Superstorm Sandy deals another blow to nuclear power 'reliability'

US news wires are humming with stories about the biggest nuclear shutdown since Fukushima as over 32 GWe of nuclear power was shut down during 'Superstorm Sandy'. This is another blow to what is the myth of nuclear power as a reliable energy source. As reported in an earlier blog last year, when storms were reported as leading to a wind turbine catching fire, little attention was paid to the much more serious storm-related shutdown of Hunterston B in Scotland. Indeed, British nuclear power stations are prone to unplanned outages which plunge thousands of people into darkness (for example Sizewell B in May 2008). It is ironic that wind power is cast as intermittent when in fact its output is predictable on the basis of increasingly sophisticated advance weather forecasts. But nuclear shutdowns occur instantaeneously with no warning causing massive problems for the electricity system. As posted on the earlier blog about the as-yet-far from completed Hitachi 'deal', Hitachis' preferred reactor type (Advanced Boiling Water Rectors) have a poor record for reliability, with half of them effectively being on line for less than half the time. We do not know about EDF's planned EPR power stations of course since none have actualy started operating yet.

So why are the Government planning to pay nuclear power a lot more subsidies than onshore wind under Electricity Market Reform? It certainly has nothing to do with reliability! It does not have anything to do with the Coalition agreement, either. Did the Lib Dems really agree to give nuclear power around £100 per MWh over 25 year contracts in an electricity market reform strike whilst onshore wind gets only £80 per MWh for 15 years? Isn't it strange that the nuclear industry, the Government and the engineering establishment have been telling us for so long how much cheaper that nuclear power is compared to renewables - all they need is the right 'framework' and it will be 'cheaper' for the consumer! Well it won't, and we should ring-fence the money for renewables, not nuclear!

Learn about policy options for implementing renewable energy by making amendments under the forthcoming Government Energy Bill at a Conference on January 18th at the University of Birmingham: http://www.claverton-energy.com/wp-content/uploads/2012/11/Feeding-Renewable-Policy_yc_5_10_2012.pdf

See the Superstorm Sandy report below:

http://www.pennenergy.com/articles/pennenergy/2012/11/superstorm-sandy-behind-largest-nuclear-power-outages-since-fukushima.html?cmpid=EnlDailyPowerNovember52012&hq_e=el&hq_m=16911&hq_l=6&hq_v=z8384cadbd

Superstorm Sandy behind largest nuclear power outage since Fukushima

November 2, 2012

By Dorothy Davis
Online Editor

Superstorm Sandy, which tore through the Northeast United States causing property damage and even numerous deaths, led to three nuclear reactors shutting down and several other plants to reduce operations. Reuters reported the storm caused 32,045 megawatts in nuclear power outages on October 30 - the highest amount since May 2011 when the Fukushima disaster occurred in Japan.

Three reactors experienced shutdowns during the storm. They were Indian Point 3, in Buchanan, N.Y.; Salem Unit 1, in Hancocks Bridge, N.J.; and Nine Mile Point 1, in Scriba, N.Y. Operators reported all safety systems responded as designed.
Three additional nuclear plants in Connecticut, Vermont and Pennsylvania also chose to reduce power due to the storm, Reuters reported. They resumed full power by October 31.
Although Nuclear power plants are built to withstand hurricanes and other natural disasters, safety protocol requires plants to shut down operations when faced with potentially extreme conditions. In the case of Sandy, operators took precautions against hurricane-force winds, power loss and nearby water levels exceeding flood limits.

Thursday, the U.S. Nuclear Regulatory Commission said it was beginning to return to normal inspection coverage for nuclear power plants in the Northeast.  Heightened coverage will continue at Oyster Creek, a plant in Lacey Township, N.J., still in an “Alert” status due to high water levels in its water intake structure.

Are Tories anti 'bourgeois left' or just anti-green?

John Hayes comment that he does not take any notice of 'bourgeois left wing academics' (surely not referring to people like me!) may be a superficial, amusing quip, but it obscures a deeper truth - that the Conservative Party has effectively abandoned the green agenda. Although David Cameron appeared to contain Hayes' anti windfarm comments Cameron in fact said that the issue of capping windfarm development would be reviewed when the windfarm deployment targets are met. In other words a windfarm deployment cap is still very firmly on the Tory agenda. Despite Greg Barker's attempts at greenwash pr, he has presided over a massive cut in support for energy efficiency compared to the programme established by Labour.

