As the European Commission considers the £100 billion subsidy package the UK has offered EDF to build and operate Hinkley C nuclear power station, Paul Dorfman explains why the ‘deal’ is illegal, anti-renewables, and ruinous to energy users and tax payers.
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When is nuclear subsidy a ‘market correction’?
The government had promised the public electorate that new nuclear will only be built on the condition that it receives no public subsidy. It’s now adapted its position to say that State Aid for nuclear is not a subsidy if it is available to other energy technologies.
But the thing is, the Hinkley C deal gives very significant extra support and special conditions for nuclear, exceeding any support for renewable energy.
The government now say that these public subsidies are justified because new nuclear performs a ‘Service of General Economic Interest’. In other words, subsidies for Hinkley C are aimed at:
- security of supply,
- diversity of generation,
- decarbonisation,
- electricity price stability, and
- affordability.
However, it seems very unlikely that Hinkley C can be said to realistically address any of these issues in a timely manner.
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So what?
So it seems that proposed UK government State Aid for new nuclear is:
- incompatible with EC Legislation,
- does not represent a genuine ‘Service of General Economic Interest’,
- will distort the European energy market, is neither transparent nor proportionate,
- will not make a timely contribution to UK security of supply or decarbonisation,
- and will not contribute to affordability, price stability and least-cost for the UK energy consumer.
Along with this, nuclear carries substantial ‘tail-end risks’.
The development of sustainable and affordable low carbon energy remains a growing economic sector with huge potential for job creation – this should be a message of hope.
To limit this diversity through State Aid for nuclear at the expense of other, more flexible, safe, productive, cost-effective and affordable technologies seems, at the very least, unwise.
Read more at Hinkley C – a nuclear subsidy too far
