Two Roads Diverged: a study of State Aid to Nuclear in France and Germany

In this online debate, we will consider the role of state aid to nuclear energy in both France and Germany together with Guillaume Dezobry (Fidal) and Max Klasse (Blomstein) with Leigh Hancher (FSR) as moderator.

Watch the debate

Contrary to this course of action, Germany has made the decision to close the country’s remaining nuclear power plants by 2022, in the name of climate action. Germany now generates over 35% of its yearly electricity consumption from wind and solar sources. However, Germany’s electricity storage capacity amounts to less than 2% of total electricity output. The intermittent nature of these sources means that back-up capacity is necessary. In order to achieve stable baseline power and fill the gaps from fluctuating wind and solar generation, Germany currently relies on coal and natural gas power plants, its remaining nuclear plants and by importing electricity from other European nations. These imports largely come from France and Sweden.

Both courses of action can be deemed imperfect, and both have required state aid. In this session, we will examine how both France and Germany have approached the issue of nuclear energy and state support.

France

In particular, in the case of France, we will address:

• The financing of existing nuclear in France

• • Is there a need for state aid?
  • What is the justification?

• Contracts for difference

• • The purpose
  • The design
  • Operating V investment aid

• Nuclear power and services of general economic interest

• • An assessment of the conditions
  • The role of Public Service Obligations

Germany

With respect to Germany, we will consider:

• The nuclear phase-out of Germany
• Financing of dismantling obligation V interim/ final storage of nuclear waste
• The repatriation of nuclear waste liabilities: compatibility criteria including the need for state intervention, appropriateness, and incentive effect
• The practical state aid implications of the design of nuclear waste liabilities beyond Germany

We will then briefly consider the issue of aid to nuclear energy more generally in the EU, including the recent non-binding opinion of AG Gerard Hogan from the ECJ on state aid to the nuclear power plant in the UK, Hinkley Point C, following Austria’s appeal against it’s compatibility. For more on this, you can check out our new podcast on the issue with Leigh Hancher, available here. Do you agree with Hogan’s opinion? More generally, do you think that nuclear energy is a good way, or the most feasible way, to reach a low carbon future? Do you think that state aid should be provided to this sector? Is state aid to nuclear energy compatible with the wider interests of EU Member States? Do you think the coronavirus crisis have an impact on the future role of nuclear energy in the EU?

We would love to hear your thoughts and hope that you will join us for a lively discussion.