Nuclear Subsidies
The European Commission is close to concluding that Britain’s nuclear programme at Hinkley Point breaches EU state aid rules and may have to be revised, a move that could lead to long delays and even cause the complex deal to unravel. The EU competition police are examining a string of subsidies tied to the Government’s £16bn agreement with French groups EDF and Areva as well as China’s General Nuclear Power to build two new generation EPR reactors. These would be the first reactors to be built in Britain since 1995, providing 7pc of the UK’s electricity. Sources in Brussels say the chief concern is a £10bn loan guarantee for the construction of the plants, insurance against a meltdown, help with decommissioning costs and the inflation-linked “strike price” of £92.50 per megawatt hour for 35 years. The investigation is being conducted by officials at the competition direct-orate under Joaquin Almunia. They are expected to issue an initial verdict in January, paving the way for a broader inquiry. Any decision requires backing by the “College” of EU commissioners.
Telegraph 1st Dec 2013 read more »
EU Observer 2nd Dec 2013 read more »
It seems that negotiations on the £16bn plan to build new nuclear for the UK at Hinkley Point in Somerset are far from over. When agreement between the UK Government and EDF on the strike price was announced six weeks ago the impression was given that the deal was done. This is not correct. Numerous details remain unresolved, opposition to the costs involved and the structure of the deal has mounted and, crucially, the financing has not been agreed. Full-scale construction work cannot begin until the funding is in place. The key lies with the Chinese. As David Cameron arrives in China on yet another trade mission, he will be uncomfortably aware that while the two Chinese companies involved have agreed to invest “in principle”, they have set conditions which have to be met before anything is signed. The Chinese want confirmation that the deal does not breach the Brussels rules on state aid and subsidies. The rules are probably flexible enough with some pressure from the French to allow the deal through, though a disinterested Martian looking at the arrangements objectively would surely conclude that the rich mixture of state guarantees, contracts for difference and prices indexed-linked for 35 years can only be described as a subsidy. The mixture is certainly not available to any other part of the energy sector. The real issue though is that the Chinese want confirmation – in writing if not in blood – that they will be allowed to build and operate a future nuclear station in the UK.
FT 1st Dec 2013 read more »
The government has been urged to be more honest about the levels of subsidies given to oil and gas producers and the companies who will build a new nuclear power station at Hinkley Point. A parliamentary watchdog argued on Monday that ministers should admit they are already providing £12bn of annual subsidies to fossil fuel operations and windfarms while lining up more support for shale gas and nuclear. The environmental audit committee (EAC) said subsidies to oil and other carbon fuels should be scaled back because of the impact on global warming, and also urged ministers to restate a previous commitment to ending fuel poverty. A report on energy subsidies just published by the committee says the chancellor’s autumn statement later this week is an ideal chance to provide a “clear and comprehensive analysis of energy subsidies in the UK”. Its biggest criticism is over ministers’ insistence that the deal agreed by the Treasury and EDF to fund the construction of a new nuclear power plant at Hinkley Point in Somerset is not a subsidy. “New nuclear is being subsidised and the coalition should come clean and admit it,” said Walley. “The government cannot escape that clear fact by talking about ‘support mechanisms’ and ‘insurance policies’ instead of ‘subsidies’.”
Guardian 2nd Dec 2013 read more »
Sellafield
The bill for cleaning up the huge Sellafield nuclear plant in Cumbria will rise even higher than its current estimated level of £70bn as operators struggle to assess the full scale of the task, according to sources close to the project. The warning comes just days before private sector managers face a grilling from the public accounts committee, which is investigating activities at the facility. It was hoped that the huge bill – eight times the cost of staging the London Olympics – would be capped at £70bn, but well-placed sources have told the Guardian that the operators are convinced they are still “not at the top” of the cost curve. Sellafield is regarded as the most dangerous and polluted industrial site in western Europe, not least because it houses 120 tonnes of plutonium, the largest civilian stockpile in the world. While the clean-up goes on there has been much speculation about how to deal with the plutonium, which in theory could be used to create dozens of atomic bombs if it fell into the wrong hands. Just storing this material is said to cost £80m a year and there are a variety of potential plans for reducing the stockpile, possibly by burning it or turning it into more fuel for reactors. Talk of building a new mixed-oxide (Mox) fuel reprocessing plant has been undermined by a report out this summer that concluded a previous Mox facility, which closed two years ago, had left taxpayers with a £2.2bn bill rather than the healthy profit that had been promised when it was first constructed.
