Will Nuclear Subsidies Derail a Renewable Europe?

April 7, 2014


Climate deniers often claim to be against subsidies that “pick winners” among different energy options. They are often conspicuously silent when those subsidies go to the nuclear industry.  History has shown that nuclear power cannot exist without massive infusions of public money, and guarantees of profit from taxpayers and ratepayers.  The danger is, this energy is so expensive it may crowd out other options.

Climate News Network:

LONDON, 7 April – The United Kingdom’s plans to build heavily subsidised nuclear power stations have come under withering attack from a coalition of Members of Parliament, academics, energy industry experts and environmental groups.

Evidence has poured into the European Commission, which is investigating whether the deal with the giant French nuclear company EDF breaks EU competition rules. The evidence from many objectors, whose submissions had to be made by today, claims that if the contract goes through it will wreck Europe’s chance of building up renewable energies to avert the worst impacts of climate change.

They say renewables will have to compete in an unfair market where one generator, nuclear, is guaranteed to be able to sell all its electricity at a stable price and with a built-in profit until 2058.

The UK Government has agreed a minimum price of £92.50 (US $153) a megawatt hour from a new nuclear power station at Hinkley Point in the west of England from 2023 – roughly double the existing price of electricity in Britain. The price will rise with inflation and runs for 35 years, a deal unprecedented in the energy sector, and not available to renewable energies like wind and solar. The guarantee will continue for all future nuclear stations too.

The Government has gone further, guaranteeing loans for construction, and providing insurance and compensation payments if policies change for any reason. It claims that the deal will save £75 a year on the average consumer’s bill if electricity prices rise by 2023, as it forecasts. If they do not, then consumers will be paying far more for their electricity than they would otherwise.

EU test case

No-one involved in the investigation into whether the deal constitutes unfair state aid doubts that climate change is a severe threat and needs to be tackled. The argument is about which is the best set of technologies to help deal with the problem.

There are 12 states in Europe interested in nuclear power generation, slightly under half the EU’s members. All see the UK subsidies investigation as a test case into whether they also will be able to give state aid to nuclear stations.

One of the submissions, from the Nuclear Consulting Group, with more than 100 signatures from MPs from six parties in the UK and European Parliaments, plus engineers, academics and energy experts, says the proposed aid to guarantee nuclear’s profitability is incompatible with EU State Aid rules. The NCG says it unfairly discriminates in favour of nuclear and will damage renewable energies with far greater potential.

Given that this level of support is unavailable to other low carbon technologies, it is certain to significantly distort competition and strongly affect trade between member states.

“The development of sustainable and affordable low carbon energy remains a growing economic sector with huge potential for job creation. To seek to delimit this diversity through particular State Aid support of nuclear power at the expense of other, potentially more flexible, safe, productive, cost-effective and affordable technologies seems, at the very least, unwise,” says the submission.

It says the British Government has also not been completely honest about the prospects for existing nuclear power stations. In its announcement about subsidies the Government claimed that all but one of the eight existing nuclear power stations were due to close about the time the new Hinkley Point plant is finished in 2023.


In fact EDF, which owns the plants, and is also building the new one, intends to keep them open until 2030 or even longer if safety conditions allow. If the Government’s current power station-building plans succeed, then more than 50% of Britain’s electricity would be generated by subsidised nuclear stations, effectively cutting out renewables.

Delays and cost over-runs

One big problem for the UK’s plans, apart from the European Commission inquiry, is that the building schedule for the European pressurised water reactors (EPRs) planned for Hinkley Point, and for Sizewell in eastern England, is in doubt.

The first two prototypes, under construction in Finland and France, are subject to severe construction delays and cost over-runs. The Finnish Olkiluto 3 EPR was due to be completed in 2009 at a fixed price of €3 billion (US £4.1 bn), but the cost has now escalated to €8.5 bn and completion has been put back to 2018. The French new build by EDF at Flamanville is already four years behind schedule and the cost has more than doubled to €8.5 billion.

Other groups objecting to the UK subsidy plan also say that rather than promoting a diversity of supply, as ministers claim, the decision to back nuclear will reduce the scope for other technologies.

Bad value

Friends of the Earth says that currently there are seven to ten viable renewable energies being developed in the UK, among them wind on and off shore, solar, biogas, wave, under-sea turbines, small-scale hydro, biomass, and hot rocks, all of which could contribute to the energy mix if nuclear had no guaranteed unfair advantage.

These were all comparatively new technologies, where the price of generation was coming down all the time. In contrast, FoE says, nuclear has been operating for 60 years and still requires a 35-year price guarantee.

By the time Hinkley is in operation, solar and on-shore wind will be far cheaper, with costs falling fast, and it is likely that offshore wind will be in a similar position. The nuclear subsidy “represents extremely bad value for money for UK citizens,” the submission concludes.



77 Responses to “Will Nuclear Subsidies Derail a Renewable Europe?”

  1. Reprocessing, breeders, low/ high level wastes.
    “The reprocessing option has the immediate disadvantage of producing larger volumes of “low level” radioactive waste even though it can reduce somewhat the volume of high level waste. ”

  2. Japan replaced its nuclear generation with natural gas and conservation, not coal. It is too short time for new coal plants to come online.
    More surprising is how far off pundits were about the impact. Some made dire predictions about the need to replace the nuclear fleet with “cheap coal” (a myth we debunked here). A combination of commonsense energy savings measures that began as temporary behavioral changes have led to permanent efficiency gains. In the process, the Japanese people, and its business community, proved the punditry wrong.

    The key lesson from the Japanese experience is that coal plant construction is simply too slow to be relevant in the modern world, where resiliency is highly valued. To cope with rapid loss of generation capacity, Japan needed fast, nimble and modular 21st-century solutions. That means efficiency and clean energy. Despite major hurdles to deploying these solutions — mostly due to a complete absence of renewable energy policies prior to Fukushima — solar power surged in 2013, blowing away earlier predictions.


    “Well maybe they couldn’t ramp up fast, but they must be planning a wave of new coal plants now, right? Nope. According to the World Resources Institute, Japan only has plans to build four new plants totaling 3.2 gigawatts. 50 percent of this capacity is scheduled for commissioning soon, but the other half (1.6 gigawatts (GW)) is not even supposed to be commissioned until the next decade. One 600 MW unit is not slated to even start construction until 2015 meaning, at best, it won’t be online until 2020. Another 1,000 MW project, which has been on the drawing boards for years, has a commissioning date of 2023 “or later.” But even if all of it were to come online next year it is only about 1 percent of total electricity capacity in Japan. So much for the hype.”

  3. […] that main stream nuclear industry is “biased” against alternatives because they fear being “frozen out”. Indeed they will even claim that the failure of such experiments on these alternatives back in […]

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