as much as £3.43 billion between 2013 and 2026”.
Forms of support for nuclear power
Research by the Energy Fair group has identified 9 existing or proposed subsidies for nuclear power and 2 potential subsidies. Withdrawal of any one of them, via legal or political action, is likely to make new nuclear power plants uncompetitive.
They are described in the reports “Nuclear Subsidies” and “Subsidies for nuclear power in the UK government’s proposals for electricity market reform” and they are summarised here:
• Limitations on liabilities: The operators of nuclear plants pay much less than the full cost of insuring against a Chernobyl-style accident or worse.
• Underwriting of commercial risks: The Government necessarily underwrites the commercial risks of nuclear power because, for political reasons, the operators of nuclear plants cannot be allowed to fail.
• Subsidies in protection against terrorist attacks: Because protection against terrorist attacks can only ever be partial, the Government and the public are exposed to risk and corresponding costs.
• Subsidies for the short-to-medium-term cost of disposing of nuclear waste: In UK government proposals, the Government is likely to bear much the risk of cost overruns in the disposal of nuclear waste.
• Subsidies for the long-term cost of disposing of nuclear waste: With categories of nuclear waste that will remain dangerous for thousands of years, there will be costs arising from the dangers of the waste and the need to manage it. These costs will be borne by future generations, but they will receive no compensating benefit.
• Underwriting the cost of decommissioning nuclear plants: In UK government proposals, the Government is likely to bear much the risk of cost overruns in decommissioning nuclear plants.
• Institutional support for nuclear power: the UK government is providing various forms of institutional support for the nuclear industry.
• Exemption from tax. Uranium is exempted from the tax on fuels used for the generation of electricity.
• Feed-in tariffs with contracts for difference. Although it is a mature technology that should not need subsidies, nuclear power would be eligible for the same system of subsidies as is proposed for renewable sources of power.
• Capacity mechanism. The UK government’s proposals for a ‘capacity mechanism’ as a backstop for the power supply system are not yet finalised. However, there is potential for the proposed mechanism to be used to provide unjustified support for nuclear power.
• Emissions Performance Standard. Although nuclear power emits between 9 and 25 times more fossil carbon than wind power, it appears that the effect of the proposed new standard would, for the foreseeable future, be to lump them together as if they were equivalent in their carbon emissions.
The nuclear subsidies are described in the reports “Nuclear Subsidies” and “Subsidies for nuclear power in the UK government’s proposals for electricity market reform” available at:
Source: Pressrelease Energy Fair, 7 November 2011
Contact: Dr Gerry Wolff PhD CEng, Coordinator, Energy Fair, 18 Penlon, Menai Bridge, Anglesey, LL59 5LR, UK.