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UK nuclear and renewables problems point to long-term energy insecurity

Author : Alan Franck, Hazardex Editor

15 October 2014

The UK’s proposed new Hinkley Point C nuclear power station has been opposed by environmental groups and campaigners who consider the billions to be paid to underwrite the construction of the plant and pay for the electricity generated will be a colossal waste of money.

Austrian Chancellor Werner Faymann
Austrian Chancellor Werner Faymann

At the end of 2013, the EU’s Energy Commissioner described the deal as a throwback to the Soviet era. Nevertheless, the EU Competition Commissioner said in September he is likely to recommend that the Commission greenlight the proposal.

The European Commission has been investigating whether the terms of the subsidy deal struck between energy company EDF and the UK Government constituted illegal state aid. Under the terms of the deal, UK energy consumers could pay EDF and its partners as much as £17.6bn in subsidies over a 35-year period for electricity from the new plant.

The project is a crucial part of the UK’s programme to replace a fifth of its ageing nuclear and coal-fired generating capacity.

Austria's Minister for the Environment, Andra Rupprechter, told the Kurier newspaper: “This scandal has to be fought by all legal means possible.”

And the country’s Chancellor, Werner Faymann, sent a letter to the European Commission's president Jose Manuel Barroso in early October saying Austria would take direct action. "Should the EU Commission undertake this step, then it must expect a lawsuit in the highest court," Faymann said.

Together with Austria, which has no nuclear power stations, a number of other countries have also expressed concerns that commission approval would undermine the EU’s stated policy to promote solar and wind power, and any legal action is likely to further delay UK nuclear plans.

This latest question mark over the future of new nuclear comes at a time when the UK’s other low carbon energy generation proposals have come in for highly critical scrutiny.

The House of Commons Public Accounts Committee (PAC), which oversees government spending, has said contracts for renewable electricity signed by DECC in May for eight wind and biomass projects were poorly conceived and managed. The committee compared the contracts to PFI, the private finance initiative, widely criticised for giving poor value for taxpayers.

The PAC says that by committing 58% of the cash for renewable contracts under early transitional arrangements, DECC has severely constrained the amount available to be awarded later, putting any long-term renewables programme in jeopardy.

With brownouts a possibility in the UK in 2015 because of the failure to replace generating capacity closed over the last few years, these latest problems point towards energy supply becoming a structural problem for the UK not just over the next few years, but well into the future.

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