When you put that together with the fact that the Conservatives want to pay nuclear power developers a lot more than onshore wind developers (indeed give them a blank cheque if John Hayes could get away with it) you can see that there is very clear blue water now between the Conservatives and the other main parties on green energy. With the exception, of course, of the very anti-windfarm UKIP to which the Conservatives feel they are now heavily beholden!

Yes, Labour led the charge on a supposed nuclear rennaisance from 2006 onwards, but the point is that they never actually did anything that would be crucial to bringing it about. Now I don't want to excuse their weakness in pandering to the nuclear lobby for one minute, but their policy of not offering significant extra payments to new nuclear power did ensure that the superfically pro-nuclear policy remained as just hot air. Yet now the Conservatives, having bullied the Liberal Democrats into accepting a plan to subsidise nuclear power (in all but name), threaten to hand the nuclear industry large quantities of consumers' energy bills to fund nuclear power stations instead of renewables.

The Treasury (led by George Osborne who wants to keep the anti-windfarm lobby from snapping at his heels) are insisting on a strict cap on spending on 'low carbon' sources - called the 'levy control framework'. So any money that nuclear gets will be deducted from the amount available for renewable energy. As argued in the last blog paying nuclear around £100 per MWh is uncompetitive on economic grounds compared to not only onshore wind but also offshore wind and solar pv. Remember even if the headline 'strike prices' are much the same for solar, offshore wind and nuclear, the renewables end up being much cheaper since the nuclear constructors will be given much longer contracts, 25-30 years, compared to renewables which are slated to be given 15 year contracts. So nuclear, at a 30 year contract will cost the electricity consumer TWICE as much as for a renewable source at the same strike price on a 15 year contract. And then there are the decommissioning and nuclear waste charges being funded by the Treasury to be taken into account......

Of course onshore wind, under a feed-in tariff regime (as opposed to the more uncertain Renewables Obligation) will lead to windfarm being given only around £80 per MWh for 15 year contracts under plans being considered. What sort of competition is that when nuclear power gets around £100 a MWh for 25-30 year contracts? In fact the public would much more prefer to pay onshore wind £100 per MWh (and we'd get a lot more windfarms at the higher price) than pay near that level to nuclear power!

But then the Tories are out of step with public opinion. If they listened to public opinion then nuclear would get less of a subsidy than onshore wind power, not more! (preferably none of course). As I have said, the Tories have lost possession of any significant part of the green agenda to Labour, Lib Dems, and of course the Green Party. Note that the Green Party is the only one that is unambiguously pro-wind and solar and anti-nuclear.

And yet the Lib Dems have to get Ed Davey to work harder to retrieve their claim to have a handle on the green agenda themselves. An important start in that process would be to make sure that nuclear do not get offered a higher 'strike price' than onshore wind!

And, a last comment on this post, nuclear power is hardly a 'working class' fuel compared to onshore wind power since the poor people are going to have to pay rather higher bills to support nuclear than onshore wind - according to government plans! So who has 'bourgeois' interests in mind? John Hayes, I am sure.

Government nuclear subsidy plan will breach EU state aid rules

The Government, with their proposals for a 'levy control framework' cap on spending on 'low carbon' electricity sources, are heading for a breach of EU state aid rules. This is because the Treasury are likely to reserve a specific fund to pay subsidies to nuclear power rather than make it available to 'low carbon' sources in general. Otherwise they cannot possibly justify paying more money to nuclear power developers than will be paid to onshore wind developers.

The Treasury appear to be claiming that it is handing out subsidies, through the 'contract for difference' (CfD) framework being set up by the forthcoming Energy Bill, on a 'competitive' basis that is available to all low carbon sources. But if that is the case, then why are the Government proposing to give a higher strike price to nuclear power than onshore wind? Onshore wind is tipped to get no more than around £80 per MWh. The strike price being mooted in Government circles for nuclear power (close to £100 per MWh) is the same sort of level as the government is proposing to pay for large scale solar pv and offshore wind. Moreover nuclear power developers will get this stream of money for a much longer period (25 or 30 years) than renewable developers that, it seems, will be limited to 15 year contracts. So there will be no consumer savings if nuclear power is substituted for renewables. Quite the contrary. In fact the consumer will be out of pocket if nuclear is funded rather than renewables.

