The Spanish Nuclear Industry Forum demands a reduction of the tax burden on nuclear powerFebruary 11, 2021
- Nuclear power leads electric production in Spain after contributing to over 22% of the electricity in 2020.
- The Spanish nuclear industry, via Foro Nuclear, places value on the essential role of nuclear power both in the stable supply it provides and the CO2 emissions-free electricity it generates. It also considers necessary a revision of the tax burden.
Nuclear power is and will continue to be a fundamental player in the limitation of greenhouse effect emissions and the guarantee and stability of electric supply in Spain. However, says the President of Foro Nuclear Ignacio Araluce, “for the past few years, and in spite of its excellent operation, the financial result of the nuclear fleet has been reduced to the point where some years it has operated with losses, mainly due to the excessive tax burden it endures.”
Because of the pandemic, in 2020 there was a strong depreciation in the average price of electricity in the wholesale market. At the same time, there was an increase in the tax burden applied to electric production from nuclear sources, with a new tax in Catalonia and the extension to all nuclear power plants of the tax that finances the response service provided by State security forces.
Nuclear power is a fundamental player in the guarantee and stability of electric supply in Spain
Along with this, and pertaining to the March 2019 agreement with the national radioactive waste management company (Enresa), the flat unit rate of the patrimonial benefits to finance Enresa (provided by the proprietary companies of nuclear power plants) has been increased by 19.2% —from 6.69 Euros/MWh to 7.98 Euros/MWh— for the management of irradiated fuel and other radioactive waste products, as well as for the future decommissioning of nuclear power plants.
Negative operating cash flow
The concurrence of low market prices and the elevated tax burden, explains Ignacio Araluce, means that “for the first time, the nuclear fleet operates with a negative operating cash flow, because market prices failed to cover its operative costs, taxes and levies.”
This situation, which in 2020 was circumstantial, is alarming. It could be an advance of what might happen in the coming years with the installation of a large quantity of renewable capacity. A recent example was the result of the auction of renewables on January 2021, where the average price was below 25 Euros/MWh when the level of taxes and duties on nuclear power is around 21 Euros/MWh. The sum of taxes and levies on nuclear electric generation amounted to 61% of the market revenues in 2020. For this reason, a reduction of the tax burden on nuclear power is necessary.
A reduction of the tax burden on nuclear power is necessary
Data from nuclear power in 2020
In 2020, for the tenth consecutive year, nuclear power was the technology with the highest net production (55,762 GWh) in the Spanish electric system —with 22.18% of the total. This was achieved with a net installed power of 7,117 MW —6.49% of the system’s total.
Nuclear was also the technology that operated the highest amount of hours last year: on average, 90% of the total hours of the year. Nuclear power avoided the highest amount of polluting emissions to the atmosphere: nearly 20 million tons of CO2. Nuclear electric production contributed to 33% of the emissions-free electricity last year.
Nuclear power avoided the highest amount of polluting emissions to the atmosphere in Spain
In conclusion, for Ignacio Araluce this decade-long leadership and the positive operative data from nuclear power plants year after year reinforce “the essential role of nuclear power in the energy transition as a constant, reliable and stable source of energy; it is also free of polluting gases and particles. For this reason, we need a revision of the taxes and levies on nuclear generation, some of which overlap, in order to assure that the requirements of the Integrated Energy and Climate Programme are sustainable.”