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Nuclear power for Britain – a “financial basket case “

Recent days have seen Government ministers blaming opposition parties for
the failure to deploy nuclear power in the UK. But the problem is not
politicians, not the Conservatives, Labour or anyone else; it is the
extreme difficulty of delivering nuclear power itself.

Financially, it is a basket case, and any other technology with similar problems simply wouldn’t
get past the lobbyists’ meetings with politicians. On August 7th Kwasi
Kwarteng produced a tweet blaming Nick Clegg and Labour for delays in
building nuclear power, saying: ‘Thanks to Labour’s 13-year moratorium
and Lib Dem blockers in the Coalition, we made no progress on nuclear.
Supply chains disappeared. Since 2015, we got Hinkley approved and Sizewell
C received planning consent last month. ‘

However, this explanation does
not stand up to serious analysis. In their 2005 manifesto the Conservatives
did not even mention nuclear power, referring instead to renewables and
energy efficiency as a means of protecting energy security. By the 2010
election both Labour and Conservatives were backing the idea of building
more nuclear power plant, but Conservatives ruled out giving nuclear
subsidies. Their manifesto said they would be ‘clearing the way for new
nuclear power stations – provided they receive no public subsidy’ .Of
course the Liberal Democrats were very much opposed to new nuclear power
before they joined the Coalition in 2010.

But then it was the Liberal
Democrat Energy Secretary of State Chris Huhne who proposed a new
electricity market reform consultation paper at the end of 2010. This
allowed, in effect, nuclear power to receive public subsidies under the
cover that this same subsidy would be available to other low carbon
sources. This laid the basis for the current contracts for difference (CfD)
regime which is funding Hinkley C.

But in practice the offer of a generous
CfD for Hinkley C proved not to satisfy the prospective nuclear generators.
This included EDF which was/is backed by the French state who wanted to
promote France’s new European Pressurised Reactor (EPR) design. The most
fundamental problem was that no major British political party was then
willing to underwrite cost overruns – this was seen as giving nuclear
constructors a blank cheque, which it is. Nevertheless this underwriting
has now, latterly, been given EDF for Sizewell C under the so-called
‘RAB’ arrangements.

100% Renewables 3rd Sept 2022

September 4, 2022 - Posted by | business and costs, politics, UK

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