EDF say that the deal they cut with the Coalition is ‘fair and balanced for consumers and investors alike’. I guess it’s unsurprising that EDF are very pleased with the deal, as it gives them a guaranteed and inflation-proofed return at twice the price we currently pay for electricity for the next 35 years. This puts the UK tax-payer as well as the energy consumer on the hook for the enormous costs of Hinkley Point – already acknowledged to be the most expensive nuclear power station in the world.
At least we now know that this is a subsidy paid for by public money. The Governments contrived position argues that nuclear subsidies are OK if also available to other low carbon technologies including, of course, renewables. But the sheer scale of nuclear subsidies and the 35-year contract with EdF dwarfs anything offered to renewable energy. This is a very big issue, not just for the UK, but for all Europe. Distorting nuclear subsidies will impact across the whole EU electricity market. Big nuclear subsidies mean that the market for European renewable energy technologies will inevitably be significantly reduced. Those adversely affected include renewable energy generators, installers, equipment manufacturers, other efficient technology providers, fitters of insulation and other energy saving equipment, and investors in decentralized renewable energy projects.
So NCG are working with a large set of pan-EU and pan-UK energy associations, corporations and small companies who will be significantly – and negatively – affected by this decision. We now intend to join Austria and press a UK legal challenge through the EU Court of Justice. At root, the argument is all about what we want – a plutonium economy, or a renewable one. Given the economic and environmental risks associated with nuclear, maybe the question we need to ask ourselves is, ‘do we feel lucky?’
Dr Paul Dorfman
Founder, Nuclear Consulting Group