20 Apr 2012
Ministers are planning to subsidise nuclear power through electricity bills-despite their promises not to, a secret document seen by the Guardian reveals. The leaked document clearly lays out plans to use "contracts for difference" for nuclear power, which would allow nuclear operators to reap higher prices for their energy than fossil fuel power stations. The plans will further inflame rows over energy policy and cause a political furore for the Liberal Democrats, who fought the general election firmly opposing an expansion of nuclear power.Fiona Hall, leader of the Lib Dem group in the European parliament with a special interest in energy, said she now had no doubt that the contract for difference was a subsidy. "Industry on all sides believe this is a subsidy". She wants the UK court of auditors as well as the European commission to give a legal ruling on the issue and believes any subsidy runs against the coalition agreement. In a blog posted on the Liberal Democrat Voice website she calls on fellow party members to "speak out" against nuclear subsidies.
The issue is a key one for many Lib Dem supporters and has acquired even greater resonance since the Fukushima disaster and the withdrawal from nuclear of countries such as Germany and Italy. Green campaigners believe the Lib Dems have been persuaded into allowing higher energy bills to flow into increased profits for nuclear companies by a sleight of hand that lets ministers disguise nuclear subsidies as support for "low-carbon power".
The Guardian has also seen a presentation made by Scottish & Southern Energy to MPs last month, saying the plans contain "hidden subsidies", will be open to challenge on legal grounds, and could "mess up" funding for renewables. Hall commented: "I have not seen the SSE presentation but even the nuclear industry accepts this is a covert subsidy".
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