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EDF and nuclear subsidies: how times change

 

December 2007:

EDF Energy, London's electricity company, has told the Government it is prepared to shoulder the cost of building a £10bn fleet of four nuclear power stations without the support of a penny of taxpayers' money.

[…]

In a private speech to City bankers this week, EDF's UK chief executive Vincent de Rivaz said using state-of-the-art European reactor technology as its business model for the project would make money for investors.

'There is no subsidy in the business case,' said de Rivaz. 'There is no line in the budget which is called 'taxpayers' money'. The nuclear option is based on sound economics.'

Wow! The nuclear option is based on sound economics, Mr de Rivaz? There is no subsidy in the business case? EDF can shoulder the cost of building four nuclear power stations without the support of a penny of taxpayers' money? This is fantastic news. We take back all of what we said about how the economics of nuclear power are a ridiculous joke. Sorry, what’s that? Oh, dear…

May 2009:

New nuclear power stations will not be built in Britain unless the government provides financial support for the industry, the head of the country’s biggest nuclear generator has warned.

Vincent de Rivaz, chief executive of the UK subsidiary of EDF, told the Financial Times that a “level playing field” had to be created that would allow the nuclear industry to compete with other low-emission electricity sources such as wind power.

Wow! You mean the nuclear option isn’t based on sound economics, Mr de Rivaz? There is a subsidy in the business case? EDF can’t shoulder the cost of building four nuclear power stations without the support of a penny of taxpayers' money? This is fantastic news. We were right all along - the economics of nuclear power are a ridiculous joke.

Comments

The government's policy is that all new nuclear power stations will only be built if the private sector "pay the full cost of generation, including the full cost of decommissioning and waste disposal". EdF and Areva have been clear front runners in the bid to build new nuclear in the UK, so this may herald the end of the Labour Party's foolish headlong rush to nuclear power.

You ask

There is a subsidy in the business case?
Did you bother reading the FT article? EDF aren't asking for a subsidy, they say the fossil plants are paying too low a penalty for CO2 emissions (do you disagree?) and that wind is getting too high a subsidy.

Mr de Rivaz suggested that the best way to support the nuclear industry would be to make sure penalties paid by rival fossil fuel power generators under the European Union’s emissions trading scheme were kept high enough to make nuclear investment attractive.

He said that such a move would be necessary before companies were confident enough to invest tens of billions of pounds in new reactors. He added that the government needed to put a floor under the price of carbon permits in the EU’s ETS.

Since the emissions trading scheme began operating in 2005, however, the price of the permits has proved highly volatile and has fallen sharply in the past year. Mr de Rivaz said: “We will not deliver decarbonised electricity without the right signal from carbon prices.”

EDF is also concerned that the additional incentives for renewables will lead to so much wind capacity being built that nuclear power stations will have to be shut down at times of high wind power output, jeopardising the economics of new reactors.

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