Blog row in UK between EWEA and Foratom regarding magnitude of subsidies

The European Wind Energy Association (EWEA) has published a blog titled Nuclear Decommissioning Costs Amount to €66 Billion in UK alone that is a direct response to a post on Foratom titled To subsidise or not to subsidise: that is the question. There seems to be a conflict brewing over energy-related actions that is worth following.

Foratom’s post provides some details about the amount of money European government have spent in recent years to encourage renewable (aka unreliable) power systems and the considerable amount that they have forced electricity consumers to spend by mandating renewable energy feed in tariffs.

Many countries in the EU are subsidising heavily renewables and the figures are striking. EU states invested around €35 billion in renewable energy infrastructures in 2009. Subsidies in the form of feed-in tariffs (FIT) that oblige energy retailers to buy power from renewables at a fixed price (usually above the market price), over a fixed period of years are widespread. 23 out of 27 member states use that kind of subsidies. In the UK, subsidies for renewables and notably the so-called Renewable Obligation increased consumers’ electricity bills in total by €1.34 billion in 2008 and 2009. In Germany, total subsidies amount to €5 billion per year for only 7% of electricity production from wind and solar. In Slovakia, the cost of subsidies for solar panels jumped from €10 million in 2010 to €117 million in 2011, etc…

It seems that the EWEA is offended that the nuclear industry would have the gall to point out that purveyors of unreliable energy systems are the recipient of massive, continuing subsidies while nuclear energy receives little to no financial encouragement from European governments. In fact, the situation is quite the opposite in many European Union member states, which impose special, nuclear-only taxes.

Furthermore, in some countries the so-called windfall profits of nuclear power are taxed in order to finance renewables. Germany had introduced a nuclear fuel tax in 2010 as part of a deal to extend the operational duration of nuclear power plants. The tax has been abandoned following the decision of the German government to accelerate nuclear phase-out. Sweden taxes nuclear power at about €0.67 cents/kWh, which makes up about one third of the operating costs for nuclear plants. In Belgium, the government proposed to increase the nuclear tax to €550 million per year despite its decision to close two of the country’s oldest reactors by 2015.

The Foratom blog correctly points out that nuclear plant decommissioning costs are accounted for in the initial capital cost budget because funds are set aside when the plants are built. Those decommissioning funds grow with time and are available when the plant reaches its end of life. In addition, Foratom correctly points out that research and development funds for nuclear fission are quite modest.

The budget for nuclear fission in the EU’s 7th programme for research and development (FP7) is €280 million over the 5-year period 2007-11. It is only 0.5% of the overall FP7 budget.

The EWEA claims that in the UK alone, nuclear decommissioning costs may run as high as €66 billion. The blog also claims that nuclear research and development expenditures are several orders of magnitude higher than reported by Foratom.

They might not seem much for Foratom but they are a lot more than renewables get! According to the OECD/IEA Clean Energy Progress Report 2011 governments in 23 leading nations (including 8 EU members) spent $56 billion on nuclear R&D 2000-2010 compared to just $16 billion on all renewables (and ‘renewables’ are many technologies: wind, solar, tidal, wave, geothermal etc).

I suspect that the EWEA accounting method includes the cost of decommissioning weapons material production facility and that their “nuclear” R&D figure includes all of the silly expenditures that have been aimed at chasing the fusion chimera. It is not honest accounting to attribute those costs to nuclear energy; every once in a while even the proponents of fusion will have an honest moment and reveal the fact that they are not really an energy technology program after all.

I offered the following comment on the EWEA blog. Perhaps others will join in and mention how the cost of nuclear R&D has been outrageously inflated by including fusion expenditures.

I am not as familiar with provisions for decommissioning in the UK as I am with the provisions in the US. Here, every nuclear electricity production facility is required by law to put aside sufficient funds for decommissioning out of the revenues generated by the facility. These funds are subject to regulatory review every few years and the companies are required to make adjustments depending on market conditions. No public funds are used at all.

