Friday, 29 July 2011

'Green' Investment Bank to fund nuclear power?

The Government has refused to rule out funding nuclear power through the 'Green Investment Bank' (GIB). In a response to the Environmental Audit Committee the Government said:

'Ministers will set the strategic direction of the GIB in due course. In view of the breadth of opportunities and challenges associated with greening the economy, the intention is to maintain a broad remit for the GIB. No decisions have been definitively taken as to what particular sectors might be prioritised at different times.'

With electricity giants such as E.ON and RWE having abandoned their interests in building nuclear power stations this leaves EDF struggling to put funds together to build their first power station at Hinckley C. Utilities are currently under great financial pressure at the moment to reduce risky investments (like nuclear power) and it seems likely that Centrica, EDF's partner, will decide not to take up their option of a 20 per share in nuclear investments. With private sector banks and pension funds unlikely to fund nuclear power stations, EDF's need for Government underwriting of its construction risks (or actual funds in advance of construction) is growing. In other words, nuclear power will not only need the 'same' subsidies as renewable energy, it will need a lot more! (this is on top of even the insurance and nuclear waste handling subsidies that nuclear power receives).

The total funding of the Green Investment Bank is slated as being £3 billion. This would not even fund half a nuclear power station, but, if EDF can reduce its risk, it might help it go ahead. It's just hard luck for the offshore windfarms or energy efficiency schemes etc who might hope to get the investment funds instead..........

See the Government Response on

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