The nuclear subsidy scheme has been sold to consumers on the basis that it is a cheaper way of achieving low  carbon objectives compared to renewable energy. Yet that is palpably not the case,  if, as seems now very likely, nuclear power is given more subsidies than onshore wind. In addition, public opinion surveys report renewable energy as being much more popular than nuclear power. So, with the proposed nuclear subsidy scheme, the consumer will simultaneously get both short-changed and given an energy source it least prefers.

The only way that the Government can, and it seems will, avoid this logic (of giving nuclear no more subsidies than are given to onshore wind) is by 'ring fencing' a pot of money under the 'levy control framework' to spend on nuclear. Then it will be privileging spending on nuclear rather than renewables. Yet, if it does this then it is also going to be in breach of its own pitch to the European Union, and also what it has told the British public, that the 'low carbon subsidies' are equally available to all energy sources. They clearly are not going to be available to all low carbon sources. A specific chunk is being reserved to pay nuclear power. A bundle of money has, in effect, been labelled 'to be given to EDF'. EU rules allow an exemption to its 'no state aid' rules when it comes to renewable energy. There is certainly no exemption that allows giving state handouts that are, in effect specifically labelled for EDF!

Nuclear strike price to be higher than wind? - While wind development is 'capped'.

The Government seems poised to announce a policy that will see nuclear power paid more than onshore wind. In the process onshore wind development will be capped. Consumers will be big time losers as the Government prepars to give nuclear power a higher 'strike price' per MWh for electricity generated compared to the strike price to be paid to onshore wind. They will end up paying around double the subsidy for a given amount of onshore wind compared to nuclear power. It looks like a pretty clear way of signalling that nuclear power is to be given a big advantage over wind power.

There is a lot of speculation about what the Government will set as the 'strike price' for nuclear power, not to mention whether it will be high enough to bring forward nuclear projects without a government 'blank cheque' (underwriting). However, one paradox seems to be going unnoticed. All the bets on the figure for nuclear seem to be higher than anything onshore wind is likely to receive.

Various people have mentioned £100 per MWh as the likely strike price for nuclear power. It is being described as a cap!(?) So what sort of a 'cap' is this if nuclear gets paid 25 per cent more than wind for the same output? Under a feed-in-tariff regime the figure paid to onshore wind is likely to be no higher than around £80 per MWh. Is the Government really going to make it so plain that onshore wind is cheaper than nuclear power? Even £100 per MWh is unlikely to be enough to lead to nuclear power plant being built - although we will see quite a few windfarms at £80 per MWh.

The Government seem poised to make the contrast even starker by 'capping' onshore wind development in some sort of deal with George Osborne - to placate anti-windfarm Tories. So suggests Business Green http://www.businessgreen.com/bg/news/2219518/is-the-chancellor-preparing-to-cap-new-onshore-wind-farms

Consumers will, with nuclear compared to onshore wind, have to pay an excess of £50 per MWh (over and above a wholesale electricity price of £50 per MWh) compared to only £30 with onshore wind - and to cap that as well nuclear power will have a much longer contract period - 25-30 years compared to maybe only 15 years for onshore wind. Altogether consumers will end up paying around 100 per cent extra to subsidise nuclear power compared to getting the same amount of energy from wind power.

Besides making consumers pay bigtime to satisfy Tory anti-windfarm MPs, this smacks of giant political bias in favour of nuclear rather than wind power. All overseen by a Liberal Democrat Energy Secretary! If onshore wind was paid £100 per MWh we could have a lot more onshore windfarms - but the Government clearly prefers to have nuclear if it can. How can the Government justify such a policy? Certainly not according to public opinion which sees wind as being preferable to nuclear power. But Government policy will have this exactly the other way around - with a twist of the wind 'capping' knife thrown in.

And we have claims that Hitachi's reactors are 'reliable' - even though half of the Advanced Boiling Water reactors in operation work for less than half the time! At least you can predict windspeeds in advance with some accuracy, which is more than you can say for nuclear power stations which suddenly go offline.

Learn about policy options for implementing renewable energy by making amendments under the forthcoming Government Energy Bill at a Conference on January 18th at the University of Birmingham: http://www.claverton-energy.com/wp-content/uploads/2012/11/Feeding-Renewable-Policy_yc_5_10_2012.pdf

See my letter in the Guardian which also puts forward these sentiments at: http://www.guardian.co.uk/environment/2012/nov/02/the-beauty-of-wind-farms

Also, see letter published in the Daily Telegraph signed by me and a number of leading academics (and Jonathan Porritt): http://www.telegraph.co.uk/comment/letters/9662333/Barack-Obamas-potential-for-action-beyond-the-shores-of-America.html

Hitachi bid - more fantasy nuclear power?

