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Unlimited exposure to costs by taxpayers and consumers, to UK’s new nuclear plans

Dave Toke’s Blog 7th Aug 2018 So finally the Government has, after I feared so long it would, chosen the
doomsday option to fund new nuclear power stations – one that will be
disastrous for the consumers and taxpayers.

After years of swearing that
they would not offer subsidies to nuclear power, and saying that in the
future the terrible drain of (historical) over-spending on nuclear power
would stop, the Government has gone back to square zero.

Essentially, under
the Government’s proposals for so-called ‘Regulated Asset Base’ (RAB) of
funding nuclear power (described in a recent article in ‘Unearthed’, a
Greenpeace publication), the nuclear developers will have no real limit on
what they can spend to build the power stations. It is a recipe for
national disaster.

No private developer is willing to take the construction
risks of funding nuclear power in the UK, whatever ‘strike price’ is
offered for the electricity that might be generated in future. Doesn’t that
tell you something?

So EDF stepped up to the mark. EDF, the French
state-owned company, may be starting the real part of the construction of
Hinkley C in 2019/2020. The French state will pay for the inevitable cost
overruns that come along with building the plant, combined quite probably,
with an out-of-contract bailout by the British Government when the going
gets tough.

But now the Government is casting around for another nuclear
power plant to be built, – Wylfa or Sizewell C – but neither developer
(Hitachi or now EDF) wants to take the risk of paying the almost inevitable
losses on the project. So enter the Government’s new proposals which will
no doubt be promoted as a simple accountancy trick to lower costs, but hide
the fact that the state will take the losses, to be divided up between us
as taxpayers (loss of guaranteed loans and construction risk guarantees)
and electricity consumers (advance payments on top of electricity bills).
And, note this, whatever ministers may say, the exposure by taxpayers and
consumers in UNLIMITED.

August 10, 2018 - Posted by | politics, UK

1 Comment »

  1. Solution is simple: the UK must move away from nuclear power to renewables that are cheaper than nuclear, produce no nuclear waste, are progressively deployable so that investors can get an early return on their capital, and so forth. Energy storage systems are progressing rapidly in technology, such that the “base load’ argument for nuclear power is not longer pertinent. Future generation of young people in the UK will wonder what on earth the present UK Government is thinking about in its energy strategy. There is only one explanation for present policy: military considerations. Therefore, the UK tax payer is essentially being asked to increase its “military spending” drastically. Why does the UK Government not make an honest admission of what is really happening in its policy decisions ?

    Comment by Dr Timothy Norris | August 10, 2018 | Reply

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