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Except the strike price used is far above the current market rate, with no real indication that it would reach that level naturally. Describing it as a generous
by boyband6666 7y ago
Except the strike price used is far above the current market rate, with no real indication that it would reach that level naturally. Describing it as a generous subsidy might not be strictly accurate, but isn't far from the truth.
If the strike price used were the current market rate (or maybe a bit lower), that would seem reasonable to allow a company to have the required long term security knowing the bottom won't fall out from under them, but an implicit subsidy does not seem like a good strategy.
- NotPaidToPost 7y agoAs said, it was about removing risk and ensuring a return that made the investment worthwhile. That's just a direct consequence of the government policy of not financing the construction and operation with public money. The alternative was to directly spend public money, which makes the complaint about this guaranteed price being a public subsidy rather moot.
- boyband6666 7y ago... or to accept that the plans were not economically viable as they stand. I'm an economist not a nuclear physicist, but the signal the market is sending is that these plans are not what is needed. Find a way to make the electricity cheaper, or accept the demand isn't there.