Guardian 1st Dec 2013 read more »
Nuclear Investment
China wants involvement in Britain’s first high-speed rail line and an increased role in civil nuclear power, the country’s premier said in Beijing after talks with David Cameron on the first day of the prime minister’s visit. Li Keqiang said China would also like to invest in power projects. Speaking in the Great Hall of the People on Monday, Li said: “The two sides have agreed to push for breakthroughs and progress in the co-operation between our enterprises on nuclear power and high speed rail. The Chinese side is willing to not only participate in but also purchase equities and stocks in UK power projects.” Cameron said the scale and pace of China’s transformation dwarfed Britain’s industrial revolution.
Guardian 2nd Dec 2013 read more »
Energy Costs
Dave and Nick have finally announced their energy bill cutting plan in the Sun newspaper but who wins and who loses? Have we gone back to the future? Your energy bill will be an average of £50 lower than it would have been after u-turns on two key “green” measures to support low income households. That doesn’t necessarily mean your bill will actually come down – it may just rise by less. But the energy companies are expected to announce a hope of keeping bills down until 2015 at least. The energy efficiency industry is very worried about job losses and closures given the massive drop in demand from slowing down ECO. So the government is introducing new incentives for homebuyers and landlords to have the work carried out themselves. If you buy a home you can apply for £1000 towards energy efficiency measures, and ministers hope that will also improve the dreadful uptake of Green Deal finance, where you can get a loan to improve your home’s energy efficiency. That all means, says Danny Alexander, there need be no drop in the number of homes being improved. But instead of those benefiting being primarily the less well off (through ECO) it might well be the better off who are able to take advantage of the insulation incentives. That is exactly what the government wanted to put an end to when it introduced ECO in the first place.
Channel 4 News 1st Dec 2013 read more »
UK energy firm Npower says it will not raise prices any more until spring 2015 unless wholesale costs go up. The company introduced a planned price rise of 10.4% over the weekend, but it says that will be reduced, once it has worked out how much changes to government policy will save it. Rival power suppliers SSE and Centrica have said they will also pass on cost reductions.
BBC 2nd Dec 2013 read more »
David Cameron stands accused of using “smoke and mirrors” tactics over his pledge to cut energy bills, with critics claiming that fuel prices will be at a record high this winter and cuts to energy efficiency schemes will come at the expense of some of the poorest households. The government has pledged to bring down energy costs by taking £50 off bills and offering new homebuyers up to £1,000 to help install insulation, double glazing or green boilers as part of Thursday’s autumn statement, which will be set out by George Osborne. The chancellor confirmed on Sunday that the measures would be funded by a further crackdown on tax avoidance and also by scaling back the Energy Company Obligation, a scheme to help poor households use less energy. The charity National Energy Action is launching a campaign on Monday calling for more radical action to end the “cold homes crisis” that the government is failing to solve. It said cuts to green levies would come at the expense of poorer households, who are likely to get dramatically less help to cut their bills under existing schemes and are less likely to qualify for the new £1,000 discounts to fund energy efficiency measures for homebuyers.
Guardian 1st Dec 2013 read more »
This is no victory. Yes, £50 may be being cut from bills. But astonishingly, there’s still another £300 billion of projected increases from green commitments to go. They make Ed Miliband’s pledge to freeze bills meaningless. For this, we must thank primarily his own biggest legislative achievement – the passage, when he was Energy Secretary, of the 2008 Climate Change Act. Gordon Hughes, professor of economics at Edinburgh University, says the total cost of meeting the 2020 target will be substantially more than £100 billion. There’s only one way of funding it: from consumers, with £400 added to the average bill. But we’ve still not scratched the surface of the eventual true cost of the great green leap forward. By 2030, the power industry is meant to be emitting just ten per cent – yes, a cut of 90 per cent – of the CO2 it does now. The National Audit Office says doing this means bills will be £700 higher than now, but according to Hughes and other experts, the eventual total cost is mind-boggling: about £300 billion.
Dail Mail 1st Dec 2013 read more »
A fresh crackdown on tax avoidance will fund £1,000 grants for homebuyers to improve energy efficiency, George Osborne has said. The chancellor said the coalition would keep the public finances under tight control as he gave details of a shake-up of green levies that could see £50 shaved off energy bills. He said on the BBC’s Andrew Marr Show that his autumn statement on Thursday would stick to the task of delivering a “responsible recovery”. Despite signs of a sharp upturn in growth, he said there were still “lots of risks” for the economy and increasing borrowing would be “disastrous”. Asked how the energy efficiency grants and cuts to environmental levies on bills would be funded, Osborne replied: “The money will come from additional taxes that we will raise from dealing with tax avoidance.”
