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Buying a future for nuclear – EU Commission proposes new state aid for new nuclear

Nuclear Monitor Issue: 
Patricia Lorenz - nuclear campaigner with Friends of the Earth Europe and GLOBAL 2000 / FoE Austria

Since Spring the EU Commission has been preparing a review for state aid rules, and in Summer a leaked draft caused a shock, mainly in German speaking media. The governments of Austria and Germany made clear they are opposed to state aid proposals, but only Austria handed over a statement of opposition. Denmark took a negative stance at the energy summit in May, and German Chancellor Merkel is clearly against it – at least in German media, at least before elections on September 22.

Under EU law state aid is forbidden, unless allowed according to a very complex system. One exemption from the ban on state aid is based on environmental protection in the EU Treaty. This made the so-called block exemption for renewables possible, when different national systems introduced the new technologies for producing energy using wind or sun as fuel into the market. The current plan for the new environmental and energy guidelines for 2014−2020 constitutes a major change by introducing a technology-neutral approach, based on carbon only and recognising nuclear alongside renewables as a viable solution to climate change. A change of those rules − which was pushed forward mainly by UK, Czech Republic and France − would have very practical implications.

The experience of past years has proved that nuclear power plants cannot be built without subsidies. This is now acknowledged by those states who called for the freest of all markets − in the UK this is nuclear power project Hinkley Point C and Temelin in the Czech Republic and all other potential plants which might be under consideration (Poland, Hungary).

The Czech nuclear power project Temelin 34 is directly depending on the possibility of direct subsidies. After years of hammering that nuclear is cheap and will be only market based and without any public subsidies, the strategy changed. For the past months the two-third state-owned utility CEZ is officially in negotiations to find a way the Czech government will guarantee fixed feed-in tariffs for the new units "at least for a while after operation started" as they like to add. In numbers this is 30 years, the model being copied from the UK, the strike price model, which is currently under negotiation between EdF and the UK government.

The current review of the guidelines for environmental and energy state aid is a precondition, because the EU Commission has to agree to this extreme form of state aid consisting of a guaranteed minimum feed-in price for nuclear for 30–40 years. Energy Commissioner Oettinger calling this idea "Soviet" says it all.

While the EU Commission is hiding behind the fact that the paper leaked is only a draft and up for discussion, a look at the draft itself shows that it is clearly pro subsidy of nuclear and obviously added the EURATOM Treaty (compared to earlier drafts) as an argument:

"Insofar as these Guidelines set out rules on state aid for nuclear, the assessment under the TFEU will take due account the objectives of the Euratom Treaty. …

6.2 Aid to nuclear energy:
(157) Pursuing the development of nuclear energy, in particular by facilitating investment in nuclear energy, is an objective covered under Article 2(c) of the Euratom Treaty and therefore the Commission does not question that such support measures are aimed at a common EU objective."

Timing and Action
GLOBAL 2000 / FoE Austria will start the following activities via the relaunched campaign site in early September: A petition open for signatures by citizens emailed to all EU Commissioners, because it is them who decide and only them. Not only the networks usually involved, but a much broader involvement of political players is under preparation.

As soon as DG Competition starts the last consultation on this review – not earlier than September 22 because Germany obviously asked to have it postponed until after national elections – we will inform about the start and provide a statement people can send as a contribution against the EU plan of giving nuclear a lifeline via state funding. The website will be regularly updated with press releases and key info. A new legal analysis on state aid for nuclear will be published in September and in November the phase-out nuclear power in Europe study. Though the new guidelines should be in force by 1 January 2014, most likely the decision will not be taken by the EU Commissioners until next year.


Global 2000