E3G

Nuclear companies open new front in fight for government subsidies

By Tom Burke

Tom Burke recently wrote an article to appear in Ends Magazine (Ends Report 426 / July 2010) calling out the nuclear industry’s call for ‘a level playing field’. Below is the article as it appeared in the magazine; it is also available to download.

Nuclear companies open new front in fight for government subsidies

Tony Benn, when he was energy secretary, used to warn about people who came to you with a problem in one hand and a solution in their back pocket. He had learned this from the nuclear industry.

Then, as now, people in the sector were deeply concerned that the lights might go out. Then, as now, they just happened to have a handy solution in their back pocket.

Then, as now, they were also less than forthcoming about what it would cost. Chris Huhne, Mr Benn’s successor, has already had one unpleasant experience with nuclear cost shock. All those radioactive waste management costs, so casually discounted away in the economic analyses underpinning Britain’s first nuclear programme, have now turned up as a several billion-pound hole in his department’s current budget. There are more holes to come.

Mr Huhne has at least had the wit to knock the fantasy about the lights going out on the head. There was no foundation for this claim despite its frequent repetition by politicians and journalists alike. The unusual clarity and brevity of Mr Huhne’s emphatic statement that the lights are not going out is refreshing. It is also correct.

But there are other fantasies coming his way. Npower chief executive Volker Beckers has recently echoed EDF’s Vincent de Rivaz’s call for a ‘level playing field’ for nuclear power in Britain. Business leaders are frequently heard calling for level playing fields. They are even more frequently to be found tilting every playing field in sight their way.

When I first heard this call I tried to imagine what it could mean. Was EDF proposing it be fully privatised to remove the implicit French government guarantee for its balance sheet? This would certainly create a more level playing field for all the British companies competing to produce renewable electricity.

Were the big, vertically integrated, mostly foreign-owned utilities proposing that they be broken up? This would certainly produce a more level playing field for all the British independent power producers. Perhaps they meant that the government should now provide as much subsidy for renewables as has been provided for nuclear over the past 50 years.

So much for my fantasies. Of course this is not what they mean. What the nuclear industry actually wants is to turn the renewables obligation into a low-carbon obligation in which all its already subsidised size and balance sheet strengths will give it a huge extra competitive advantage. Nice try.

The coalition’s position is crystal clear. There will be no public subsidies for new nuclear power. No one will be stopped from building a nuclear power station if they pay for it themselves. This is not only clear, it is also not new. This was the position of both Conservative and Labour parties before the election. The difference is that with the coalition now in power, cheating on this commitment will be very much harder.