The European Commission published on 10 October 2014 an interim report entitled Subsidies and costs of EU energy. Whilst welcoming the Ecofys interim report, FORATOM sent a letter to the European Commission to draw its attention to the following key points:
The nuclear energy industry has benefited from a very small subsidy of around €7 billion out of a total annual support of €122 billion for all energies in 2012. In addition the breakdown 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 questions the legitimacy of linking this military legacy" to the current civil power production.
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.
As a consequence, it could be said that the total support for nuclear amounts to €1 billion. This compares with direct support for intermittent renewables in that year running at €41 billion per year.
With regards to direct historic support, FORATOM is also puzzled that nuclear investments reportedly make up such a large proportion of the total and would like to see more details as to how these figures were calculated, why the range for nuclear (€2-8 billion) is so large, and why only nuclear, coal and hydro were included.
As far as external costs are concerned, the whole method of calculating uranium depletion and its effect on external costs is misleading and unclear. Uranium is a minor part of energy production and costs and current reserves can supply nuclear reactors for around 300 years at current rates of consumption. Furthermore there are a number of proven alternatives that can readily be deployed.
FORATOM 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.
For further information, click here to read the full FORATOM letter.