We do, however, spend several billion dollars every year on “nuclear decommissioning” and clean up costs at national weapons production facilities that have nothing at all to do with electricity production. Is it possible that the EWEA figures above include government expenditures for similar weapons related activities?

Rod Adams
Publisher, Atomic Insights

About Rod Adams

17 Responses to “Blog row in UK between EWEA and Foratom regarding magnitude of subsidies”

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  1. Gareth Fairclough says:

    Strange, there don’t seem to be any comments at all on the EWEA blog.
    I guess they made for uncomfortable reading?

    • Twominds says:

      I can’t find it either. I’ve posted a line at EWEA asking for a link to the discussion. Now I’ll wait and see if they’ll react.

      • Twominds says:

        I had a little conversation at the EWEA blog and it seems the blog row consists of a post at each of the blogs, but no online discussion. But at least the comments section at EWEA is open again for reactions, so a discussion could get started there. I’m reluctant to participate, because I know very little about energy subsidies. But there must be people here who can comment knowledgeably on EWAE’s position.

  2. Pete51 says:

    On the subject of US decommissioning, it looks like Kewaunee is going to start spending its decommissioning funds in the next few years. This is even worse than the Zion shut down.

    • seth says:

      Yeah Rod are you working on a report on what Big Oil scam the utility is working on in order to justify shutting down Kewaunee.

  3. Steve says:

    I think this 66 billion also includes decommissioning experimental and research reactor such as the fast breeder reactor at Dounreay, which again isn’t really relevant to new build.

    Out of interest, can anyone explain in the US is the money put aside for decommissioning a nuclear power station separate from the nuclear waste fund of $1 per 1000kwh, and if so, how much is it, how is it calculated and who collects and manages it?

    • Brian Mays says:

      Out of interest, can anyone explain in the US is the money put aside for decommissioning a nuclear power station separate from the nuclear waste fund of $1 per 1000kwh, and if so, how much is it, how is it calculated and who collects and manages it?

      The short answer is, yes, it is an entirely separate fund. Every nuclear power plant license is required by the NRC to maintain a decommissioning fund and report on its status at least once every 2 years.

      The long answer can be found here.

      • Steve says:

        Thank you very much for that. I agree very much with your comment below too, it is utterly bizarre that anyone who is anti-nuclear should be quoting from that Chris Huhne speech. It was a speech from someone who has been anti-nuke his whole life coming round to being for it (very Gwyneth Cravens in that respect). Anyway he is no longer energy minister in the UK. He had to resign about a year ago.

  4. Julian Scola says:

    Dear Rod,
    It is not EWEA that says UK nuclear decommissioning costs 66bn Euros – it was the then Energy Minister Chris Huhne. He was talking about nuclear energy, not weapon decommissioning.
    There are several comments on our blog, including yours. Not sure why you think there are not.
    The nuclear R&D figure may include nuclear fusion, just as the renewables figure includes all renewables. However, it is OECD/IEA’s ‘accounting’ not EWEA’s.
    I hope that helps.

    • Brian Mays says:

      Dear Julian,

      Like almost all wind advocates that I have encountered over the years (particularly the professionals), you appear to be a master of picking and choosing the statistics, quotes, and “facts” that you like, while ignoring the inconvenient ones that don’t support your one-sided sales pitch.

      Yes, it is true that Huhne did cite that figure — originally expressed in British pounds and converted by the EWEA to euros — but your use of these figures is misleading at best. For example, in the very same speech, Mr. Huhne also said the following (emphasis mine):

      Of the three large scale low carbon technologies, the costs estimated by Arup are as follows. Offshore wind is assessed at £130 per megawatt hour, gas with carbon capture at £95 per megawatt hour, and nuclear at £66 per megawatt hour. These figures take account of waste and decommissioning costs, so nuclear should still be the cheapest low carbon source of electricity.

