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An anti-nuclear power protest at the gates of the Hinkley Point nuclear site. Photo: Global2000 / flikr.com.
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Nuclear subsidies: Open letter to Commissioner Almunia

Gerry Wolff

15th November 2013

Following the UK Government's announcement of huge public subsidies for the proposed Hinkley C nuclear power station in Somerset, England, Energy Fair has called on EU Commissioner Almunia to open a formal investigation for breaches of competition law.

There is no valid justification for nuclear power subsdidies. They divert resources from other options that are altogether better and cheaper.

Dear Commissioner Almunia,

No valid justification for subsidising nuclear power

In connection with the proposed new nuclear plant at Hinkley Point in south-west England (reut.rs/1fPaYlx), I'm writing to urge you to oppose the new subsidies for the project that are proposed by the UK government and also existing subsidies for nuclear operators (details below). Please open a formal investigation into this project and associated subsidies.

There is no valid justification for nuclear power subsdidies. They divert resources from other options that are altogether better and cheaper.

For reasons given below, they are bad for energy security, bad for the fight against climate change, bad financially for consumers and taxpayers in the UK, and bad for the development, throughout Europe, of the good alternatives which are ready to go, cheaper than nuclear power, and very much quicker to build.

Here are the main reasons:

  • Nuclear power is a mature technology that should not require any subsidy. Subsidies are for newer technologies that are still finding their feet commercially.
  • Contrary to what the UK government suggests:
    • Nuclear power is a hindrance, not a help, in ensuring security of energy supplies:
      • Like all kinds of equipment, nuclear power stations can and do fail. Failure of a nuclear power station is normally very disruptive on the grid because a relatively large amount of electricity is lost, often quite suddenly and with little warning.
      • By contrast, variations in the output of renewables are much easier to manage because they are gradual and predictable. There are several techniques for managing that kind of variation and also variations in the demand for electricity (see bit.ly/I4E5vr). The supposed problem of intermittency in renewables is overplayed.
      • Nuclear power lacks the flexibility needed for balancing supply and demand on the grid.
      • Contrary to popular belief, nuclear plants are not "always on", 24/7. Apart from unscheduled failures, nuclear power stations often operate at reduced capacity or are taken out of service for routine maintenance.
    • Nuclear power is a poor means of plugging the supposed "energy gap" or "keeping the lights on":
      • Nuclear plants are notoriously slow to build: they can take 17 years or more to complete (see bit.ly/1a7idjS, p. 4).
      • In general, renewables can be built very much faster.
      • There is good evidence for a superabundance of renewable sources of energy (see bit.ly/9MKP5i).
      • There are now many reports showing how to decarbonise the world's economies without using nuclear power (see bit.ly/wRQ8ro).
    • Nuclear power is a poor means of cutting emissions. Peer-reviewed research shows that the nuclear cycle produces between 9 and 25 times more CO2 than wind power (see bit.ly/1afpW06).
    • Other renewables also have much lower emissions than nuclear power.
    • Taking account of all subsidies, nuclear power is much more expensive than the clean and safe alternatives and likely to remain so in the future:
      • Withdrawal of just one of the present subsidies for nuclear power (the cap on liabilities) would raise the price of new-build nuclear electricity to at least £200 per MWh, substantially more than the unsubsidised cost of offshore wind power (about £140 per MWh), itself considered to be one of the more expensive kinds of renewable energy (see bit.ly/KisjOT).
      • The cost of renewables is falling. Greg Barker MP, UK Minister of State for Climate Change, has said (bit.ly/19YlI8W) "There is the potential for solar power to become competitive with fossil fuels without subsidy within the lifetime of this parliament [ie before May 2015]". This trend is confirmed by other sources of evidence. When that tipping point is reached, there is likely to be explosive growth in solar power. The cost of other renewables is also falling.
      • In view of the falling cost of renewables, the proposed "contracts for difference" for nuclear power is likely to be a permanent large subsidy for nuclear power throughout the proposed 35 years of the contract.
    • There are many acceptable options for siting wind and solar power plants, including wind farms out at sea (where costs are coming down), and solar plants on factory roofs and in association with roads and railways. There is also great potential for importing solar power from southern Europe and beyond, and wind power from Ireland or continental Europe.
  • In addition, renewables, with conservation of energy:
    • Provide more flexibility than nuclear power;
    • Provide diversity in energy supplies;
    • Are largely free of the several problems with nuclear power (bit.ly/1bScDSg), including the significant risk of nuclear disaster and the still-unsolved problem of what to do with long-lived nuclear waste.

Evidence in support of these points is in the web page "Opportunity cost" (bit.ly/KisjOT).

Existing subsidies for nuclear power, all of which would be available for the Hinkley Point project, are described in "Nuclear Subsidies" (PDF, bit.ly/1bSgGhx). One of the largest of these is the cap on liabilities for nuclear disasters.

Proposed new subsidies are chiefly the "contracts for difference" and government guarantees against the financial risks of building new nuclear plants. (see also "Subsidies for nuclear power in the UK government’s proposals for electricity market reform" (PDF, bit.ly/1de3BTE).

Subsidies for nuclear power have the effect of diverting resources away from technologies which are cheaper than nuclear power and altogether more effective as a means of meeting our energy needs and cutting emissions.

In terms of competition within the EU, state aid for nuclear power in the UK is entirely at odds with the coming single market for electricity in the EU and with the principle that there should be free movement of goods and services throughout the region. It is bad for the development, throughout Europe, of the good, effective alternatives -- renewables with conservation of energy -- which are ready to go, cheaper than nuclear power, and very much quicker to build.

Please oppose state aid for nuclear power in the UK or anywhere else in the EU. Please open a formal investigation into the proposed Hinkley Point project and associated subsidies.

With thanks,

Gerry Wolff

Dr Gerry Wolff PhD CEng is Coordinator of Energy Fair. 

If you would like to endorse this open letter, please write to the Commissioner as described in Writing to Commissioner Almunia.

 

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