No more subsidies for Slovak decommissioning fund ?

(Brussels, 13 June 2005) The European Commission is to launch an investigation into planned state aid to the Slovak nuclear industry, following a complaint by environmental groups led by Friends of the Earth Europe.

The new probe will be the third occasion in as many years that the EU has had to scrutinize public subsidies towards the huge costs of decommissioning nuclear power plants and managing radioactive waste. It will also be the first-ever time that a case of this kind has begun following an NGO intervention.

The enquiry, led by Competition Commissioner Mrs Neelie Kroes, will centre on a 2004 Slovak government decision effectively to increase the prices paid by ALL electricity users in the country. The scheme should have begun on 1 January 2005, but has been repeatedly delayed. If it eventually goes ahead, then the new levy would be used to fill a hole in a special nuclear
decommissioning fund, which currently contains only around 10% of estimated total ‘clean-up’ costs.

By subsidising its nuclear sector, Slovakia would further distort its energy market and so disadvantage other energy options such as renewables and energy efficiency. European law prohibits subsidies in principle. In practice, public aid must be agreed in advance by the European Commission, which in recent times is taking an increasingly tougher line against support for industries that are uncompetitive.

The case is also of interest because the company that operates the reactors, Slovenské Elektrárne (SE), is currently being privatised.
If the subsidy plan is banned or cut back, then this would also damage the financial prospects of a proposal to build two new reactors (‘Units 3 & 4 ') at Mochovce. Another privatisation sale condition is that ENEL must present Slovakia with an appraisal of future investments, including potential new nuclear units at Mochovce.

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Brussels: Mark Johnston, FOE-Europe, +32 2 542 6101
Bratislava: Barbora Cernusakova, FOE-Slovakia + 421 2 5542 2101
Bratislava: Palo Siroky, Za Matku Zem (For Mother Earth), +421 903 791 060
Rome: Laura Radiconcni, FOE-Italy, +39 06 686 8289