Tuesday, 8 March 2016

Should anti-nuclear supporters now call for EDF to build Hinkley C?

Strange as it may seem, there is now a plausible argument for anti-nuclear campaigners to call for Hinkley C to be built. Why? Because the financial catastrophe that would, as a result, envelope, and destroy, EDF would mean the end of prospects for new nuclear power in Europe.

EDF are now in the position whereby they can only build the plant if they finance it on their balance sheet since the Treasury (in an argument that formed a key basis of their EU state aid application) will not sanction a loan guarantee before a European EPR has been seen to work. This criterion cannot be met until 2019 at least. Even then if similar cost overruns occurred in Hinkley as they have done in France and Finland, that would sink EDF anyway, even with a loan guarantee. EDF face bankruptcy even with their escalating liabilities from their EPR construction disasters as well as increasing costs of refurbishing their existing nuclear fleet. Don't imagine for a moment that the Chinese will come to the rescue. They have no further political interest other than they have gone so far, and certainly don't want to pay for any costs overruns on the project.

Without the Treasury loan guarantee, EDF would plunge even further into losses than it already is. The money spent on plant construction would have to be set against income and its company losses would mount. It could issue more company bonds, but these would create a debt mountain, and EDF would have to pay ever-increasing interest rates to sell the bonds.  It would face increasing interest  charges on its mounting debts which would be escalating because of the increased debt it would take. Its shares, already only a fraction of what they used to be worth would become nearly worthless. The French state would have to step in and inject large sums of money whilst at the same time closing down a lot of its operations, with very high job losses. What was left, probably sold off to private interests would be out of the nuclear business.
No more French nuclear power! No more French state subsidised effort to shore up a failing industry! That in itself would be a step forward. People have often cited French nuclear power as a 'success'. Instead, if it isn't already, it certainly would then be branded as a calamity.
True, an awful lot of resources would have been wasted on Hinkley C, (which could be spent on real green energy) and who knows when it would ever start operation? If ever...even with a decision to start building it seriously! One would have to be a cynic to wish for Hinkley C to be completed now! But at least it would be a clear silver lining for anti-nuclear forces!

People observe that Francois Hollande and David Cameron have boxed themselves into a corner by continuing to back Hinkley C. But the institutions that exist  really do make it difficult for their pro-Hinkley C public relations to be turned into reality. Maybe its far easier for them to wait for the EDF leadership to fully implode rather than take what would be pretty implausible decisions to make both the British taxpayers/consumers and French taxpayers/consumers take further, gargantuan, losses on top of the largesse that has already been agreed to fund Hinkley C. Hinkley C would be quietly sidelined in the context of what would be paraded as another triumph of a new improved design for a reactor! The leaders can come up with another PR sticking plaster,eg  that a new simpler design would come forward and be the lynchpin of future French-British nuclear 'cooperation'. Of course this would be many years down the line, and probably wouldn't happen . But, if somehow EDF were to proceed with Hinkley C, there could be no future messing about with nuclear designs (pointless anyway given the poisonous regulatory environment surrounding nuclear that prevents any projects being built within normal economic criteria).
Chris Goodall, a pro-nuclear supporter, commented a few months ago that it would be best for nuclear power if Hinkley C did not go ahead.  - because the spectacle of disaster would ruin the prospects for future nuclear power. So we, nuclear opponents and sceptics, are entitled to wonder, whether, after all, if we are a little bit cynical, whether it would be best for anti-nuclear politics in the long run, if Hinkley C was now given the go-ahead. A truly ghastly show will then follow! But it would be the end of nuclear power in Europe!


  1. I do like your style. Just one little fear. In trashing Hinkley's already stuffed reputation, are you giving encouragement to UK's thorium and Small Nuclear Reactors fans in their quasi religious campaign, which they'e managed to get classed as a "charity" ?

  2. I don't think so. These ideas were abandoned decades ago simply because they worked even less well than large light water uranium reactors. The fact that they are being reintroduced as ideas today is partly to give an otherwise flagging nuclear industry something to do and mainly a reflection of the fact that nuclear power technology is only going backwards