News July 2013

31 July 2013

Hinkley

Despite numerous attempts by the pro nuclear politicians of the main parties to push the propaganda that building will start soon, Hinkley C will never be built, we have been here before! Does the following sound familiar? Even though Mrs Thatcher had been given permission to build Hinkley C by Mr Barnes the inspector after a year-long public inquiry, and with all the taxpayers’ money available, Hinkley C was never built. Why not? It was a combination of two key factors which meant that the government of the day did not continue to use its permission to complete the building of Hinkley C. The first factor was the rising costs of nuclear. During the extensive public enquiry the true escalating costs of nuclear compared with other forms of generation were exposed to the public and the government. (Read Crispin Aubery’s book on the Hinkley inquiry called Meltdown.) If Mrs Thatcher could not build Hinkley C then there is very little chance of David Cameron doing so! Exactly the same problems exist now as they did then, the escalating costs and another international nuclear disaster.

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Posted: 31 July 2013

30 July 2013

Europe

Letter Andrea Carta, Greenpeace: Your report on the European Commission’s plans to allow direct state aid for nuclear power (“EU to allow state aid for nuclear power”, July 20) has prompted a somewhat confusing reply from the commission. Antoine Colombani, the EC spokesman for competition, goes to great lengths to argue (“EU rules do not prohibit state aid for nuclear power”, Letters, July 23) that the commission is still sitting on the fence on the issue, but his claims are flawed. Under EU competition rules, state aid is prohibited and only justified if it supports a common EU interest. The leaked commission guidelines on state aid describe subsidies to nuclear energy as a “common EU objective”. Given the divergence of policies on nuclear power in Europe, this definition can only be interpreted as a signal that the commission intends to carve out specific state aid provisions for nuclear power. Reactions to the leak from Germany and Austria’s leaders confirm this reading.

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Posted: 30 July 2013

29 July 2013

Energy Costs

Energy price rises coupled with high profits, mis-selling scandals at power firms and a lack of transparency over bills have destroyed consumers’ trust in energy companies, a committee of MPs has said in a report that also criticises the sector’s watchdog for failing to take effective action. The MPs also criticised the government for doing too little to help millions of people living in fuel poverty. The current approach is to offer low-income families subsidies, paid for by energy companies, for energy efficiency measures such as solid wall insulation and new boilers. The government announced an extra £20m for these efforts last week, which should benefit 20,000 homes. In a recommendation that is likely to be controversial, the committee said the money for lifting people out of fuel poverty should come from the taxpayer, not bill-payers. The fuel poverty charity NEA said the energy company obligation was insufficient to address the scale of fuel poverty and called for further action. “It is crucial that in the coming months the government accept there is an urgent need to address well-documented deficiencies with the current approach and ensure that there is adequate and proportionate assistance which is accessible to all fuel poor households to protect them from rising energy costs,” it said.

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Posted: 29 July 2013

28 July 2013

Sellafield

The Government is expected to take back control of the clean-up of nuclear waste at Cumbria’s Sellafield, following a string of failures by a private sector consortium of US, French and British engineers. Alarmed by spiralling budgets – £70bn and counting – and a series of delays to crucial projects, the Nuclear Decommissioning Authority (NDA) has quietly drafted in a team of consultants from the accountants KPMG to review how Sellafield is run, The Independent on Sunday can reveal. It is running through three options to sort out a situation in which 12 of 14 major projects were behind schedule last year, as well as last month’s £700,000 fine for sending bags filled with radioactive waste to a landfill site in Cumbria rather than a specialist facility. The most eye-catching – and believed to be favoured – choice, involves stripping the contract from Nuclear Management Partners, a consortium made up of URS from California, France’s Areva and Amec, one of Britain’s biggest listed companies.

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Posted: 28 July 2013

27 July 2013

Europe

For the last week, the European Commission has been at pains to explain itself after leaked plans to change EU rules and allow European countries to provide direct state aid to nuclear power came under heavy fire. Chancellor Angela Merkel reiterated Germany’s opposition to subsidies for nuclear energy, while Austrian Chancellor Werner Faymann said Austria would resist the plans as there was no future for nuclear energy in Europe. In an attempt to reassure anti-nuclear countries, the Commission published a rebuttal on its website. But the Commission’s arguments are as flawed as an ageing nuclear reactor. They paper over legal inconsistencies and are misleading about the effects that changes to European competition rules would have on the energy market. Here is a response to the Commission’s main points.