Guardian 1st Dec 2013 read more »
The Big Six energy companies have confirmed they will pass on savings of a shake-up on green levies that could shave up to £50 off bills, the Government has announced. Chancellor George Osborne confirmed that the costs of some energy efficiency schemes would be rolled back in this week’s autumn statement. All of the major energy suppliers have said that they will pass the benefits to their customers but the reduction in individual household bills will depend on the energy supplier, the Government said.
Independent 2nd Dec 2013 read more »
Telegraph 2nd Dec 2013 read more »
Times 2nd Dec 2013 read more »
While the Chancellor is absolutely right to say that the best thing a government can do to help is get out of the way, and cutting the green levies is an excellent place to start, the reality is that under his proposal the charges won’t disappear: they will simply be relocated to general taxation. Indeed, rather than cutting down on wasteful green spending, the Government is proposing grants of up to £1,000 for new householders to spend on energy-efficiency measures, such as installing insulation or replacing the boiler. Would it be unreasonable to infer that the Lib Dems have forced the Tories to soften an otherwise sound idea?
Telegraph 1st Dec 2013 read more »
Labour leader Ed Miliband is to accuse ministers of using “smoke and mirrors” over its plan to cut the cost of energy bills by an average of £50 a year. Chancellor George Osborne has said he will spread the cost of insulating homes and that government will take on some of the burden faced by customers. But Mr Miliband will insist in a speech on Monday that a “cosy deal” with firms will not keep bills down.
BBC 2nd Dec 2013 read more »
British industry has warned that green taxes are pushing it to “crisis point” even as George Osborne prepares to cut environmental levies on household energy bills in this week’s Autumn Statement. Leading industrialists from companies such as Tata Steel and Ineos told the Financial Times that green taxes were putting their British plants at a competitive disadvantage relative to those plants’ European competitors. They urged David Cameron and his chancellor to extend their pledge to “roll back” the levies on households to manufacturing plants. “We are at a crisis point,” said Tom Crotty, director of Ineos, the chemical company.
FT 1st Dec 2013 read more »
Matt Ridley: George Osborne needs to act fast if we are to benefit from falling gas prices in the rest of the world. The Chancellor is to knock £50 off the average energy bill by replacing some green levies with general taxation and extending the timescale for rolling out others. On the face of it, the possibility that global energy prices may start to fall over the next few years might seem like good political news for him, and some of the chicken entrails do seem to be pointing in that direction. There is, however, a political danger to George Osborne in such trends. For Government strategists reeling from the twin blows of Ed Miliband’s economically illiterate but politically astute promise of an energy bill freeze and the energy companies’ price hikes, the prospect of lower wholesale energy prices might seem heaven sent. But in many ways it only exacerbates their problems, for the Government is right now fixing the prices we will have to pay for nuclear, wind and biomass power for decades to come. And it is fixing those prices at quite a high level. The more that oil, gas and coal prices drop, the worse these deals look and the more they threaten our economic competitiveness. The Liberal Democrats have not allowed the Chancellor to cut subsidies for the renewable energy industry, the most regressive redistribution of wealth since the Sheriff of Nottingham was in his pomp.
Times 2nd Dec 2013 read more »
Europe
Wrong steps taken in drawing up the EU’s first climate strategy in 2008-09 were forgivable. To repeat the errors with the benefit of half a decade’s experience would be inexcusable. The objectives – securing Europe’s energy supplies and playing a leading role in the international fight against climate change – are still the right ones, but the EU must be smarter in the ways it sets about achieving them. For 2020, European governments set three targets: legally binding commitments to cut their greenhouse gas e missions by 20 per cent from 1990 levels and to use renewable sources for 20 per cent of Europe’s energy, and a non-binding aspiration to reduce their energy consumption by 20 per cent relative to projections made in 2007. The plan’s supporters believed that the additional targets would reinforce the commitment to the principal objective of emissions reduction. In fact, the opposite has been the case. Developing solar and wind power is a relatively expensive way to cut emissions, and the EU commitment has encouraged member states to put in place costly subsidy programmes. Energy-intensive manufacturers are warning that they are being driven out of Europe, and if they relocate to countries where production would be less efficient and create higher greenhouse gas emissions, the net benefit to the climate will be zero.
