Tuesday, 17 September 2013

Nuclear subsidies won't be permitted‏

The Daily Telegraph has declined to publish this comment.
In his article on the new infrastructure report prepared by Sir John Armitt, the former Olympics construction boss, Alistair Osborne quotes Sir John as saying “Even if fracking is a great success, it’s a long way out. You are still going to need nuclear.” (Olympics model ‘can end nuclear plant delay’ D. Tel. business, 6 Sept.).
Sir John did a great job in delivering the Olympics- which I attended and thoroughly enjoyed –but he neither an expert on energy policy or nuclear.
On this nuclear claim, his judgment is flawed. I think fracking’s potential is over-estimated, not least because its proponents ignore the radon risk in the gas piped into the nation’s kitchens, and the radioactively contaminated waste created by the drilling.
But nuclear can never be a gap-filler, because of its cost. One issue avoided by its supporters is the construction financial guarantees – up to £10 billion - offered to the  potential plant  builders such as the French state-owned Electricity de France (EDF) will be subject to scrutiny by the Competition Directorate  of the European Commission under State Aids rules.
Proposed fixing high future prices for nuclear-generated electricity through the so-called contracts-for-difference and ‘strike prices’ are similarly obvious taxpayer –funded or  bill-payer subsidies, and will fail the State Aids test.
 Sir John overlooks this in his enthusiasm for such taxpayer support for  private sector nuclear.
Word from Brussels is there is no chance of this being agreed, as it is so manifestly a selective subsidy for one technology over its competitors, such as renewables and gas. So either French Socialist President Hollande agrees to using French taxpayers money  to underwrite the £7bn  per reactor construction risk, or new reactors won’t be built.

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