UK nuclear subsidies: that’s a no, then

Depending on the goodwill of politicians is nail-biting stuff when your core business evokes memories of Windscale, Three Mile Island and Chernobyl.

But Britain’s nuclear energy industry stands or falls on government policy, and RWE, Eon and EDF, the main companies lined up to invest in new nuclear power stations, have been on at the government for years to provide guarantees of “stability”.

In practice, that has meant avoiding policy reversals and help getting new nuclear projects through the planning process. But any way of underpinning revenues – please don’t call it a subsidy – would also be welcome.

As EDF UK’s chief executive Vincent de Rivaz told the Financial Times last month, the industry would really like a “level playing field” with its fellow low-carbon technologies, renewable energy and carbon capture and storage, which either receive or are to receive government largesse:

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.

In other words, give us the money or the nuclear plant gets it.

Peter Mandelson, who is still business secretary when he is not busy in his role as unofficial deputy prime minister, is adamant about his support for planning assistance – he told a meeting of analysts convened by engineering services group VT on Tuesday that it was “just crazy” for a major economy to leave major infrastructure decisions in the hands of local councils, as the Conservatives propose.

But those hoping for handouts would be disappointed. The “incentives” for nuclear and carbon capture and storage are only there to “help a nascent sector grow”, he said.

We are not going to achieve a competitive [nuclear] sector by handing out subsidies… we are not in the business of giving out subsidies. We are in the business of maintaining a level playing field.

It’s telling that the “level playing field” the industry wants and the one the government wants bear little resemblance to each other.

Related links:

Lack of support threatens future of nuclear power, EDF warns (FT, 26/05/09)