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Britain’s Wyfa nuclear power project – one hell of a cost to the taxpayer.

Dave Toke’s Blog 11th Nov 2018 ,Greg Clark looks likely to go down in history as the Minister who signs off
on a nuclear construction deal with Hitachi for the proposed Wylfa power plant that led to a stupendous loss for the taxpayer. That loss might be £20 billion or more.

Clark has apparently put no discernable effort into the objective of securing ‘subsidy’ free contracts for onshore wind and solar. However, he has been spending a lot of time concocting a plan to finance the Wylfa nuclear power plant that will, on the basis of past performance, generate huge losses for the public purse years down the line.

All the talk from BEIS (the energy ministry) is of the new ‘Regulated Asset Base’ (RAB) financing of nuclear power plant. Except that what’s really happening is not really an RAB model at all. It’s a piece of brownwash to obscure the reality of Government blank cheque to cover whatever it costs to build the nuclear plant. That’s because the whole plan hinges on the constructors being able to pass on cost-overruns onto the Government.

And that’s the point. Nuclear power stations being built in the west have almost always tended to have large cost overruns. Recent ones have ALL suffered horrendous cost overruns – in the USA (4), France (1) and Finland (1).

Yet, some otherwise sensible, financial analysts seem to ignore this fact as they extol the virtues of RAB financing. They implicitly assume that Wylfa will proceed precisely on target, in which case, they say the Government will deliver the project at a ‘cheaper’ price than Hinkley C through the provision of Government loans with low interest rates.

Sure, the headline price that will be paid by the electricity consumer, over 35 years, will be a bit cheaper. But that’s likely to be at one hell of a cost to the taxpayer.
http://realfeed-intariffs.blogspot.com/2018/11/how-greg-clarks-hitachi-deal-could-lead.html

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November 13, 2018 - Posted by | business and costs, politics, UK

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