guardian.co.uk, Wednesday 2 June 2010 19.13 BST
• Reactors builder won big concessions on key issues
• Rethink on costs is in effect a subsidy, says Greenpeace
The nuclear industry is being offered what campaigners claim is a taxpayer subsidy on the disposal costs of waste from new reactors following a secret lobbying campaign, the Guardian has learned.
The revelation will put further scrutiny on the new government’s promise that there will be no subsidy for nuclear power. Liberal Democrat Chris Huhne, the new energy and climate change secretary of state, admitted to the Guardian this week that the government already faces a £4bn funding black hole over existing radioactive waste.
The previous government had planned to charge the industry a high, fixed, disposal levy tied to the amount of nuclear waste it produced. It had also originally told the industry that responsibility for the waste should be transferred to the state only once the waste had been disposed of, at least 110 years from the start of a reactor’s operations. Both proposals were deeply unpopular with the industry.
In March, the Labour government published revised proposals that made significant concessions on both issues. Consultation on the plans will conclude this month. A spokesman for the energy department said the consultation was continuing but declined to comment on whether the new government would take a different approach to the previous administration.
Documents released under a freedom of information request reveal the extent of behind-the-scenes lobbying last year in Whitehall by EDF Energy, the French firm that wants to build the first new reactors in the UK for decades. The lobbying focused on the two key proposals which were revised in March.
In one meeting with officials from the energy department in July last year, EDF Energy’s presentation concluded that the original proposals were “non-acceptable” [sic]. In another meeting in October, the presentation warned: “At current levels, [the proposed] fixed price model will significantly impact the economics of NNB [nuclear new build] in the UK and could make an investment unattractive.” In a letter in July to the department, the company even warned that the cost calculations could “be open to challenge in future on the grounds of prudency”.
A spokesman from Greenpeace said: “These documents blow EDF’s claim that they won’t need any subsidies for new nuclear clean out of the water. They know full well that the economics of nuclear don’t stack up and that new reactors will only ever happen if the British taxpayer is forced yet again to carry the atomic can.”
In an effort to protect the taxpayer from having to pick up the tab, last year the government proposed charging a very high fixed unit price for waste disposal. But EDF argued it was much too high. The revised proposal would allow operators to set aside a much lower amount for the first 10 years of a reactor’s operation.
The original plan had also been for the government to assume title – or responsibility – for the waste once it had been disposed of in a new underground storage facility, which has yet to be built. This transfer – and the transfer of funds by operators to the government to cover the costs – would take place after 110 years of the reactor beginning operation, at the earliest. But EDF said this would involve too long-term an investment risk, as the returns from their waste disposal fund would have to cover the costs when it matured over a century later. The consultation instead proposed the transfer taking place once decommissioning has been completed, after around 60 years.
An energy department spokesman said: “The allegation that outcomes of the consultation have been pre-agreed with industry have no foundation. The coalition has committed that there will be no public subsidy for new nuclear.”