Questions over representation of nuclear in EC report on energy subsidies

3 November 2014

Foratom, the Brussels-based trade organisation that represents the interests of the European nuclear energy industry has written to the European Commission questioning the representation of nuclear power subsidies in a recent report on energy subsidies.

The interim report 'Subsidies and costs of EU energy,' was published on 10 October. It found that in 2012 the total value of public interventions in energy in the EU28 were €120-140 billion. The largest amounts of public support in 2012 went to renewables, in particular to solar (€14.7bn) and onshore wind (€10.1bn), followed by biomass (€8.3bn) and hydropower (€5.2bn). Coal received €10.1bn in subsidies in 2012, followed by nuclear (€7bn) and natural gas (about €5.2bn).

Foratom said in its 29 October letter that it supports the European Commission's desire to shed more light on the complex and important issue of energy subsidies. But it was sceptical that a study of such complexity could have been completed satisfactorily in the short time allotted.

"We believe that while Ecofys and partners have done an excellent job so far, further statistical and analytical work needs to be done to improve the methodology of the study, to consolidate available data and, consequently, provide a final report that will allow more meaningful conclusions to be drawn," it said.

In particular, Foratom questioned the breakdown of nuclear subsidies, which shows that nearly €3 billion comes from the UK and €3.3 billion from EU funds.

The contribution of the UK appears to correspond roughly to the annual budget of the government's Nuclear Decommissioning Authority (NDA), of which a large part is spent on the decommissioning of nuclear weapons' material. Foratom therefore questions the legitimacy of linking this military legacy to the current civil power production.

In addition, according to Foratom's interpretation, the €3.3 billion EU-level funding relates to the decommissioning of Soviet-era reactors in Slovakia, Bulgaria and Lithuania, which were required to close when those countries joined the EU. "It is, in our view, unreasonable for the Interim Report to apportion all that funding to nuclear power production from other reactors," Foratom said.

"If one discounts the distorting effects of UK and EU-level support, the remaining nuclear 'subsidy' in 2012 would have been only around €1 billion. This compares with the €41 billion of direct support given in that year to intermittent renewables."

Foratom also said it found the method of calculating uranium depletion and its effect on external costs 'misleading and unclear.'

It says it looks forward to further dialogue with the European Commission and expects that 'a more accurate representation' of nuclear power subsidies can be achieved in the anticipated final report.

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