UK nuclear industry windfall feared

Tuesday, February 15, 2011

The nuclear industry could receive a £3.4bn windfall as a result of plans to set a carbon floor price, according to green campaigners.

WWF and Greenpeace argue the coalition’s move to make low-carbon technologies more profitable by setting a minimum carbon price would provide a big boost to the nuclear sector. They argue the move breaches its promise not to provide subsidies for new nuclear power.

The groups have calculated that the benefit to the industry could be as high as £3.4bn between 2013 and 2026. Nick Molho, head of energy policy at WWF, said: “Giving windfall profits to existing nuclear plants, from which we are likely to incur further waste liability costs, is completely against the interest of the UK taxpayer.”

A carbon floor price would mean coal- and gas-fired plants would be more expensive to run, and those costs would get passed down to consumers, raising the wholesale price of electricity. As nuclear power does not burn fossil fuels, it would not have to pay the increased carbon price but would benefit from the higher price of electricity.

Chris Huhne, the energy secretary, has argued that the measure is intended to boost all sources of low-emitting energy and does not count as a subsidy for nuclear. The energy department said: “We already have a carbon price across Europe but, unless it’s higher and more stable, it won’t bring about the massive investment we need to keep the lights on.

“The coalition is clear that nuclear is a mature technology and won’t get extra support.”

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