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UK’s Nuclear Energy Finance Bill Committee hears problems about funding of new nuclear projects, that will be too late to affect climate change.

 nuClear News No 126 December 21,  . New Nuclear Energy Developments In Safe Energy Journal No.92 and nuClear News No.135 we reported on a debate in the House of Commons on the Second Reading of the Nuclear Energy Finance Bill, which took place on 3rd November. (1) Since then, there have been several meetings of the Nuclear Energy Finance Bill Committee, including one session which took evidence from Doug Parr of Greenpeace, Mycle Schneider of the World Nuclear Industry Status Report and Professor Steve Thomas. (2)

The SNP’s Energy Spokesperson at Westminster, Alan Brown, asked Mycle Schneider about the argument that the UK needs baseload power and can’t meet its net zero targets without nuclear power. Mycle pointed out that we are in a climate emergency, so we need reductions in carbon emissions as quickly as possible. For every pound we spend we need to see large and fast results. It’s clear that there are other options beside nuclear which are more climate effective. The cost of renewables is cheaper and nuclear is five times slower. Possible investments in nuclear which might deliver after 2030 are much too slow.

Regarding the need for baseload electricity, the National Grid’s scenarios say nothing about the need for reliable baseload. Only one out of their three scenarios needs Sizewell C. Nuclear is not flexible. If the wind isn’t blowing nuclear doesn’t help. What is required is batteries and demand-side responses to compensate for intermittency. 

Analysis of the French nuclear fleet shows that nuclear power is not a reliable source providing power 24/7. For 2019 – the year before Covid – when EDF starts an outage for maintenance and refuelling it has lost control entirely over the date and time it is able to restart its reactors. There were over 40 cases of revised times and dates. EDF was not even able to make reliable predictions 24 hours before the reactors were due to restart.   

  Labour’s Alan Whitehead asked Mycle Schneider about the experience of the United States using the Regulated Asset Base (RAB) funding model for two plants in South Carolina which were abandoned recently. Should there be measures in any Bill which make sure any nuclear plant is finished to avoid consumers being dumped with the cost of a plant that wasn’t finished. Construction of VC Summer started in 2013 and it was supposed to come on-line in 2017. By 2017 the cost estimate had increased by 75%. In July 2017 construction was abandoned. This was one of the consequences of the fact that Westinghouse filed for bankruptcy. The affair has cost consumers billions.

Steve Thomas said what marked out the VC Summer project and a similar project in Georgia from other US projects was that they allowed the recovery of costs from consumers before completion of the reactors. The Summer experience shows very clearly the folly of using the RAB model. We would have to be careful with any legislation which prevents nuclear plants under construction being abandoned. Dungeness B took 24 years from the start of construction to commercial operation, and over its 32 years of operation its availability was well below 50%. It should have been abandoned before it was completed.

Matthew Pennycook said there is a lack of clarity around the Chinese company, CGN’s investment in Sizewell C and how that interacts with the intentions of this Bill. He asked what is in the 2016 Strategic Investment Agreement and what provisions there are in that agreement that would allow the Government to remove CGN. And related to that there was £1.7 billion in the budget to enable a final investment decision for a large scale nuclear project. Is that money to buyout the CGN stake? 

Steve Thomas said in the 2016 Agreement CGN agreed to take up to 20% of the Sizewell C project up to the Final Investment Decision (FID). They have an option to take 20% of the construction and operation of the plant if it goes ahead. EDF and CGN have spent about half a billion pounds so far, It may take another £0.5 billion at the most to get to FID. So £1.7bn seems too much. In terms of how you get CGN out of Sizewell C it probably depends on what happens to Bradwell B. The Chinese really want to get the endorsement of UK nuclear regulators for it HPR1000 reactor. If they are not going to be allowed to build Bradwell B, they are unlikely to be interested in putting money into Sizewell C.    

  Steve Thomas told MPs there is a lot of missing detail in the RAB proposals. One of the biggest elements is how much the surcharge will be during the construction. The Government has said it will be a maximum of about £10 per year per consumer. That would yield £6bn. In the context of a project that will cost £24-40bn, plus financing costs, £^bn is not much of a game changer. 

PMQs On 24th November, during Prime Minister’s Questions Matthew Pennycook asked: “The Government’s integrated review has concluded that the Chinese state poses a systemic challenge to our national security, and the Prime Minister has made it clear that when it comes to China, we must remain vigilant about our critical national infrastructure. Can he therefore confirm unequivocally today that plans for China General Nuclear to own and operate its own plant at Bradwell in Essex have been abandoned, and explain to the House precisely how and when his Government intend to remove CGN’s interest from the Sizewell C nuclear project?”  

Boris Johnson replied that “…we do not want to see undue influence by potentially adversarial countries in our critical national infrastructure. That is why we have taken the decisions that we have. On Bradwell, there will be more information forthcoming – What I do not want to do is pitchfork away wantonly all Chinese investment in this country, or minimise the importance to this country of having a trading relationship with China.” (3) 

The Times pointed to the National Security and Investment Bill, going through parliament at present, which will allow the government to “screen” and potentially block sensitive foreign investments, and concluded that China will be cut out of future involvement in developing new nuclear power stations, but this is still not entirely clear. (4)  

  Mr Pennycook later responded to the PMs answer via Twitter: “We need certainty on the future of China’s involvement in UK nuclear power and clarity about how and when the Government intends to remove China’s state-controlled nuclear energy company from involvement in any future UK project.” 

Subsequently the team behind Bradwell B said China’s nuclear group remains committed to the project. (5)


December 12, 2021 - Posted by | politics, UK

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