FT 1st Dec 2013 read more »
World Energy
The World Energy Council (WEC) has called for policymakers and industry leaders to ‘get real’ on global energy policy, claiming that the global financial crisis, Fukushima, and the development of unconventional hydrocarbons has changed the context and that, as a consequence, the CO2 targets for 2050 will be missed, unless significant changes and policy frameworks are adopted. It says that energy demand will continue to increase and double by 2050, primarily driven by economic growth in non-OECD countries, mostly using fossil fuels. In its 2050 global energy market-led ‘Jazz’ scenario, the share of renewables in electricity generation is 31% and in it’s more policy-led ‘Symphony’ scenario, 48%, shifting in total energy terms, ‘from 15% today to a figure between 20% and 30% in 2050’. That is a big jump for the traditionally rather conservative WEC, but still a way off the near 100% many studies claim is actually possible.
Environmental Research Blog 30th Nov 2013 read more »
Iran – nuclear agreement
The interim nuclear agreement with Iran, touted by its proponents as a “historic deal”, has been described as a “historic mistake” by Israel’s prime minister, Binyamin Netanyahu. How will Israel react in the months ahead? The answer is to be found in the struggle to shape the endgame deal. The six-month deal is a mixed bag. On the positive side it stems the tide of Iranian nuclearisation by setting its clock slightly back, temporarily capping Iran’s nuclear facilities, array of centrifuges and stockpile of low-enriched uranium, and improving the monitoring regime. On the other hand, Iranian enrichment has been accepted as part of the endgame; the clock in the uranium and plutonium tracks continues to tick, albeit at a slower pace.
Guardian 1st Dec 2013 read more »
Iran – new reactors
Iran and Russia are in talks to build another nuclear plant at Bushehr, with construction set to begin in 2014.
Middle East Online 1st Dec 2013 read more »
Test Veterans
The nuclear test survivors are the closest they have ever been to winning recognition. In 10 years of covering their campaign I have never seen them nearer to finally getting the official salute they deserve. They have 80 MPs, lawyers, and charity experts fighting to get them where they ought to be – front and centre in the national consciousness, just for a moment. For 60 years Ministry of Defence bureaucrats have denied the obvious: that nuclear bombs could cause any harm to thousands of men stood below in nothing but cotton shorts. They’ve never answered the question why, if it was so safe, they didn’t explode them over Surrey.
Mirror 1st Dec 2013 read more »
Every other nuclear power on Earth – America, Australia, New Zealand, France, Russia and even China – recognises and compensates their atomic veterans.
Mirror 1st Dec 2013 read more »
Energy Efficiency
Ten thousand energy efficient and eco-friendly street lamps are to be installed in Glasgow to replace outdated sodium lights and cut carbon emissions.
Central Scotland Green Network 25th Nov 2013 read more »
More than half a million homes are wasting hundreds of pounds a year on energy because of delays to the Government’s subsidised insulation scheme, a report has found. As the coalition prepared to propose cutting £50 from fuel bills, it faced criticism over rising bills caused by a big fall in loft insulations. Only 120,000 lofts were insulated in the first six months of 2013 compared with 860,000 in the last six months of 2012. There was a similar decline in the number of cavity walls insulated over the same period, down from 360,000 to 110,000. Solid-wall insulations fell from 60,000 to 5,000, according to the Green Alliance think-tank, which based its report on figures from the Department of Energy and Climate Change. At this rate it would take 24 years to insulate the remaining 5.7 million poorly insulated lofts and 770 years to insulate 7.7 million solid-wall homes, the report said.
Times 2nd Dec 2013 read more »
Fuel Poverty
A committee of MPs has accused ministers of “shifting the goal posts” to reduce the number of households in England classed as in fuel poverty. The definition of fuel poverty would be changed by amendments to the Energy Bill so that 2.4 million were classed as fuel poor rather than 3.2 million. The Environmental Audit Committee says that is unacceptable. The government insists the changes help “to get a better understanding of the causes and depth of fuel poverty”.
BBC 2nd Dec 2013 read more »
The Government is attempting to manipulate official figures to bring down fuel poverty, it is claimed today. A clause in the Energy Bill will change the definition of the key poverty indicator, reducing the number of English households counted as “fuel-poor” from 3.2 million to 2.4 million overnight. The EAC report also criticised the Government’s decision to weaken its legislative commitment to fuel poverty. This means it will no longer require the elimination of fuel poverty by 2016, but instead ask for it to be addressed by a date to be set later.
Independent 2nd Dec 2013 read more »
The government has “shifted the goal posts” by rolling back on a commitment to eradicate fuel poverty and fiddling official statistics, according to a new report. Parliament’s Environmental Audit Committee says government programmes to help low-income households insulate their homes are a vital part of the solution, and should not be cut.
Carbon Brief 2nd Dec 2013 read more »
