PowerSwitch

The government is launching a last-ditch attempt to sign up energy companies to build new nuclear power stations by proposing to sign contracts guaranteeing subsidies for up to 40 years.

The coalition agreement reached between the Conservatives and Liberal Democrats in 2010 promised that nuclear power stations would be built only if the industry got no public subsidy, but costly overruns for new reactors overseas and the exit of several major utilities from the UK programme, most recently Centrica, have driven ministers and officials to backtrack on that pledge and accept they will have to provide financial support.

The Guardian has learned that ministers, intent on keeping the guaranteed wholesale cost of each unit of energy below the politically crucial figure of £100 per megawatt hour, are proposing to extend contracts from the 20 years originally envisaged to at least 30 and possibly as long as 40 years.

A leading EU lawyer, backed by the Vice Chair of the European Group of Green MEPs, has declared the British plan to subsidise nuclear power as 'illegal'.

The proposals are being assessed by the British parliament but the subsidy instruments, named contracts-for-difference (CfDs), will also require approval from the European Commission, the EU executive, under state aid rules.

"Neither under the current (...) nor under possible future frameworks could the CfD scheme for nuclear generators be declared compatible with European state aid rules," said Doerte Fouquet, a lawyer specialised in EU law at Becker Buettner Held in Brussels.

kenneal - lagger wrote:If nuclear requires subsidy in the UK and it is illegal, how are they getting away with it on the continent?

kenneal - lagger wrote:If nuclear requires subsidy in the UK and it is illegal, how are they getting away with it on the continent?