Lot's happening with nuclear around the world -- mostly associated with continued problems with market-competitive delivery, seeking alms from taxpayers, and attempts by taxpayer groups and trading partners to block the largest of the subsidies.
More evidence that nuclear power isn't competitive in the marketplace is coming out of the just-announced deal for Britain's first new nuclear reactors since 1995 -- to be developed at Hinkley Point C, Somerset. The deal also provides a fairly striking example of just how badly government officials and politicians want to pretend that they didn't really have to provide massive subsidies to make the project happen. Keep a straight face, and maybe nobody will notice...
This report provides an overview of energy subsidies in the UK, starting with an overview of the basic economics, then identifying the scale of subsidies in the UK, and finally comparing the UK position with other countries.
Ideally, a thorough study on energy subsidies would track, for each branch of the energy system, total income arising through energy taxes, and net off all public payments made for infrastructure, services (including regulatory functions, system balancing etc.) as well as the direct subsidies provided through price support mechanisms.
Politicians don't like to admit that they have caved, and so try all sorts of wiggles to make it look otherwise. But let's be clear: even if you call it "Contracts for Difference" instead of "Contracts that Commit Taxpayers to Pay Prices Well Above Market for a Very Long Time" the essence of what you are doing doesn't change. The policy is a long-term above-market price floor for new reactors. Stated otherwise, the UK has jumped the shark, and, in a repeat of its
1) Poker, North Dakota style. Using a logic that only an industry trade association could understand, the US state of North Dakota has announced plans to close $50m/year in loopholes to oil and gas. Great! End subsidies that make no sense, such as lower taxes on low production "stripper" wells that have been exploited by nearby activities producing at much higher rates. But no reform is free, so the state officials are offering reduced tax rates on oil and gas in return. The rub: the reductions will cost the state an estimated
BP acknowledges that it lobbied for early release of Lockerbie bomber Abdel Basset al-Megrahi in 2007, in order to boost the chances of an oil deal it had going with Libya.