      I’ve already pointed out in a comment on your blog (if it gets through moderation), that the UK’s decommissioning costs cover a span of time from 1956. A subsidy of 5 billion euros a year over that length time would come to 280 billion euros. Even with the gross mismanagement that Huhne was talking about, nuclear still seems like a really good deal.

      I guess that I should also point out that, in 2010 (the last year for which I have reliable figures), both Germany and the UK generated substantially more of their electricity from nuclear than from non-hydro renewables.

    • Rod Adams says:

      @Julian Scola

      The fact that you have a source for the number that you chose to publish on your blog does not make it correct, especially when the source is a man who has long been publicly opposed to the use of nuclear energy, like Chris Huhne. Yes, he has recently taken a slightly different position on the matter, but that is largely a matter of recognizing that nuclear energy production can actually pay for itself and supply a large quantity of reliable, emission free power. Like many other government officials, he is also looking at the nuclear industry as a potential source of revenue that might be able to take on some of the legacy costs that the government has accumulated through its weapons related programs that only funded a part of the cost — ignoring any real provisions for clean up.

      Yes, the OECD/IEA often lumps nuclear fusion, a technology that is far from even laboratory demonstration of a sustainable, energy producing reaction, with nuclear fission, a technology that has been producing commercial quantities of reliable power since 1956, just 14 years after the very first controlled chain reaction was produced. The OECD/IEA is no friend of nuclear energy as a reliable replacement for oil, natural gas and coal. The people there LIKE the income produced by selling fossil fuels.

      I never said that you were not posting comments. That was one of the other commenters here who visited your site before my comment had made it through moderation.

      • jmdesp says:

        Rod, I’ve just sent a comment in response to Brian with 3 links about where he can find newer data than 2010 for Europe which didn’t get through. It’s probably in the spam box.

  5. Robert Steinhaus says:

    Rod suggests –
    “every once in a while even the proponents of fusion will have an honest moment and reveal the fact that they are not really an energy technology program after all.”

    Some fusion experiments, like NIF at the Lawrence Livermore National Lab, have been pursued for more than one reason. During the course of the NIF project, there have been at least three different program justifications offered for developing this advanced technology.

    1) Demonstration of inertial confinement Deuterium – Tritium fusion and “break-even” production of net energy from fusion

    2) Weapons test replacement – replacing practical underground nuclear testing with micro-plasma experiments in the NIF target chamber as a means to support design of new nuclear weapons and to provide help to verify the safety and reliability of existing weapons.

    3) Advance our understanding of the universe and high energy density science –

    (The reality) –
    Every major nuclear research program is constantly at risk of early termination, and this is particularly a problem as a new Administration comes into office and makes reassessments of the research priorities of the previous Administration. To guide a large project through to successful completion can involve shifting emphasis between multiple technology benefits.

  6. Robert Steinhaus says:

    Rod – There is a form production of energy from nuclear fusion that is safe, practical, and reliable and requires no scientific breakthroughs to economically build at commercial scale today.

    Since the 1952 Ivy Mike nuclear test, LANL and LLNL field test divisions have routinely and on demand been able to achieve fusion ignition through use of nuclear fission. Fission ignited nuclear fusion worked 4+ years before the first commercial power reactor reached criticality and produced a watt of power into the power grid. Fission ignited Fusion could be used today to produce electricity at a cost that rivals any other power generating technology contender.

    LLNL’s Dr. Ralph Moir provided a very practical, well thought out, low cost design for a fission ignited fusion reactor. This technology is called PACER fusion, and in its most robust, economical, and lowest nuclear waste generating design configuration, runs in the fusion enhanced Thorium fuel cycle.

    (Practical fusion to fully power the planet longer than the earth has existed or the sun will shine –

  7. Robert Steinhaus says:

    PACER Fusion –
    Field demonstrated practical fusion to fully power the planet longer than the earth has existed or the sun will shine –

    • Robert Steinhaus says:

      I apologize for the redundant post above.
      My preceding post seemed to disappear in an email verification process, and I mistakenly posted the shorter redundant post when the first post did not appear.
      – (sorry)