The latest supposed breakthrough for the UK nuclear new build programme came with the announcement  that the Japanese nuclear constructors Hitachi had won a contest (with one other Japanese company, Toshiba, according to the FT) to build reactors abandoned by the former 'Horizon' consortium. But, as usual in the nuclear garden, all may very well be not quite what it seems from the press releases.

A new nuclear myth is busily being constructed by commentators that the only reason we have a blip in the nuclear power programme is that the German Government got the wobblies about nuclear power forcing E.ON and RWE out of the picture (nothing to do with nuclear power being far too expensive for the incentives likely to be offered, of course). But now others have rushed in to fill the gap. This new reactor programme, based on the Advanced Boiling Water Reactor (ABWR) is going to be cheap, quick to build and is all but a done deal.

Now pause for a moment, since, over the years, we have been subject to so much fantasy from the nuclear industry about their plans, costs etc, why should we suddenly believe everything stated in their press releases now?

The Advanced Boiling Water design has, let us say, a chequered history in terms of reliability. None of the four operational plants can so far, according to the World Nuclear Association (WNA) database (accessed 30/10/2012), boast a capacity factor of more than 73 per cent, and two of them have capacity factors less than 45 per cent (see WNA links below) - some wind power plant have capacity factors around this level, and they are supposed to be that way! A capacity factor is the amount a plant generates compared to the amount that would be generated if it was operating at full power all of the time. Nuclear power plans are costed on the basis that they will achieve capacity factors of 80-90 per cent. With a capacity factor of 45 per cent (plausible outcome based on experience) any nuclear power project comes out needing twice the power price to be an economic proposition!

 These ABWRs do not seem to be very cheap to build either. Currently three are under construction (according to 'wikipedia'); two in Japan, and one in China. The plant being built in China has been under construction since 1997, admittedly delayed by political controversy at times, but still an eye-wateringly long period. The reactor cost seems high even though interest charges will not, I guess, have been factored in, which will be a real killer for any nuclear project that has to be financed through the UK's proposed low carbon mechanism. So far no ABWR projects are being built in the west, with the reactor for one project initially planned in South Texas being cancelled last year. The costs had spiralled to a reported $14 billion for 1358 MW (wikipedia), a cost that compares broadly speaking, MW for MW, with the costs quoted for building Hinkley C.

It is strange. I have not seen any of this reality about high reported construction costs, experience of delay, and uninspiring capacity factors appear in the press coverage so far. But these facts, as opposed to the press release fantasy, mean that discussions of what 'strike' price the UK Government might offer to achieve standard commercial rates of return seem irrelevant. The figures just go off the chart. Only government underwriting with a very blank cheque seems likely to ensure that these projects go ahead........and somehow getting the project passed EU state-aid rules, which is another perhaps not-so-minor issue.

Again the question arises, why not instead invest in renewables and energy efficviency which have much more certain outcomes and cheaper costs? See previous blogs on this one.

 Hitachi/GE are busy announcing deals with engineering companies for various things to do with the project and one receives the impression from the press handouts that the potential 6.6 GW worth of developments at Wylfa and Oldbury are almost built subject to a bit of paper chasing about approval of reactor designs.

But one teensy weensy little detail remains to be settled about the promised nuclear power stations. Who will pay for them? Hitachi? Well, Hitachi are nuclear constructors - they contract to build plant for  other people. They did agree to take out a 20 per cent equity investment in a nuclear power plant in Lithuania (which the Lithuanians have just rejected in a referendum), but it seems unlikely they would take on 100 per cent of the equity never mind 100 per cent of the financing in total. Indeed, because the bulk of the Lithuanian proposal was financed by a state-guaranteed loan, Hitachi's contribution to the projected cost in fact comes out as rather less than 10 per cent. And according to the UK Government there will be no underwriting of construction costs, unless you catch energy ministers in a wavering moment (see previous blog). So the banks would not lend any money. Hitachi would have exactly the same problem as is faced by EDF or, for that matter, any other large company. They would have to finance the lot off their balance sheets.Their shareholders would face big risks and expect big returns, which pushes the required price to be paid for the nuclear electricity higher still.

