Mr Huhne is reported to have said that he thought the industry had converged on the view “that the carbon price floor will be enough” to make new nuclear plans viable economically. Setting a carbon price floor would essentially make cheaper but higher polluting energy (i.e. that made from coal and gas) more expensive, thus making expensive but cleaner nuclear energy more competitive. The current price of a tonne of carbon allowances is around €13, whereas nuclear competitor EDF, the French state controlled giant, believes that carbon price floor of around €50 per tonne would be sufficient to make nuclear energy competitive. Mr Huhne appears to agree with EDF, thus allowing him to keep to coalition policy of promoting new nuclear power stations as long as they do not require public subsidy. Setting a floor price for carbon would not be a hidden subsidy to nuclear energy alone as it would also make expensive renewable energy technologies more competitive. Of course, the end result is that we all end up having to pay more for our energy... (and we should not forget that it was carbon-trading schemes like this which were one of the largest contributing factors towards the closure of Anglesey Aluminium by making its operation economically unviable inside the EU).
Personally I find Horizon's stance a little surprising as a "consumer-funded levy" is essentially a subsidy by another name -- whereas it has long been known that the long-standing policy position of both the Labour and Conservative parties on new nuclear builds has been to reject the need for any further subsidies to the nuclear industry. Therefore to be fair to Huhne he simply appears to be adhering to this long standing cross-party stance and official coalition policy. As far as I can see, the fuss seems to be more related to competition between German-owned Horizon and French-owned EDF. EDF currently owns a fleet of eight UK nuclear power stations and the setting of a carbon price floor would boost the profitability of these existing stations whilst at the same time making new nuclear builds, such as Horizon plans at Wylfa, less profitable in comparison because of the estimated approx £7bn construction costs.
Anyway, this all goes to show that Wylfa B is by no means a certainty yet.
UPDATE: I thank learned commentators for alerting me to it, but its seems that the German government has announced plans to impose a tax on nuclear fuel rods from 2011 onwards which will have a large impact on German nuclear utility firms, such as E.On and RWE npower. According to reports by the Wall Street Journal, this could see E.On's after tax profits reduced by up to €1bn every year for the next six years. Chris Huhne's remarks therefore represent a substantial double-whammy to Horizon's owners, E.On and RWE npower and again show just how incredibly precarious the proposed £7bn investment in Wylfa B actually is.
UPDATE 2: Interestingly it appears that the Council has arranged an open seminar with Horizon and Centrica on Friday this week for Anglesey businesses to learn how they could benefit from the Energy Island project. From the Council website:
"On Friday September 24th 2010, Horizon Nuclear Power and Centrica Energy Renewable Investment Ltd will outline potential supply chain opportunities relating to the proposed new nuclear build programme and offshore wind power development.
This special event - to be held at Cartio Môn, Bodedern, between 8.30am and 1.00pm - will conclude Anglesey's first ever Business Week. (At junction 4, off the A55).
Energy Island Programme Director, Sasha Wynn Davies, explained, "Friday's event will give businesses a unique opportunity to actively engage with both companies as well as gain a greater understanding of the business opportunities associated with the Energy Island programme."
"The event will also be used to raise awareness of existing Nuclear / Decommissioning supply chain opportunities and the proposed off shore wind Centrica development. Local businesses and companies present will have an opportunity to ask questions about these developments and the wider Energy Island Programme."
If you would like to attend the event, please contact Energy Island Programme Coordinator, Linda Wyn Jones, on (01248) 752462 or e-mail: firstname.lastname@example.org"Did anybody else know this week is Anglesey Business Week? No? Me neither...