A formal complaint about subsidies for nuclear power has been sent to the European Commission (DG Competition). If it is upheld, it unlikely that any new nuclear power stations will be built in the UK or elsewhere in the EU. The complaint may be followed by legal action in the courts or actions by politicians to reduce or remove subsidies for nuclear power.
The complaint to the European Commission about subsidies for nuclear power has been prepared by lawyers for the Energy Fair group, with several other environmental groups and environmentalists.
Research by the Energy Fair group has identified 7 existing subsidies for nuclear power and at least 2 potential subsidies. They are summarised in “Forms of support for nuclear power”(*1). One of the largest subsidies in the complaint is the low cap on liabilities for nuclear accidents. “Like car drivers, the operators of nuclear plants should be properly insured” says Energy Fair. A report by the Insurance Forum, Leipzig (“Calculating a risk-appropriate insurance premium to cover third-party liability risks that result from operation of nuclear power plants”)(*2), a company that specializes in actuarial calculations, shows that full insurance against nuclear disasters would increase the price of nuclear electricity by a range of values -- Euro 0.14 per kWh up to Euro 2.36 per kWh -- depending on assumptions made. Even with the minimum increase, nuclear electricity would become quite uncompetitive. Without the other subsidies for nuclear power, it would be even more expensive. Counting only the Three Mile Island disaster in 1979, Chernobyl in 1986 and Fukushima in 2011 -- and excluding the near-disasters at the Narora nuclear plant in India in 1993, the Davis-Besse plant in Ohio in 2002, and the Forsmark plant in Sweden in 2006 -- we are averaging one nuclear disaster every 11 years
In summary, the “grounds of complaint” are:
* That the so-called “carbon price floor”, introduced in the Finance Act 2011, is a de facto tax on fuels used for the generation of electricity and that the exemption of uranium from that tax is incompatible with EU state aid rules, Articles 107 and 108 of the Treaty on the Functioning of the European Union (TFEU).
* That the cap on liabilities for nuclear accidents of the Paris/Brussels Conventions constitutes state aid in the sense of Article 107 of the TFEU. Since Article 351 of the TFEU requires EU Member States to adapt and align their pre-existing Treaty obligations to be compliant with EU law, since relevant UK laws have not been amended in the light of that requirement, and since the cap on liabilities has not been notified to the European Commission, it is, technically, illegal under EU law.
* That the proposed cap on liabilities of nuclear operators for the disposal of nuclear waste falls under the definition of state aid in Article 107(1) of the TFEU; that, unless or until it is notified to the Commission, it is illegal under EU law; and that, since the measure cannot be justified (Article 107(3) of the TFEU), it should not be approved by the Commission and should not enter into force.
* That the proposed “feed-in tariff with contracts for difference”, as applied to nuclear power, is, under Article 34 of the TFEU, a measure having an effect that is equivalent to “quantitative restrictions on imports” and is thus contrary to EU law.
Caroline Lucas, MP for Brighton Pavilion and leader of the Green party of England and Wales, said: “The Government’s planned Electricity Market Reform is set to rig the energy market in favor of nuclear -- with the introduction of a carbon price floor likely to result in huge windfall handouts of around £50m (US$ 78,5 mln or 60 mln euro) a year to existing nuclear generators. Despite persistent denials by Ministers, it’s clear that this is a subsidy by another name, which makes a mockery of the Coalition pledge not to gift public money to this already established industry. If these subsidies are found to be unlawful, I trust the European Commission will take action and prevent the UK’s nuclear plans from seriously undermining the shift towards new green energy.”
Dr Dörte Fouquet, the lawyer who has been leading the preparation of the complaint, said: “The European Union has opted for opening up the energy market and is vigilant about creating a level playing field. In this regard, the Commission over the last years repeatedly underlined that distortion of the market is to a large extent caused by subsidies to the incumbents in the energy sector. This complaint aims to shed some light on the recent shift in the energy policy of the United Kingdom where strong signals point to yet another set of subsidies to the nuclear power plant operators.”
“There is no justification of any kind for subsidising nuclear power” says Dr Gerry Wolff of Energy Fair. “It is a mature technology that should be commercially viable without support. Renewables have clear advantages in cost, speed of construction, security of energy supplies, and effectiveness in cutting emissions of CO2. There are more than enough to meet our needs now and for the foreseeable future, they provide diversity in energy supplies, and they have none of the headaches of nuclear power.”
*1: The Energy Fair group report “Forms of support for nuclear power” is available at: www.mng.org.uk/ns
*2: The report by the Insurance Forum, Leipzig is available at: www.mng.org.uk/gh/private/20111006_NPP_Insurance_Study_Versicherungsfore....
Source: Energy Fair, News release, 19 January 2012
Contact: Energy Fair, Dr Gerry Wolff PhD, 18 Penlon, Menai Bridge, Anglesey, LL59 5LR, UK.
Tel: +44 1248 712962