Hitachi themselves are not in a position to derive income from the electricity generation - they need contracts with big electricity suppliers. This implies investment from electricity suppliers. So who are these other people who will invest in the power plant? - by 'people' I mean electricity companies with a big stake in UK electricity markets. In China and Japan, of course, the power plant are built for electricity utilities who are are monopoly retailers. This means that they can pass on any costs to their consumers. This cannot, as explained earlier, be done under the UK's liberalised electricity market arrangements -even if Hitachi did interest electricity majors to invest in their project. And the UK Government are unlikely, short of the blank cheque option, to offer a high enough strike price to make nuclear power stations commercially viable under the 'low carbon mechanism' projected as part of the Government's Electricity Market Reform package (coming soon to Parliament, on November 19th I am told).

One might ask why Hitachi/GE are buying up the option. The Financial Times suggests that the loss of business in Japan is impelling the company to take up 'risky' options.
See http://www.ft.com/cms/s/0/174ae282-227e-11e2-b606-00144feabdc0.html#axzz2AoAttZBC

It does sound like desperation. The FT quotes an international lawyer specialising in nuclear power as commenting that 'What they're really buying here is an option to build reactors, without all the fundamentals in place'. The fundamentals seem unlikely to be in place to deliver Hitachi or anybody else the sort of returns that can give a commercial justification for nuclear power in the UK. So the project looks unlikely.

Nevertheless the UK Government and nuclear proponents are keen to collaborate in all of this to keep up the myth that nuclear-is-cheap-reliable-and-coming-soon, so the fantasy continues........Everyone is a winner, except perhaps the Lithuanians who could be left with a misleading impression about what is really happening in the UK.

Learn about policy options for implementing renewable energy by making amendments under the forthcoming Government Energy Bill at a Conference on January 18th at the University of Birmingham: http://www.claverton-energy.com/wp-content/uploads/2012/11/Feeding-Renewable-Policy_yc_5_10_2012.pdf

You can study some links here for details about the performance and background of Advanced Boiling Water reactors:

http://en.wikipedia.org/wiki/Advanced_boiling_water_reactor#Reliability

http://world-nuclear.org/NuclearDatabase/reactordetails.aspx?id=27570&rid=F98DE7C7-0F7F-467C-B98C-8E633BBD50D5 44.6

http://world-nuclear.org/NuclearDatabase/reactordetails.aspx?id=27570&rid=BF928D6F-9277-4E05-BF0F-2658DC973FEA 72.8

http://world-nuclear.org/NuclearDatabase/reactordetails.aspx?id=27570&rid=15DA1AEF-B63E-4EBA-827B-7280559C93B1  68.2

http://world-nuclear.org/NuclearDatabase/reactordetails.aspx?id=27570&rid=A14A17FA-9566-494A-8975-2B6D5F8D41E8      44

world nuclear database http://world-nuclear.org/NuclearDatabase/Default.aspx?id=27232

For details of the Lithuanian deal involving Hitachi, see http://www.osw.waw.pl/en/publikacje/osw-commentary/2012-07-26/visaginas-nuclear-power-plant-still-highrisk-investment

Secrecy and lies likely as Government considers 'blank cheque' for nuclear

The Government, via Energy Minister John Hayes, is considering a major u-turn in nuclear power policy as it considers giving a blank cheque to nuclear constructors. This is what is involved in 'underwriting' the risks faced by nuclear constructors, and it will almost inevitably lead to secrecy and lies about what consumers will pay for building Hinkley C. It means that the Government will guarantee to pay for overruns in construction costs incurred by EDF in building Hinkley C.  Such options were specifically ruled out, not only by the Conservative Party immediately prior to the 2010 General Election, but also by Ed Davey (Secretary of State at DECC) himself in May. 

A commitment to 'underwrite' nuclear power costs would almost inevitably mean either the Government keeping secret the details of how much it might cost the consumer to pay for pay for Hinkley C, or providing misleading statements that would amount to a lie. In the process nuclear power would be given immensely better incentives than renewable energy projects, who would receive no underwriting of costs and whose (transparent) payments would be wrongly held up as costing more than 'cheap' nuclear.  I will explain all of this. First the details of the u-turn. 

