Legal bid to put halt to construction of nuclear power plants

Lawyers send complaint to European Commission about subsidies for nuclear power

A formal complaint about subsidies for nuclear power has been sent to the European Commission. If it is upheld, it unlikely that any new nuclear power stations will be built in the UK or elsewhere in the EU. The complaint may be followed by legal action in the courts or actions by politicians to reduce or remove subsidies for nuclear power.

The complaint has been prepared by lawyers for the Energy Fair group, with several other environmental groups and environmentalists participating.

One of the largest subsidies in the complaint is the cap on liabilities for nuclear accidents. “Like car drivers, the operators of nuclear plants should be properly insured” says Energy Fair.

It has been calculated that, if nuclear operators were fully insured against the cost of nuclear disasters like those at Chernobyl and Fukushima, the price of nuclear electricity would rise by at least 14 Eurocents per kWh and perhaps as much as 2.36 Euros, depending on assumptions made. Even with the minimum increase, nuclear electricity would become quite uncompetitive.

Other subsidies in the complaint are: that uranium is exempted from a tax on fuels used to generate electricity, and that the UK government is proposing to provide support for the disposal of nuclear waste, and to provide a subsidy in the form of a “feed-in tariff with contracts for difference”. Research by Energy Fair shows that there are several other subsidies for nuclear power in the UK and that proposals by the government would introduce more.

Caroline Lucas, MP for Brighton Pavilion and leader of the Green party of England and Wales, said: “The Government’s planned Electricity Market Reform is set to rig the energy market in favour of nuclear, with the introduction of a carbon price floor likely to result in huge windfall handouts of around £50m a year to existing nuclear generators.

"Despite persistent denials by Ministers, it’s clear that this is a subsidy by another name, which makes a mockery of the Coalition pledge not to gift public money to this already established industry. If these subsidies are found to be unlawful, I trust the European Commission will take action and prevent the UK’s nuclear plans from seriously undermining the shift towards new green energy.”

Dr Dörte Fouquet, the lawyer who has been leading the preparation of the complaint, said: “The European Union has opted for opening up the energy market and is vigilant about creating a level playing field. In this regard, the Commission over the last years repeatedly underlined that distortion of the market is to a large extent caused by subsidies to the incumbents in the energy sector. This complaint aims to shed some light on the recent shift in the energy policy of the United Kingdom where strong signals point to yet another set of subsidies to the nuclear power plant operators.”

“There is no justification of any kind for subsidising nuclear power” says Dr Gerry Wolff of Energy Fair. “It is a mature technology that should be commercially viable without support. Renewables have clear advantages in cost, speed of construction, security of energy supplies, and effectiveness in cutting emissions of CO2. There are more than enough to meet our needs now and for the foreseeable future, they provide diversity in energy supplies, and they have none of the headaches of nuclear power.”

FACTFILE:
1 Lawyer Dr Dörte Fouquet, with a lawyer colleague, has prepared the formal complaint to the European Commission (Directorate-General (DG) for Competition) on behalf of Energy Fair and other environmental groups and environmentalists (see note 3 below). Apart from her legal work, Dr Fouquet is Director of the European Renewable Energies Federation (EREF, www.eref-europe.org/).

2 In summary, the “grounds of complaint” are:

* That the so-called “carbon price floor”, introduced in the Finance Act 2011, is a de facto tax on fuels used for the generation of electricity and that the exemption of uranium from that tax is incompatible with EU state aid rules, Articles 107 and 108 of the Treaty on the Functioning of the European Union (TFEU).

* That the cap on liabilities for nuclear accidents of the Paris/Brussels Conventions constitutes state aid in the sense of Article 107 of the TFEU. Since Article 351 of the TFEU requires EU Member States to adapt and align their pre-existing Treaty obligations to be compliant with EU law, since relevant UK laws have not been amended in the light of that requirement, and since the cap on liabilities has not been notified to the European Commission, it is, technically, illegal under EU law.

