Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

U.K.’s Liberal Democrats Urge Windfall Tax on Nuclear Plants

Sept. 20 (Bloomberg) -- The U.K. should introduce a windfall tax on existing nuclear power stations to claw back additional profits, the Liberal Democrat party said.

The party, the junior partner in David Cameron’s coalition government, passed a motion today at its annual conference in Birmingham, central England, calling for the money raised to be used to help Britain’s 5 million “fuel-poor” households.

Electricite de France SA, Britain’s largest generator with eight nuclear plants, may earn as much as 154 million pounds ($242 million) of “extra profit” as a result of a tax on carbon-dioxide emissions from 2013, Citigroup Inc. said March 25. The Treasury imposed the tax of 4.94 pounds per metric ton of emissions from fossil-fueled power stations in its budget this year. That’s had the effect of raising the price EDF can get for all the power it produces.

The so-called carbon price floor “is a great, great plan but it has one flaw, not only does it help emerging renewables, what it also does is give a lift up to old nuclear,” Liberal Democrat lawmaker Robin Teverson told delegates. “It’s wrong, it’s immoral, it’s not ethical” to use additional charges on household bills “to give new profits to old nuclear for no extra effort.”

The motion, which is not binding on Energy Secretary Chris Huhne, a Liberal Democrat, calls on the government to “introduce a windfall tax on operators of existing nuclear power stations, recovering through taxation the profits they make solely as a result of the introduction of the carbon price floor from April 2013.”

‘Crucial price’

“When it takes effect, the carbon floor will reward operation of and investment in all low carbon options,” Sue Fletcher, an EDF spokeswoman based in East Kilbride, Scotland said by e-mail. That includes renewable energy, efficient gas-fed power stations and nuclear, she said. “Getting the carbon price right is crucial for achieving the low carbon energy generation that the Government wants.”

EDF has plans to build four new reactors in Britain with its first at Hinkley Point in southwest England coming online by 2018. Other companies considering building nuclear power stations in the U.K. include RWE AG and EON AG, as well as Iberdrola SA and Scottish & Southern Energy Plc. Britain can currently get about 20 percent of its power from its 10 nuclear stations, five of which are due to shut over the next decade.

The Liberal Democrats’ motion says “the proceeds of the tax should ‘‘be used to help consumers, especially those in low-income households, adapt to higher energy prices, for example through investments in improving energy efficiency.’’

Britain’s third-biggest political party opposed nuclear power in its manifesto for last year’s election, after which it entered government with the Conservatives. The two parties agreed that Liberal Democrat lawmakers could abstain on votes on nuclear energy while the government worked to encourage it. In office, Huhne has supported efforts to build new atomic stations.

To contact the reporters on this story: Thomas Penny in Birmingham at tpenny@bloomberg.net; Catherine Airlie in London at cairlie@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net; Will Kennedy at wkennedy3@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.