The Daily Telegraph reports, on October 6th, that:  'The Government is considering ways of underwriting risk in the construction of new UK nuclear plants, the energy minister John Hayes has said.' See 

http://www.telegraph.co.uk/finance/newsbysector/energy/9591653/Government-mulls-underwriting-risk-of-new-nuclear-plants.html

Underwriting nuclear risks would be in direct contradiction to what the Conservative Party said in their pre-election energy policy statement in March 2010, called 'Rebuilding Security – Conservative Energy Policy in an Uncertain World'. The Conservatives said:  ‘we agree with the nuclear industry that taxpayer and consumer subsidies should not and will not be provided – in particular there must be no public underwriting of construction cost overruns’. Note the statement: 'in particular there must be no public underwriting of construction cost overruns'. Whatever the interpretation off the term 'subsidy', there is not much wriggle-room there! Mr Hayes,  which part of the phrase 'there will be no public underwriting of construction cost overruns' don't you understand? See the page 18 of the pdf document at: http://www.conservatives.com/News/News_stories/2010/03/Conservatives_propose_radical_overhaul_of_Britains_energy_policy.aspx - if this (now) embarrassing document is still on the web by the time you get to it!

But it gets worse for the Government's record. Ed Davey, in a moment of clarity, declared on May 22nd this year, just as the Energy Bill was published, that: "There will be no blank cheque for nuclear - unless they are price competitive, nuclear projects will not go ahead." See http://www.bbc.co.uk/news/business-18144412.  I was on BBC Radio 4 that morning and  commented that there would be no new nuclear built unless there was a blank cheque issued for them, and then Ed says, 'no blank cheque' - I thought well, 'no nuclear then'. But what a silly fool I am for believing what the Secretary of State says - or at least not understanding that at the end of the day he would have to do as he is told by Sir William McAlpine, Berhard Ingham and their 'Sir Humphrey' civil service friends in Whitehall.

Of course if nuclear costs are underwritten they are hardly 'competitive' since there is no competition! Jeremy Leggett's Solar Century will not be be told by the Government that however much their projects will cost, the electricity consumers will foot the bill. It is as if the nuclear developers are acting like a nationalised industry, except that they (EDF and whoever else they attract into this honeypot) get to take home the profits at the end of it. If you thought the way railway franchises are issued is bad, take a look at the concept of 'underwriting' nuclear costs. At least the Government do not guarantee to pay the costs of building the trains! Of course the droves of solar power companies who are going bust are not getting their costs underwritten. As things stand at the moment, independent wind power developers will not even be able to get decent power purchase contracts, and they definitely will not get their costs underwritten! Hard luck Fred Olsen Renewables, Ecotricity, Renewable Energy Systems, and so on. 

So how would a policy of 'underwriting' nuclear construction costs fit in with with the Energy Bill? Well, it would go something like this. The Government would announce that a special 'investment' instrument would be issued to EDF for Hinkley C, the terms of which are 'commercially confidential'. After some searching questions the Government would most likely come out with some statement that the (commercially confidential) estimates suggest a nuclear 'strike price' of £70 per MWh, conveniently, just under what the Government will pay to onshore windfarms organised by the major electricity suppliers. In fact though it will turn out, years later that, well shucks, you would never have guessed, the estimates were underestimates and that the consumer will just have to shell out over £100 per MWh. 

Of course the consumers should count themselves lucky here because if EDF did not have their costs underwritten, and had a level financial playing field with renewables, then the cost would be more like the £165 per MWh, of which we have heard previous mention. That is because they would have to raise money off the markets, just like renewable energy developers. Except that the renewable projects would cost the consumer a lot less than the nuclear projects in £s per MWh. It is called competition, but this means that nuclear will lose out to renewables, and that cannot possibly be allowed. Instead we will have that euphemism 'underwriting' which stands for 'blank cheque'.

But, to get back to the point, when the Government 'underwrites' the cost of nuclear power plant,  the Government would end up implying a price to be paid by electricity consumers  that would be much lower than the electricity consumers ultimately ended up paying.  It is called lying. You think I'm the one fibbing? Well, just look at what has happened in the past....Magnox, Advanced Gas Cooled reactors, Sizewell B.........Lies, lies, lies...........The beauty of it is, by the time the power stations actually get built, the ministers involved are long gone.

But do not worry, the Renewable Energy Foundation (the ones who do not like windfarms) will still be able to criticise the financing of windfarms because the information about this is transparent and truthful, and this is their democratic right. This is a stark contrast with nuclear power of course. Because if the Government told the truth about nuclear power, consumers would never, ever, allow it to be built in the first place.

