Nuclear subsidy bad for Scottish renewables say environmentalists

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Tuesday, 19 March 2013 20:47

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  By Martin Kelly

The UK government’s decision to earmark billions to new nuclear power is threatening Scotland’s renewables industry according to Friends of the Earth Scotland (FoE Scotland).
 
The campaign group has claimed that despite a pledge not to subsidise the nuclear industry, the UK Coalition has now committed £50bn from households in order to satisfy demands from French contractor EDF.

The attack from FoE Scotland follows an announcement from UK Energy Minister Ed Davey who has confirmed approval for a new nuclear plant to be built at Hinkley Point, Somerset.  Mr Davey described the decision to go ahead with the £14bn nuclear plant as “of crucial national importance”.

“I am confident that the planning decision I have made is robust, evidence-based, compatible with the Energy National Policy Statements and is in the best interests of the country,” Mr Davey said.

However the decision, which will cost more than the London Olympics, was met with anger from Green campaign groups who claimed it would mean householders paying bills effectively set by EDF for forty years in order to pay the company a guaranteed levy.

Commenting Dr Richard Dixon, Director of Friends of the Earth Scotland, challenged the Lib Dem MP’s claim that it was best for “the country”:

“There is no doubt that the UK Government’s ideological fixation with too little, too late, too expensive nuclear will damage Scotland’s renewables industry.  The government promised there would be no subsidy for nuclear, now they are committing £50bn from the fuel bills of generations to come.

“The industry told us they could build reactors for £2bn, now the price tag is £14bn for two.  Building new nuclear plants in the UK is going divert to money and political will away from energy efficiency and renewable energy at just the time when we need to develop these to reduce carbon emissions and reduce people’s bills.

“There are only two reactors being built in Europe, and both are billions over budget and years late.”

The UK government’s nuclear policy suffered a series of blows after the nuclear disaster in Fukushima as several companies originally interested in building new nuclear plants pulled out.  New safety restrictions imposed on the industry after Fukishima meant some were unwilling to commit to the new builds after costs increased.

Last month power giant Centrica, which owns British Gas, announced its withdrawal from the UK’s nuclear development programme due to delays and escalating costs.  The decision coincided with revelations that the cost of cleanup at Sellafield had reached £67bn.

The company had been in line to take a twenty per cent stake in four new reactors to be developed in partnership with French state-owned utility company EDF Energy.  The consortium had expected to build two new reactors at Hinkley point in Somerset and two more at Sizewell in Suffolk.

Two German utilities E.On and RWE had also been bidding to build new nuclear reactors in the UK, at Anglesey and Bristol, but pulled out last October following the nuclear disaster at the Fukushima plant in Japan.

Unlike countries such as Germany or Switzerland which have decided to phase out nuclear power after Japan’s Fukushima crisis, the UK government is counting on new nuclear power in its energy mix for future decades.

French owned EDF demanded guarantees from UK Ministers that they would be allowed to set prices at a level that guaranteed a profit.  The energy giant is currently negotiating with UK Ministers in order to reach agreement that will last for decades on what it can charge for the electricity the plant will generate.

Dr Dixon said even with the lucrative agreement in place, the enormous cost of the Hinckley Point plant would have worrying implications for other older plants in Scotland.

He added: “EDF has held the UK Government to ransom to get this incredible subsidy, but even with this and their backing from the French state they will be stretched to breaking point trying to build these reactors in Somerset.

“We need to start worrying what corners EDF will try to cut at Torness and Hunterston to try to make the books balance over the next decade, as Hinkley Point absorbs more and more of their money and attention.”

Despite concerns over the costs involved and the damage to the renewables industry, the decision to commit £billions to nuclear has been welcomed by the Labour party, with Shadow Energy Minister Caroline Flint saying: “Today’s announcement is an important milestone in the development of new nuclear build in the UK,”

Greenpeace executive director John Sauven said: “It will lock a generation of consumers into higher energy bills, via a strike price that’s expected to be double the current price of electricity, and it will distort energy policy by displacing newer, cleaner, cheaper technologies.

“With companies now saying the price of offshore wind will drop so much it will be on par with nuclear by 2020, there is no rationale for allowing Hinkley C to proceed.”

The deal being negotiated by UK Ministers will allow EDF to set a price for their electricity that will guarantee a minimum profit for the company.  The levy imposed by EDF will be added to household electricity bills and is expected to stay in place for decades.

However concerns have already been raised by the EU over the legality of such a move with some industry experts claiming it contravenes EU competition law.  According to insiders, the European Commission is due to launch an investigation into nuclear subsidies in a move that could delay the UK nuclear programme for years.

Last month it emerged that taxpayers were already partly subsidising the industry with the revelation that at least 15 people working for the nuclear energy industry or its consultants have been seconded to UK Government departments responsible for policy or regulation.

Doubt also surrounds the Hinckley project with EDF still unable to find a business partner willing to join it in the UK venture.

Secret EC Lobbying

Last Sunday it emerged that the boss of the company in charge of the Hinckley C project had secretly lobbied the European Commission in an attempt at curtailing financial support for renewables and instead diverting the money into nuclear.

In November, Areva’s chief executive officer, Luc Oursel, lobbied the European Environment Commissioner, Connie Hedagaard, for financial help for the construction of new nuclear power stations.  Mr Oursel also called for the “progressive removal” of “a stack of ad hoc tariff distortions” – such as “subsidies for renewables [and] energy poverty”.

EDF Reactor Concern

There is also concern over the design EDF is expected to use in the Hunkley C plant.  The project in Somerset will house two European Pressurised Water Reactors (EPRs), adjacent to an existing nuclear station also run by the company.

Last week the French company failed in its bid to find a partner for a similar venture in the USA.  The US Nuclear Regulatory Commission (NRC) denied an appeal by UniStar, wholly owned by EDF, for a third reactor at the Calvert Cliffs nuclear power plant site on the Chesapeake Bay in Maryland.

EDF had hoped to build an EPR, but the new, untested design, already has a lamentable history in Europe and has been described as “risky” and “dangerous” with design and construction defects plaguing construction.

EPR reactors under construction in Flamanville, France and Olkiluoto, Finland, are years behind schedule and enormously over-budget and the design has been challenged by safety authorities.