* That the proposed cap on liabilities of nuclear operators for the disposal of nuclear waste falls under the definition of state aid in Article 107(1) of the TFEU; that, unless or until it is notified to the Commission, it is illegal under EU law; and that, since the measure cannot be justified (Article 107(3) of the TFEU), it should not be approved by the Commission and should not enter into force.

* That the proposed “feed-in tariff with contracts for difference”, as applied to nuclear power, is, under Article 34 of the TFEU, a measure having an effect that is equivalent to “quantitative restrictions on imports” and is thus contrary to EU law.

3 This action by Energy Fair -- making a formal complaint to the European Commission about subsidies for nuclear power -- is endorsed by the following people and organisations: Tom Burke CBE (www.e3g.org/about/Tom-Burke/), Campaign for Nuclear Disarmament (www.cnduk.org/), Eurosolar (www.eurosolar.de/en/), Jean Lambert MEP (www.jeanlambertmep.org.uk/), Caroline Lucas MP (www.carolinelucas.com/cl.html), Nuclear Free Local Authorities (nfznsc.gn.apc.org/), Michael Meacher MP (www.michaelmeacher.info/weblog/), People Against Wylfa B (PAWB, www.stop-wylfa.org/), Jonathon Porritt CBE (www.jonathonporritt.com/), Dr Jeremy Leggett and Solarcentury (www.solarcentury.co.uk/), Sortir du Nucléaire (www.sortirdunucleaire.org/), Keith Taylor MEP (www.keithtaylormep.org.uk/), and Urgewald (http://urgewald.org/).

4 Research by the Energy Fair group has identified 7 existing subsidies for nuclear power and at least 2 potential subsidies. They are summarised in “Forms of support for nuclear power” (PDF, www.mng.org.uk/ns) and described more fully in the following two documents, each with an executive summary:

* “Subsidies for nuclear power in the UK government’s proposals for electricity market reform” (PDF, www.mng.org.uk/emrdoc).

* “Nuclear Subsidies” (PDF, www.mng.org.uk/nsubsidies).

5 A report by the Insurance Forum, Leipzig, a company that specialises in actuarial calculations, shows that full insurance against nuclear disasters would increase the price of nuclear electricity by a range of values -- Euro 0.14 per kWh up to Euro 2.36 per kWh -- depending on assumptions made (see “Calculating a risk-appropriate insurance premium to cover third-party liability risks that result from operation of nuclear power plants”, www.mng.org.uk/gh/private/20111006_NPP_Insurance_Study_Versi...). Without the other subsidies for nuclear power, it would be even more expensive.

Counting only the Three Mile Island disaster in 1979, Chernobyl in 1986 and Fukushima in 2011 -- and excluding the near-disasters at the Narora nuclear plant in India in 1993, the Davis-Besse plant in Ohio in 2002, and the Forsmark plant in Sweden in 2006 -- we are averaging one nuclear disaster every 11 years.

6 With regard to the “carbon price floor” (now part of the Finance Act 2011):

* In Parliament on the 9th of May 2011, the then Economic Secretary, Justine Greening MP, said: “The existing nuclear sector is likely to benefit by an average of £50 million per annum to 2030 due to higher wholesale electricity prices.”

* According to calculations by WWF and Greenpeace, the measure could result in windfall profits for existing nuclear generators of up to £3.43 billion between 2013 and 2026 (“Energy bills to rise as nuclear gets £3.43 billion for doing nothing”, WWF press release, 2011-02-14, www.wwf.org.uk/what_we_do/press_centre/?4629/Energy-bills-to...).

7 Research by Energy Fair shows that renewables can, in general, be built much faster than nuclear power stations, they are cheaper than nuclear power, they provide greater security in energy supplies than nuclear power, they are substantially more effective in cutting emissions of CO2, there are more than enough to meet our needs now and for the foreseeable future, they provide diversity in energy supplies, and they have none of the problems of nuclear power (see www.energyfair.org.uk/misallocation).

In terms of the fight against climate change, nuclear power diverts attention, effort, and large amounts of money away from renewables and the conservation of energy, where those resources would be better spent.