British nuclear supporters issue surrender notice

Supporters of British nuclear power have effectively surrendered in their efforts to secure a new programme of building nuclear power stations. Sir William McAlpine, a member of the McAlpine family which founded the major construction company of that name, has written to the British Chancellor, George Osborne, to ask that Government proposals to subsidise nuclear power should, in effect, be abandoned. He has written as the Chair of the 'Supporters of Nuclear Energy' (SONE) group, which provides much of the lobbying inspiration for nuclear power in the UK. This is also a very significant move since the McAlpine group are among the companies who are most likely to benefit from contracts given to build new nuclear power stations.

The Daily Telegraph says that:
'Sir Williams tells the Chancellor that neither the consumer nor businesses “should have to pay through the nose” for a subsidy system “which seems to have very little justification.” '

This is in reference to what is reported to be EDF's demands for a high 'strike price' that would be well above £100 per MWh (as reported previously in this blog). It seems SONE are advocating direct financing the construction of the nuclear power stations by Government. Direct financial support from Government, involving also, as this logically means, the 'underwriting of construction costs' is not going to happen outside of re-nationalisation of at least a part of the electricity industry. This is very, very, unlikely. Hence nuclear industry supporters are, in effect, running up the white flag in the struggle to get a new fleet of nuclear power stations built. This looks like an attempt to organise a dignified withdrawal in the face of overwhelming odds. However, really, the effect is surrender under cover of an attempt to save face.

The fact is that the Government set up a price competition between nuclear, various forms of renewable energy, and carbon capture and storage,  for who could offer the lower strike price at which each unit of 'low carbon' electricity production would be sold. Nuclear power has lost this battle, as discussed in earlier blogs. Its supporters have reverted to advocating the only historical precedent for building nuclear power stations - namely that somebody (other than private investors) has to guarantee to pay the construction costs. That is why SONE wants their power stations to be directly funded by the Government. But this is politically, and in very practical business terms, impossible in the UK and the EU's increasingly liberalised energy markets.

It would certainly look bizarre if the Government's plans to reduce subsidies for wind and solar pv were implemented at the same time as a much higher strike price for nuclear power - very bizarre in view of the fact that nuclear power is much, much, less popular as reported in opinion polls compared to the renewable fuels. Government plans to reduce subsidies for both onshore wind and solar pv farms by 2013-2015 to around £95 per MWh  have already been announced, with the likelihood that under the Government's plans for its own version of feed-in tariffs onshore wind will not be given more than around £80 per MWh from 2017. Even offshore wind's costs for 15-20 year contracts have, according to Government aspirations, to be brought down to £100 per MWh by 2020. So what political hope is there for EDF to be given a lot more than £100 per MWh for a contract of 25 or 30 or even 50 years in length? None whatsoever!

It is not surprising that SONE have now recognised political reality.

However, the effective demise of the British nuclear construction programme will probably not be recognised by the Government itself in its public relations output. This is partly because it wants to help keep a few consultants in their jobs for a bit longer. However, this refusal to admit the collapse of the nuclear programme  is also because the Government would have to admit that either it has to massively increase investment in renewable energy and energy efficiency or abandon any remaining chance of getting at all close to the UK's carbon reduction plan.

For its part, EDF has something of an interest in continuing to maintain that its nuclear plans are still viable. One interest is that if there is little chance of new nuclear power stations, then this questions the Government's commitments to a floor price for carbon. In fact this floor price does very little to encourage new low carbon capacity (because there is no guarantee that the price will continue for long enough) but it does give a lot of money to EDF's subsidiary, British Energy, who own Britain's old nuclear power stations - and the Government has announced that these power stations are likely to have their operational lives extended. The other gainer from the carbon floor price is the Government itself. Perversely, the more gas is used to generate electricity, and the less renewable energy is generated, then the more the Treasury receives in tax revenue under the Government's carbon floor price scheme. The Treasury, of course, is these days enthusiastically promoting natural gas power stations to the extent that it is giving large tax breaks to oil and gas companies to encourage more rapid depletion of British gasfields and is backing proposals to give 'capacity credit' subsidies to gas power station operators in the Government's Energy Bill.

Oh yes, the Government's Energy Bill.....this is coming to Parliament soon. Watch this space.

See the press report on :
http://www.telegraph.co.uk/finance/newsbysector/energy/9543057/No-nuclear-power-at-any-price-says-lobby-group.html