UK Investment Contract for Hinkley Point C New Nuclear Power Station
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The World Nuclear Association responded to the consultation exercise initiated by the European Commission in connection with its competition investigation into the proposals made by the UK Government to facilitate investment into nuclear power through its Electricity Market Reform (EMR). We emphasized the following:
- The UK’s EMR and, in particular, the Contract for Difference (CfD) intended for Hinkley Point C are an important innovation in promoting a sustainable market-oriented electricity system that embeds a
- transition to low-carbon energy in a way that is technologically neutral. They have international significance.
- The facilitation of nuclear power is a common objective of the European Union according to the Euratom Treaty.
- The CfD addresses a market failure – potential investment in low-carbon technologies is not commercially viable at prevailing energy prices, with developers unable to secure a forward power purchase agreement. As the CfD measure is available to a range of low-carbon technologies and in the context of the UK’s deregulated electricity market, there is little risk that HPC or other nuclear plant will ‘crowd out’ renewable energy sources. There will be a more ‘level playing field’.
- The CfD is an appropriate, proportionate and non-distortive measure to remedy a clear market failure in the context of a deregulated electricity market.
- Affordable, reliable, low-carbon energy from nuclear supports industry, employment and exports.
- Nuclear power has comparable advantages to renewable energy sources in terms of its potential impacts on human health and the natural environment. Soundly-based and appropriate regulation already addresses the several mistaken objections often raised against nuclear energy.
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