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European Commission attempts to open door for subsidies to nuclear energy

Feature story - July 19, 2013
The European Commission is due to release new draft guidelines for subsidies in the fields of the environment and energy. The guidelines, which are being agreed internally by the Commission over the course of the summer, will be put to a public consultation in September.

In times of economic crisis and constraints on public budgets, the Commission wants to rationalise the use of these subsidies, which are known as state aid. However, under pressure from some European governments (particularly the UK, but also France and Poland), the Commission is attempting to introduce rules that would allow the direct use of taxpayers’ money to support new nuclear power plants, diverting investments away from renewables [1].

Greenpeace believes that these changes to state aid rules would be in breach of EU law. In addition, they would suffocate innovation and competitiveness in the energy sector by absorbing the largest share of public investments. Greenpeace warns that subsidies for the nuclear industry would deliver fewer jobs and carbon reductions than support schemes for renewables, while creating intolerable health and environmental risks.

Threat to EU climate policy

By opening the door to subsidies for the nuclear industry, the Commission is threatening Europe’s ability to achieve targets to cut carbon emissions by 2020. The contribution of nuclear power to carbon reductions is modest, in quantitative terms, and ineffective, when costs and the time needed to build and bring nuclear power station on line are taken into account. In an ultra-optimistic scenario, tripling the existing global nuclear capacity (which would mean putting a new reactor on line every two weeks from now until 2050) would only lead to a 6 per cent reduction of carbon emissions in the power sector [2].

This small reduction would come at an exceptionally high cost to the taxpayer, which has already been indirectly subsidising nuclear power for more than half a century. For instance, in an attempt to recover some of the prohibitive costs of building two new reactors in the UK, French energy giant EDF is demanding a guaranteed electricity price of twice the current UK market price.

The construction of Europe’s two newest nuclear plants, in Flamanville, France, and Olkiluoto, Finland, is years behind schedule and two or three times more expensive than originally budgeted. The other nuclear plant currently being built in Europe, in Mohovce, Slovakia, is still under construction over 25 years after work started.

The nuclear industry has shown that it is unable and/or unwilling to take responsibility for the costs of treating and handling radioactive waste, for decommissioning old installations and for costs as a result of accidents. In fact, rules limiting liability mean that the financial risks of major nuclear accidents are always passed on to European taxpayers [3].

Threat to sustainable energy choices

Under EU competition law, state aid can only be authorised if it meets the “common interest” of the EU [4]. Several EU countries (including Germany, Austria, Italy, Denmark, Ireland and Luxembourg) do not see a role for nuclear power in their energy systems and have moved away from it. Subsidies for the nuclear industry would expose these countries and their citizens to the environmental and health risks associated with nuclear power. Furthermore, public acceptance for nuclear power is considerably low in Europe [5], making a derogation to EU internal market rules in the “common interest” even more implausible.

Threat to an integrated energy system

Subsidies to the nuclear industry would hinder the integration of the EU energy market and the transition towards a cleaner and smarter energy system. The completion of the internal market requires investments in smarter interconnection between different parts of the grid, capable of integrating renewable energy sources and fully exploiting their potential. However, the subsidised construction of new nuclear plants would perpetuate the fragmentation of the EU energy market, exacerbating the clash between inflexible and wasteful (‘baseload’) energy from nuclear power and flexible energy from renewables [6]. Support for nuclear subsidies would also impede the decentralisation of power generation, which largely depends on local energy production from renewables.

Threat to competition

State aid for nuclear power would hinder competition in the energy market by favouring a handful of big energy companies. Even with subsidies, only energy giants would be able to access the necessary capital for nuclear projects. This imbalance is in sharp contrast with the principles of liberalisation for European electricity markets. Investments in renewables, on the other hand, encourage competition because they favour the growth of multiple, small-scale operators.

Despite decades of direct and indirect subsidies for fossil fuels and nuclear industries, renewables are growing strongly and are on the verge of being able to compete with conventional energy sources. However, renewables can only develop their full potential if market barriers are removed and indirect subsidies for fossil fuels and nuclear power are scrapped.

To allow renewables to compete, the EU and national governments should redress the imbalance in the market with strong policies to develop renewables and clear and ambitious targets for climate and energy policy for 2030 and beyond [7]. Subsidies for the nuclear industry would make achieving a level playing field in the energy market virtually impossible, locking the European energy system into dirty, expensive and dangerous technologies for decades to come.


[1] National governments can decide which projects in their country are granted subsidies, but can only do so in accordance with the guidelines set out by the European Commission.

[2] International Energy Agency (June 2008), Energy Technology Perspective 2008: http://www.iea.org/media/etp/ETP2008.pdf.

[3] Depending on the applicable international convention, maximum liability for nuclear operators is capped at €1.2 billion. The Fukushima nuclear disaster is estimated to cost up to €169 billion (JCER, FY2020 Nuclear Generating Cost Treble Pre-Accident Level – Huge Price Tag on Fukushima Accident Cleanup, Japanese Centre for Economic Research, 19 July 2011). The French Institute for Radiological Protection and Nuclear Safety (IRSN) estimated that a nuclear accident in France would cost between €120 and €430 billion (see: http://www.reuters.com/article/2013/02/07/us-france-nuclear-disaster-cost-idUSBRE91603X20130207). See: Greenpeace, February 2012, Lessons from Fukushima: http://www.greenpeace.org/international/en/publications/Campaign-reports/Nuclear-reports/Lessons-from-Fukushima. The nuclear industry’s inability to take full financial responsibility would also make state aid for nuclear power contrary to the EU’s fundamental polluter pays principle (See: FEU Treaty, Article 191: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E191:EN:NOT.).

[4] See FEU Treaty, Article 107(3)(c): http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E107:EN:NOT.

[5] Ipsos-Mori opinion poll: http://www.ipsos-mori.com/Assets/Docs/Polls/ipsos-global-advisor-nuclear-power-june-2011.pdf.

[6] Greenpeace (2011), Battle of the Grids Report: http://www.greenpeace.org/international/en/publications/reports/Battle-of-the-grids.

[7] Greenpeace (2012), Energy Revolution Report: http://www.greenpeace.org/international/en/campaigns/climate-change/energyrevolution.

Contact: Andrea Carta - Greenpeace EU legal strategist: +32 (0)496 161582,

www.greenpeace.eu | Breaking news & comment on EU affairs: http://www.twitter.com/GreenpeaceEU

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