Kate Mackenzie Nuclear sector ramps up efforts to gain government support

The nuclear industry should be onto a good thing right now, as governments struggle to reduce emissions around the world. But it is showing signs of anxiety as subsidies and quotas around the world are directed towards alternative energy such as solar and wind power.

Vincent de Rivaz, the chief executive of EDF’s UK subsidiary, liked to make a point of arguing that government subsidies were not needed for nuclear power.

He likes to ask: “Look at my business plan and tell me, where is the line for government subsidy? It is not there.”

However now Mr de Rivaz says without financial support from the government, no new nuclear power stations will be built.

“We have a final investment decision to make in 2011 and, for that decision to give the go-ahead, the conditions need to be right,” he said.

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.

His change of sentiment seems prompted by the recent boosts for wind power and clean coal projects in the UK.

Meanwhile in the US, the nuclear industry is also worried about missing out as government support in the form of grants, loans and tax breaks goes to renewable energy sources. In fact the New York Times reports it is pressing to be considered a ‘renewable’ energy.

“They’ve been queuing up outside staff offices, everyone with all their ideas as to what should be included,” said Bill Wicker, the spokesman for the Democratic majority on the Senate energy committee, which is considering a national quota.

The lobbyists referred to here include those representing biomass (basically, burning waste to create energy) and utilities are seeking to have hydropower and nuclear power included to make it easier to meet new renewable energy quotas.

Nuclear industry has a long history of government support. While a functioning nuclear power plant can theoretically supply power cheaper than just about any rival, the costs of building the plants are huge and difficult to predict, as the Vattenfall plant in Finland shows. The sheer size of a nuclear power project, the lack of interest in this energy source in recent years, and evolving safety requirements means much of a new plant has to be designed from scratch, with little economy to be gained from existing designs or technology. Safety and political concerns on top of this mean government support is never far the industry’s thoughts. And as other energy sources see increased financial support, the nuclear industry is keen to keep up.

Related links:

EDF calls for support for nuclear industry (FT, 25/05/09)
With billions at stake, trying to expand the meaning of ‘renewable energy’ (NY Times, 24/05/09)
The revival of nuclear power gathers pace in Europe, but will a free market finance it? (FT Energy Source, 13/05/09)