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Posted: 27 July 2013

26 July 2013

Energy Supplies

SSE, one of Britain’s ‘big six’ energy firms, has warned that the government’s energy plans fail to address the risk of power shortages in the near term. Westminster has announced a draft package of incentives for energy companies to keep plants which might otherwise be shuttered on standby, in a bid to address an acute capacity shortage expected as ageing power stations retire. However, it will not make them available until 2018/19 – a move SSE said would create further uncertainty in the energy market and “not address the risk of imminent shortages”. The Scotland-based group said the five-year wait for the government’s financial incentive package will hold up new investment decisions and delay the construction of new plants.

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Posted: 26 July 2013

25 July 2013

Energy Costs

ScottishPower has reignited the row over who is to blame for rising energy bills after reporting the costs of government energy efficiency schemes had more than doubled since last year. Keith Anderson, the energy giant’s boss, said the government had got its sums wrong over the costs of implementing its new “Energy Company Obligation” (ECO) programme – and refused to rule out raising prices as a result. Analysts warned that suppliers were likely to increase prices by a “high single digits” percentage before winter, due to rising costs from the schemes as well as wind farm subsidies, the new carbon tax and network upgrade costs. ScottishPower said yesterday the costs of implementing energy efficiency schemes had risen by 137.7pc, to €155.8m (£134.3m) for the first half of the year.

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Posted: 25 July 2013

24 July 2013

Nuclear Subsidies

Negotiations between the UK government and EDF over the price to paid for nuclear power are dragging and a row has now erupted on the continent over whether nuclear power can qualify for state aid. Steve Thomas from Greenwhich University unravels the hurdles facing any deal.

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Posted: 24 July 2013

23 July 2013

Nuclear Subsidies

Letter European Commission: The commission has no plans to encourage such aid or to make it easier for member states to grant it. State aid for nuclear power is currently not prohibited by EU rules: member states’ plans in that respect are notified to the commission and assessed directly under the Treaty rules, in the absence of specific commission guidelines in this sector. The purpose of this assessment is to check that such subsidies do not unduly distort competition in the EU single market, as member states are of course free to make their own choices when it comes to nuclear power. The commission is planning to adopt guidelines on state aid for energy and environmental protection in 2014. In that context and given that some member states wish to subsidise nuclear power, the commission is considering whether or not to include in those guidelines specific provisions on state aid for nuclear energy. The guidelines would only set out clear and transparent principles, discussed ex ante with stakeholders, for the assessment of such notifications. The commission has not yet taken a position on whether or not such specific rules are needed and will launch a public consultation in the autumn to gather the views of member states and stakeholders. If no specific provisions are introduced in the guidelines the commission would simply keep assessing notifications under the general Treaty rules on state aid, building specific criteria through its case practice. In any event it should be clear that the commission has no plan whatsoever to “exempt” nuclear power from “the general restrictions on state aid” or even to facilitate the granting of such subsidies compared to the present situation. Each notification by a member state would of course still be subject to a case-by-case analysis by the commission.

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Posted: 23 July 2013

22 July 2013

Energy Companies

No wonder the big energy companies are spooked by the green dream. Have you seen their share prices lately? Witness npower last week, which warned that green policies will drive a 20% rise in energy bills by 2020. Npower is owned by the German utility RWE. In 2008, RWE’s shares traded at a whopping €100 each. Today they are worth less than €20. EDF and E.ON, which have 5.5 million and 4.8 million UK customers respectively, have seen a similar drop. It’s a precipitous 80% fall triggered by investors alarmed at the prospect of losing an effective oligopoly of supply and with it a healthy stream of profits. These are the companies that want to supply us with natural gas from Norway, liquid petroleum gas from Qatar and electricity from imported coal and oil. Some want to build a new generation of nuclear reactors, though given the parlous state of their share prices, they want massive subsidies and cast-iron guarantees from any government willing to commission them.

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Posted: 22 July 2013