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EDF is not asking taxpayer to subsidise nuclear

Guardian Environment 15th June 2010

We've been open. We expect to pay the full costs of decommissioning power stations

Your article on the costs associated with nuclear reactors addresses a fundamental question about how we de-carbonise our energy supply, and who pays (Nuclear waste offer 'has hidden subsidy', 3 June). But the suggestion that EDF Energy was engaged in "behind-the scenes lobbying" to gain a "hidden subsidy" is wrong.

We were responding to an open pre-consultation by government. This invited views from all parties, including ourselves and NGOs, on the price for radioactive waste disposal. We work hard to be part of the debate and recently set out our commitment to transparency. We have always been open that we expect to pay the full costs of decommissioning and our full share of the waste management and disposal costs from our new-build programme.

You report that there will be "further scrutiny on the government's promise that there will be no subsidy for nuclear power". But we have not asked for subsidy for new nuclear in the UK. We believe it can be delivered without subsidy, in line with the coalition government agreement. However, no electricity generator – of nuclear, wind or other source – can invest without a robust policy framework.

As your article suggests, central to this is the mechanism to make sure nuclear liabilities from new-build will be met. We need to avoid past mistakes and put in place a funding mechanism to make sure enough money is set aside by the operator during the generating lifetime of the plant to cover liabilities.

These funds should be ringfenced so they can be used only for this purpose and so the taxpayer is protected from picking up the bill. This way, there will be funds available to cover the liabilities when ownership of the waste passes to government, which we believe should happen after decommissioning.

The financial and legal arrangements to achieve this are complex, and will need ongoing dialogue between government, industry, NGOs and others. One important element is the government's proposal to set a fixed price for waste disposal. This would carry a premium to protect taxpayers against the risk that future costs could be higher than anticipated. We agree with these principles.

You report that "last year the government proposed charging a very high fixed unit price for waste disposal". In our submission we argued that the fixed price can be set more accurately once these disposal plans are more developed. Britain's waste disposal strategy, like others globally, is via a geological repository. The government is working on the location, design and cost of this.

As you report, "the consultation is continuing". We recognise the need for ongoing debate. Last week we launched our sustainability commitments, one of the largest such initiatives from any UK company. These include measurable pledges on how we will responsibly deliver low-carbon nuclear power.

Foremost is a commitment to be open and transparent in our nuclear business, and to demonstrate that we can be trusted. We expect the government and the public to hold us to these promises.

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