A new subsidy for nuclear?
This government said over and again that there would be no subsidy for the nuclear industry. But George Osborne seems to have found another way to give the industry a boost, funded by anyone who pays a domestic energy bill. You will pay more. Some of the money will go to the UK government, and some will go to help boost the renewables industry. But you might be surprised to hear that some will also effectively go to the government of France.
cooling towers at a nuclear power plant (getty)
The Chancellor says he wants to increase the proportion of revenue raised from environmental taxes. And the government wants to make low-carbon technology financially attractive. Setting a new ‘Carbon Floor Price’ means that from 2013 up to 2020 electricity generators who emit carbon dioxide (from gas or coal fire power stations) will steadily pay more every year for carbon permits. They will pass that on to consumers. It isn’t a tax on their profits but is effectively part of their generating costs, so they will argue that there is no reason why they should not pass the costs on. Renewable and nuclear generators will not have to pay these extra taxes as they do not emit carbon dioxide. The electricity price is set by the amount that gas fired power stations can sell their electricity, because they are the ‘marginal plant’ (the last bit of electricity traded when demand is high). So the renewable and nuclear companies, who do not have to pay for carbon permits because they do not emit carbon dioxide, will effectively get a windfall profit (because they sell electricity at the same price as those whose costs have risen).
Britain’s nuclear operator British Energy was taken over by the French company EDF, which is mostly owned by the French goverment. So your energy bills are going to rise to pay the French. Wars have been fought over less!
And lest you think this question of hidden subsidy hasn’t occured to the government look again at Prime Minister’s Questions where David Cameron carefully avoided the “no subsidy for nuclear” phrase and instead said we should not have ”unfair subsidies”. There is a huge difference. And EDF, who this afternoon warmly enthused about the new carbon price floor, will have spotted it too.
There are 17 comments on this post
Personally I think we should sweep away the whole mess of carbon trading, feed in subsidies and the like and simply tax based on the embedded carbon used in energy. That would apply to all energy – road transport, electricity generation, air transport, space heating. There might need to be some supplementary levies for high-risk source (or those sources need to insure against risk), but this would be much more transparent. In the case of road transport there would have to be further taxes to pay for the road system (if that’s how we intend to fund it), but otherwise this is a much simpler, more transparent system.
That way the market would naturally move to reduced carbon sources.
Of course there’s not a snowball in it happening, if for no other reason that the carbon trading systems have been designed so that Germany’s heavy industries aren’t disadvantaged. There is another problem in that logic would suggest that embedded carbon (in imports) ought to be taxed unless the originating regime did so. In both cases there are some huge international obstacles.
Anyway, I can dream, but if adopted this would make for a much better international system.
I think this is indeed logical – tho im dumb with numbers. the German heavy industry line new to me, but given the powerof the IGs, distinctly possible id think. but of course the politics of a green future are intense, and my complaint is that Krishnangm is – lazily – adopting the conventional line on ‘subsidy’. It is just an opportunist, reality-avoiding, smoke and mirros debate.
If I had a pound for every time this government has told us a misleading truth, I wouldn’t have to worry about George Osborne’s cuts – I’d be as wealthy as he is.
By the end of this Parliament you could be as rich as Bill Gates
Probably correct. But ridiculous as well. Politicians misrepresenting the truth? Never! Next we’ll be giving it a name – something like ‘spin’ sounds good! Then we’ll employ hundreds of spin ‘doctors’ and persecute the BBC till they fire their director general and a top investigative reporter for telling the truth over WMD!
Oh, that was Labour wasn’t it.
SO what is important then, is clear and very accessible statistics/reports on what proportion of electricity each of the electricity generators derives from carbon sources. Then we can i) switch to those suppliers that use least carbon and ii) make sure their prices reflect the smaller amount of tax/subisy/whatever they are paying to HM Treasury…
This piece comes from a place where they haven’t done much thinking re subsidies and energy. Maybe Cameron doesn’t get it either, or Huhne, but the lins here is a nonsense. Excuse bluntness, but maybe necessary. Here’s the deal: nuc needs expensive decomm plus waste stores. and there they are, the emissions. to decomm carbon, we must DECOMM THE ATMOSPHERE. All Kyoto, Rio etc costs are part of that. to be a bit strong – but logical – the cost of the warplanes over Libya now is a carbon cost, a carbon subsidy. Think about it. if renews can solve energy problems, great, but anyone who can count knows that will not be cheap. Green NGOs notwithstanding.
If Osborne wants to make more money maybe he should just tax based on how ‘dirty’ a method is in generating electricity. That way you can get the carbon based generators with emissions permits and gain even more taxing nuclear for the filth it leaves behind for future generations. It is not a clean fuel like true renewables and its about time we levelled the playing field.
carbon dioxide is a natural by-product of respiration, which is the ‘combustion’ of carbohydrates i.e the burning of organic material in the prescenece of oxygen, much the same as electricity production from refined fossil fuels. Plants use CO2 in photosynthesis to create carbohydrates, hence plant based fuel sources like coal, oil,peat, wood etc.
