Is Treasury about to cave in over EDF's demand for a blank cheque for Sizewell C?

 It is looking increasingly likely that the British Government is about to cave-in to EDF's demand that the British energy consumers should pay what could be massive cost overruns for building Sizewell C nuclear power plant. But what has not been discussed so much is how the contract the Government is likely to offer EDF will reduce deployment of renewable energy schemes. 

A report in The Times signals that EDF chiefs is meeting the Chancellor to complete the details for how to dress up what is in effect a blank cheque for Sizewell C. It reported that the withdrawal of Hitachi from the Wylfa site was a 'shock'. Hitachi's move which has been expected for a year, is not a shock to people in the energy industry. It became apparent (to me at least!) long ago that new nuclear plant can only be built if they are given an effective blank cheque (that is the promise of an unlimited supply of cash) from some state-backed energy monopoly.

At the moment Hinkley C power plant is being built with the backing of the French state who will pay EDF's bills for the plant's cost overruns. But EDF has been told that the French state won't pay for another British nuclear power plant at Sizewell C. So EDF bosses are telling the Brits that they have got to have Sizewell C, and that the Government will have to promise a scheme whereby the Government will have to ensure that EDF' cost overruns are recompensed.

Of course we are treated to many press reports and consultants explaining that the costs of Sizewell C will be less than Hinkley C, but this somewhat begs the question of why it is then that EDF needs a promise that the British state will ensure payments of cost overruns. 

What, however, is less understood is that EDF will be expecting the same sort of contract as given to them for Hinkley C which allows nuclear electricity generation to crowd out production from future renewable energy plant. EDF will be given so-called 'baseload' contracts that mean that when electricity wholesale prices are low or even negative they will still get paid the same level of high premium prices. Meanwhile future wind and solar pv projects will be effectively forced offline by the nuclear power plant because they will not receive premium prices. 

This type of 'baseload' contract is another form of hidden subsidy to new nuclear power stations that raises the real price of nuclear power beyond the fictional prices quoted in government reports. Meanwhile the cost of this subsidy to nuclear power's (for generating power at a high price when the power is not needed) is borne by renewable energy, whose costs thus increase. Yet of course this hidden subsidy is entirely a creature of the biased contracts that the Government offers nuclear power. Nuclear power is given preferential contract treatment because it is called' baseload'. And yet it bears no penalty for being inflexible -that is unable to change its output to fit in which demand and supply patterns. 

Given the wealth of alternative low carbon generation options, as well as the prospect of being able to balance the electricity system better without these nuclear power plant, there is no need to build these plant given their great expense, besides any other reason. However EDF not only has immense political clout as a big multinational corporation owned by the French state, but they also have the support of a large number of civil servants - indeed there is a much larger number of civil servants dealing with nuclear power compared with renewable energy.

https://www.thetimes.co.uk/edition/business/frances-edf-demands-clarity-on-british-nuclear-power-plans-00t6gbmlg

Be careful what you wish for - why letting ex-pat Scots vote in an independence referendum might not give the result its protagonists want

 What started off as looking like a whakky idea - allowing a Scottish independence referendum on the proviso that all people who would be eligible for Scottish passports - has now become almost mainstream in England (at least in right wing political circles). Those promoting the idea are opposed to Scottish independence, expecting such a proposition to deliver a 'no' vote in any referendum outcome. But these 'give the vote to Scottish expats' should be careful of what they wish for.

Because it might actually backfire and produce more votes for independence than votes against.

Sure, the opinion polls suggest, now, that there would be a healthy majority for a 'no' vote among the English residing expat Scots, but that's before the campaign starts, and certainly before the potential 'no' voters are informed of the benefits of obtaining an extra (Scottish) nationality. 

These benefits are likely to be substantial given that Scotland is very likely (I would say almost certain) to quickly become a member of the European Economic Area (EEA) and therefore entitle Scottish citizens to the freedom of movement benefits that result from this. Travellers to the EU from the UK after the end of the year may well experience some irksome changes meaning people having to pay to take out health insurance cover, experiencing much greater difficulty in taking pets to the EU, re-imposition of mobile phone roaming charges and of course facing visa restrictions on the amount of time they can spend abroad. 

We don't know as yet what the arrangements may be, but what I can argue with some logical argument in support is that the ideal relationship that Scotland would have with the EU after independence is not full membership of the EU, but membership of the EEA. This would allow Scotland, as is the case of Norway who is a member of the EEA but not the EU, access to the European Single Market and all of its benefits. For sure, this would include access to health cover as it is for Brits at the moment easy movement for pets, no mobile phone roaming charges and no restrictions on access to EU countries. Scotland would be also able to negotiate a close trade agreement with the rest of the UK, something it would need but would not be able to negotiate separately to the EU if it was a full EU member.

Nobody has factored in the effect on ex-pat Scots when they realise they would get these benefits. Many of these potential referendum votes probably have no deep feelings about independence one way or another, but they may well be very keen on obtaining the useful benefits to themselves that might flow from independence. They might well suddenly warm to the blandishments of Nicolar Sturgean et al. In deed, in political science a famous theory propounded by Mancur Olson (about which political scientists have been arguing ever since) highlighted the crucial positive impact on recruitment to pressure groups of 'selective incentives'. Of course, as critics have pointed out, support for causes is very important, but so are perceived individual benefits.

A surprisingly large number of people could end up voting for the benefits given that everybody who has at least one grandparent born in Scotland would be eligible for Scottish citizenship. You might suddenly see a lot of people 'rediscovering' their Scottish identities for the sake of claiming holiday health insurance and fee mobile phone calls, even though some of them may never have actually set foot in Scotland.

Now, that might be upside. The downside however is that, in the event of a narrow 'no' vote result  if the number of expat Scots voting in a referendum exceeds the margin of a 'no' victory then the Scottish nationalists will say that the vote has been rigged. The referendum will be robbed of its legitimacy. Once that happened the door is opened to all sorts of odious extremists who are willing to put other people's lives in danger in terrorist attacks in the name of 'nationalism'. At best there will be a movement of civil resistance and civil disturbance in opposition to what will be framed as a rigged result. Things could get quite difficult.

Maybe some of the protagonists of this 'give expat Scots a vote' strategy are being a bit tongue in cheek, and will become a bit more straight-faced if and when Scottish enthusiasm for another vote increases. 

I hope so, because the consequences of such a crazy idea will almost certainly make these people regret coming up with the idea in the first place.