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UK govt’s problem – how to make a nuclear subsidy look like ‘not a subsidy’

The coalition government pledged ‘no public subsidy’ for nuclear in its ‘programme for government’ in May 2010.

When is support not a subsidy? UK nuclear  London South East, Gerard Wynn , LONDON, May 16   – A British government argument that its planned
support for new nuclear power stops short of a subsidy, to satisfy EU regulators and a coalition pledge, only adds to the sense of a policy in trouble.

The planned UK nuclear build programme would be the biggest in the developed world, but is under threat after the exit of two backers. The economics are not helped by delays and cost over-runs at projects elsewhere in Europe and by low wholesale power prices.

The awkwardness of trying to stand by a commitment to ‘no subsidy,’ even while it accepts the technology needs support, risks boxing the government into a corner. Its predicament illustrates how the technology is struggling to maintain a toehold …

Whether the British programme proceeds will depend on cost, including the amount of price support, plus public acceptance of the technology and the government’s ‘no subsidy’ position, in the aftermath of a Fukushima disaster which has
entrenched opposition among the environment lobby, its supporters and
other opponents of nuclear.

As Vincent de Rivaz, chief executive of one of the key backers EDF
Energy, said on Tuesday: ‘2012 is the defining year’ for the UK
programme. It’s also a wider test case for the technology in the
industrialised world…..
French utility EDF and UK-based Centrica will decide this year whether
to proceed with their joint bid, alongside another partnership
involving France’s GDF Suez and Spain’s Iberdrola.

Their decisions hinge critically on the exact nuclear power support
price, under a so-called ‘contract-for-difference’ scheme paying a
guaranteed, long-term price per unit of power generated, whose cost
will be passed to consumers.
The coalition government pledged ‘no public subsidy’ for nuclear in its ‘programme for government’ in May 2010.


May 17, 2012 - Posted by | politics, UK

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