There is a massive con being pushed on the public that CO2 is a menace and the production of it should be taxed – great lets put a tax on breathing! This is the point of CO2 taxes – control of resource!
The Nuclear industry is dirty expensive in terms of money and energy to start-up, to run and to close down, the by-products are toxic, radioactive, and long lasting and pose a potential environmental and economic disaster especially in a small country like the U.K. Could we overcome a disaster such as Fukusima?
Climate gate has shown that climate science is not exact, and that the sun cycles combined with gravitational tidal action of the moon are by far the biggest causes of climate variability.
Let’s concentrate on the real environmental pollutants, certainly petro-chemical companies and coal mines (open cast esp.) should clean up their acts and be forced to plant more trees to offset CO2 being released, however the real evils are GM pollution, pesticides, plastics and heavy metal refinement, especially those metals that are radioactive in nature – whose clever idea was it to put plutonium (MOX) into Fukushima reactor 3?
Lets learn from the disaster in Japan and put 2 Agincourt fingers up to EDF and the coalition CO2 tax Con!
(EDF have already despoiled France, a beautiful country, with their nuclear monstrosities)
@sue_m
For new nuclear facilities there is to be a disposal charge, which it’s proposed will be 3 x the cost estimate to allow for overruns.
http://www.decc.gov.uk/en/content/cms/news/pn10_124/pn10_124.aspx
“New nuclear operators will be required by law to put money aside from day one to pay for the eventual decommissioning costs and their full share of waste disposal”
No private company will take on these Nuclear builds, but those like EDF which have a massive government ownership (85% in 2008) will, especially as Nuclear power is linked to refinement for nuclear weapons!
Try getting the French government to pay for a nuclear disaster in the U.K.! The U.K. government energy policy (privatisation) is dangerous if it relies on foreign companies to keep the U.K. lights on!
http://en.wikipedia.org/wiki/%C3%89lectricit%C3%A9_de_France
Research by journalists have revealed that 13% of the nuclear waste of the 58 French nuclear power plants was secretly exported from Le Havre to Russia in the last years and deposed in Seversk.[
That sounds good Steve but if the gov are subsidising energy co’s using nuclear then it isn’t really levelling the playing field,just shifting money back and forth.
Also, to put enough money by that takes into account the ongoing problem of nuclear waste in perpetuity and the possible consequences and costs of ‘incidents’ be they through nature or terrorism, would surely make nuclear the most unprofitable energy source ever. That’s without considering the human or environmental costs.
I wonder how much the Fukushima ‘clean up’ costs are up to and still the problem continues.
http://www.reuk.co.uk/La-Rance-Tidal-Power-Plant.htm
In November 1996 the La Rance tidal power plant celebrated 30 years of active service during which time 16 billion kWh of electricity were generated without major incident or mechanical breakdown. The initial capital cost of the power plant (620 million Francs) has long since been recovered, and the cost of electricity production is now below 0.02 Euro per kWh.
La Rance tidal barrage – One good thing that EDF did! Why not a tidal energy system for the severn estuary (EDF can even invest if they like) instead of the renewal of Hinkley point nuclear reactors near Bridgewater Somerset, the reactors of which if they did a Fukushima (it is sat on an estuary with the second highest tidal rise in the world)would poison Bath and Bristol, where I live, and their Mendip water supply due to it’s mainly South westerly winds – marvilous!
So modern nuclear technology is completely different, cost-effective, and all perfectly safe?
Is that why EDF’s latest design (called EPR), which is currently being built in Finland, is current running three and a half years and €2.7 billion over budget, largely because of, “a number of safety-related design and manufacturing ‘deficiencies”.
At the other, being built at Flamanville in France, costs have increased 50% to € 5 billion, and commissioning was delayed by about two years to 2014, after a series of quality control problems. The project is “more than 20 percent over budget and EDF is struggling to keep it on schedule”.
Vive la revolution!
This isn’t a government issue. The simply fact of the matter is that the energy companies have got us over an oil barrel. We need energy. They know we need energy. We aren’t allowed to have state built, state run powerstations, it has to be done by the energy companies. So they can say ‘no, not interested’ – and who wants the brand-damage associated with nuclear – and we have no choice except to subsidise them – pay them to stuff us.
TINA. They know it. Why don’t you report it?
When the Green Bank finally opens for business what are the chances that most of its £3billion coffers will be handed over to the nuclear companies to build these reactors?
One extremely useful link for those interested in the actual numbers and facts of power generation, rather than just the posturing, is David MacKay’s “Sustainable Energy Without the Hot Air”. David MacKay is a Cambridge physicist and a Fellow of the Royal Society.
You can download the book from his site here
http://www.withouthotair.com/
Or buy it if you wish. As he says, he is in favour of getting the numbers and facts right. Applying values comes afterwards.
He was appointed to be the chief scientific adviser to the UK Department of Energy and Climate Change in September 2009.
I’d urge anybody interested in the subject to read this book. He ruthlessly demolishes a lot of myths, including those that fixate on irrelevances such as whether unplugging phone chargers makes any difference.