UK subsidies for nuclear power challenged in EU courts

Anti-nuclear pressure group, Energy Fair, has submitted a formal complaint to the European Commission about subsidises afforded to nuclear power.

The group, which consists of concerned politicians and environmentalists, believe that now the nuclear industry had been established for many years, it should no longer need substantial subsidies to render the technology commercially viable.

The complaint, prepared by lawyers for the Energy Fair group, centres on various aspects of nuclear energy that are currently subsidised by UK taxpayers. One of the largest subsidies is the cap on liabilities for nuclear accidents.

Energy Fair estimates that if nuclear operators were fully insured against the cost of nuclear disasters, the price of nuclear electricity would rise by at least 12p per kWh and perhaps as much as £1.96 - depending on assumptions made. “Like car drivers, the operators of nuclear plants should be properly insured,” the document outlined.

Mike Childs, Head of Policy, Research and Science at Friends of the Earth, said: "The UK Coalition Government promised that nuclear power should not get any subsidies. That was a sensible decision that recognised that time-limited subsidies should only be given to new technologies, such as wind, solar, wave and tidal, to enable them to develop, become mature and be competitive. It's time for the nuclear subsidies to stop and this legal case is a useful contribution in achieving that aim."

Energy Fair is also complaining about uranium’s current status as exempt from tax on fuels used to generate electricity and Government’s proposed support for the disposal of nuclear waste. Energy Fair’s research also indicates that the nuclear industry is set to receive more subsidies if current proposals are carried forward.

Caroline Lucas, MP for Brighton Pavilion and Leader of the Green party for England and Wales, said: “The Government’s planned Electricity Market Reform is set to rig the energy market in favour of nuclear -- with the introduction of a carbon price floor likely to result in huge windfall handouts of around £50m a year to existing nuclear generators. Despite persistent denials by Ministers, it’s clear that this is a subsidy by another name, which makes a mockery of the Coalition pledge not to gift public money to this already established industry. If these subsidies are found to be unlawful, I trust the European Commission will take action and prevent the UK’s nuclear plans from seriously undermining the shift towards new green energy.”

The lawyer who has been leading the preparation of the complaint, Dr Dörte Fouquet, said: “The European Union has opted for opening up the energy market and is vigilant about creating a level playing field. In this regard, the Commission over the last years repeatedly underlined that distortion of the market is to a large extent caused by subsidies to the incumbents in the energy sector. This complaint aims to shed some light on the recent shift in the energy policy of the United Kingdom where strong signals point to yet another set of subsidies to the nuclear power plant operators.”

“There is no justification of any kind for subsidising nuclear power,” continued Dr Gerry Wolff of Energy Fair. “It is a mature technology that should be commercially viable without support. Renewables have clear advantages in cost, speed of construction, security of energy supplies, and effectiveness in cutting emissions of CO2. There are more than enough to meet our needs now and for the foreseeable future, they provide diversity in energy supplies, and they have none of the headaches of nuclear power.”

If Energy Fair’s complaint is upheld; it is unlikely that any new power stations in the UK will be built in the near future. The complaint may be followed by legal action in the courts and see the removal of subsidies supporting the nuclear industry.