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Squabble in Europe over subsidies for nuclear power

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Opponents of nuclear power, including environmental groups, say government funding for atomic power would be a breach of EU legal principles and would mark a major shift in policy.

Under EU law, state aid is designed to address problems that the market cannot solve and must not cause unfair competition. It is in principle reserved for technology in its infancy, such as renewable energy. Nuclear generation began more than half a century ago.

Picking up the nuclear energy bill divides the EU Planet Ark, Date: 15-Aug-13 Country: UK/BELGIUM Author: Barbara Lewis and Karolin Schaps European Union rules to be published over the coming weeks could make it easier to justify using taxpayers’ money to fund new nuclear power, which would pitch major EU powers against each other.

The European Commission, the EU executive, says its mind is still open on the topic, but it is under pressure to set a legal framework for state aid to nuclear projects after several member states, including Britain, sought its guidance.

Whatever it lays down, as part of a wider modernization of state aid rules, is likely to widen a rift between anti-nuclear nations, such as Germany and Austria, and those willing to support the technology, including Britain and the Czech Republic.

A Commission spokesman said the executive is not planning to encourage nuclear state aid, but lawyers said a leaked draft of its proposal last month indicated it was leaning towards allowing nuclear financing…..

Lawyers say the Commission does have the ultimate say on state aid but that the process of issuing guidelines and carrying out a consultation could legitimize nuclear state aid for new builds, rather than just for short-term emergency funding as has happened in the past.

The guidelines on environmental and energy aid for 2014-2020 are expected to be published around the end of September, after elections in Germany scheduled for September 22.

Following consultation with member states, they would need to be approved by the EU Commissioners meeting as a body, which is not expected until next year.

“There is still a long way to go before the European Commission recognizes nuclear alongside renewables as one of the essential energy solutions to climate change,” said a spokesman for the World Nuclear Association, a global network representing the nuclear industry.

Opponents of nuclear power, including environmental groups, say government funding for atomic power would be a breach of EU legal principles and would mark a major shift in policy.

Under EU law, state aid is designed to address problems that the market cannot solve and must not cause unfair competition. It is in principle reserved for technology in its infancy, such as renewable energy. Nuclear generation began more than half a century ago.

Critics say giving state aid to nuclear projects, and specifically to the handful of firms that are building atomic plants in Europe such as France’s EDF or Japan’s Hitachi creates a market distortion and puts other energy sources at a disadvantage.

“It is pure hypocrisy,” said Claude Turmes, member of the European Parliament representing the Greens…….

Countries keen to attract nuclear investment have found that developers are unwilling to build nuclear plants without state guarantees on prices for the power generated.

New plants in Finland and France are billions of euros over budget and years behind schedule, and regulatory changes since the Fukushima accident have further inflated costs.

“Building new nuclear power infrastructure is getting increasingly expensive, especially in the aftermath of the Fukushima disaster, and in many cases is now not competitive with other types of energy,” Stephanie Pfeifer, chief executive of the Institutional Investors Group on Climate Change, said.

The group represents pensions, insurers and other funds responsible for 7.5 trillion euros ($9.75 trillion) in assets, including renewable and fossil fuel energy.

“Without some form of government support or subsidy, the economic case for investing in nuclear is unlikely to improve,” she added.

Britain, which is counting on nuclear power to help meet its 2020 target to cut carbon emissions, has proposed a power market reform package that includes guaranteeing a minimum price for nuclear power.

It requires state aid approval from the Commission to legalize the policy, but the executive said it had not yet received a formal application….. http://planetark.org/enviro-news/item/69493

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August 16, 2013 - Posted by | business and costs, EUROPE, politics

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