British policy outcome shows that nuclear is less cost-effective than renewables

See my letter published in the Financial Times on April 28th:

The FT is right to feature a debate about whether subsidies should go to nuclear power or renewable energy. However, the article is in danger of confusing two things: first, allowing nuclear new build to get the same sort of premium price contracts for supplying electricity as may be given to renewable developers; and second, the government agreeing to “underwrite the costs” of new nuclear build. Renewable developers do not get their construction cost overruns underwritten by government.

If the nuclear industry is asking for additional layers of subsidy compared to that given to renewable developers, the nuclear industry is tacitly admitting it is less cost-effective than renewables. The danger is that nuclear developers may be offered unlimited subsidies to cover any construction cost overruns and that this will be hidden in “commercially confidential” contracts given to them. This would amount to the government giving nuclear constructors a blank cheque on electricity consumers’ behalf. What we must demand now is that such moves be made public rather than, as in previous funding streams for nuclear power, hidden from us until it is too late to complain.

FT 28th April 2012

http://www.ft.com/cms/s/0/04d8b5a6-8e00-11e1-b9ae-00144feab49a.html