Tuesday, 15 May 2012

And then there were none......

EDF abandons nuclear plans in all but name

The last surviving British nuclear construction consortium, led by EDF, has all but thrown in the towel. EDF announced that is has 'postponed' ground preparation works at Hinkley C that were otherwise due to begin in August. EDF say they will now begin the work in 2013 instead. This is reported by Damian Carrington in The Guardian online at http://www.guardian.co.uk/environment/2012/may/14/hinkley-nuclear-power-station-delay?intcmp=122.

This casts doubt on the assumption that EDF had fully committed £100 million to this ground clearing work. What is absolutely certain is that EDF's supposed partners in the project, Centrica (with a 20 per cent stake in Hinkley C and its putative sister project at Sizewell C)  have all but pulled out from the venture themselves. Sam Laidlaw, the CEO of Centrica declared last week that: "The investment case for nuclear power has yet to be proven," See http://www.telegraph.co.uk/finance/newsbysector/energy/9261237/Centrica-shareholders-revolt-against-executive-pay.html. Construction costs for the EPR reactors at Flamanville and Okiluoto have risen to ever more horrifying heights making it ever more unlikely that British nuclear power plans could be fundable under the Government's 'contracts for difference' scheme under the 'Electricity Market Reform' package. 

If nuclear power is now more expensive than offshore windfarms, the last remaining argument for preferring nuclear (on grounds of cost) flies out of the window, at least as far as British public opinion is concerned. Contrary to what nuclear advocates argue, there is no danger at all of the' lights going out' without nuclear power. The Government's own security of supply report attests to that. There is plenty of generation capacity available. What we do need to do is to substitute for imports of natural gas, and that can be achieved much more quickly, cheaply and cleanly with renewable energy energy sources rather than nuclear power. There is no shortage of renewable energy projects waiting for funding.

The nuclear industry are, of course, fielding desperate arguments that their construction costs could be 'underwritten' by the Treasury. That means that the British taxpayer/electricity consumer would be handing unlimited subsidies to the nuclear industry, a blank cheque. But it does not seem that the Treasury likes this idea, and with good reason. Not only would it create a massive bottomless black hole in British budgetary finances, but  it would be an even more flagrant breach of the Coalition promises not to subsidise nuclear power. A nuclear blank cheque would not be available to renewable energy, who will, for sure, demand to be given much better incentives than they are being offered now.

A 'blank cheque' would also run the risk of flouting EU state aid rules, although here, it has to be said (as I have been reminded by Professor Steve Thomas) that nuclear power seems to be more exempt than renewable energy from this rule. The nuclear industry gets a stream of state aid already - in the 1990s the non-fossil fuel levy was used to finish construction of Sizewell B nuclear power station (after electricity was privatised). Nuclear power's decommissioning and nuclear waste costs are funded by the Treasury, and so on. By contrast there are very strict EU protocols on how renewable energy feed-in tariffs can be disbursed.

The problem is that the Government will try to save face and pretend that the nuclear power plan is on track rather than do the obviously progressive thing and concentrate on funding energy efficiency and renewable energy instead.

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