EDF nuclear deal is a bad economic bet

10 July 2014

It has always been difficult to see what was attractive about the proposed deal with EDF to build a nuclear reactor at Hinkley Point in Somerset. To bring this off the government is offering to sell 35 years of index-linked tax receipts to the French government to buy electricity at twice its current price.

This is a very big bet on the ability of EDF to build a reactor on time and to budget – a feat they have never accomplished with the reactor type we are buying. It is an even bigger bet on the price of electricity doubling. If it fails to do so then the government will have to pay EDF even more subsidy.

This is because the government has guaranteed the price that EDF will receive for all the electricity it produces. It has set this at £92.50 per megawatt hour. If EDF can only sell Hinkley's electricity at less than this the government makes up the difference from a levy on consumers, effectively a tax.

This creates a paradox. The government is keen to keep electricity prices low to reduce household bills and improve industry's competitiveness. But if this policy succeeds it will have to pay even more subsidy to EDF from its nuclear tax.

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At least one injured after earthquake hits Japan's coast near Fukushima

11 July 2014

Nuclear power plant workers retreat to higher ground after small tsunami triggered by 6.8 magnitude earthquake.

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EDF in line for £800m windfall from subsidy scheme to keep lights on

6 July 2014

EDF, which operates most of Britain 's nuclear power stations, could be in line for an £800m windfall via a loophole in a government subsidy scheme aimed at keeping the lights on at times of peak demand.

Ed Davey, the energy and climate change secretary, last week outlined his plan to pay power plants to be on standby from 2018 in an effort to deal with peak demand and the intermittency of wind power.

Most industry experts assumed that the "capacity market" scheme – the cost of which will be passed to the consumer – was designed to ensure that the many gas-fired power stations threatened with closure would be kept open.

But the Department of Energy and Climate Change (Decc) now admits the scheme will be open to all forms of generation including nuclear, which has low operating costs and therefore could undercut its competitors in the auction to be run by the National Grid.

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March 2014: JOINT SUBMISSION OF THE UK & IRELAND NUCLEAR FREE LOCAL AUTHORITIES (NFLA), CITIES FOR A NUCLEAR FREE EUROPE NETWORK (CNFE) AND STOP HINKLEY GROUP Re: STATE AID – UNITED KINGDOM INVESTMENT CONTRACT considering the UK Government 's agreement to provide financial assistance and guarantees to EDF to build new nuclear power stations at Hinkley Point in Somerset and, at a later date, at Sizewell in Suffolk.

The World Nuclear Industry Status Report 2013
The World Nuclear Industry Status Report 2013
The World Nuclear Industry Status Report 2013
Two years after the Fukushima disaster started unfolding on 11 March 2011, its impact on the global nuclear industry has become increasingly visible. This World Nuclear Industry Status Report 2013 provides a global overview of the history, the current status and the trends of nuclear power programs worldwide.

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Page Updated 12-Jul-2014

This response takes an historical perspective set in the context of the proposal to build two additional nuclear reactors at Hinkley in Somerset. The fact that ‘virtual reprocessing' – or ‘not reprocessing' is proposed is to be welcomed. Unfortunately the decision to not reprocess should have been taken much earlier. At the Planning Stage it was quite clear that THORP was not needed. The same is true for the proposed Hinkley C Power Station.

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A new report, A Corruption of Governance, prepared for the Association for the Conservation of Energy and Unlock Democracy was presented to MPs and NGOs at the House of Commons. It exposes that the evidence given to Ministers and Parliament, promoting the use of nuclear power, was a false summary of the analysis carried out by government departments.
The report, supported by a cross party group of MPs, calls for the case for nuclear power to be re-examined in a parliamentary debate, so the true facts can be discussed. More >>>

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