Go nuclear, but keep your hand on your wallet
The government claims that the private sector will meet the costs of new nuclear plants, says Irwin Stelzer. But there is every risk that the public will end up footing the bill
John Hutton, the energetic Secretary of State for Business and a few other things, has reason to be pleased with the expressions of ‘significant interest’ in constructing new nuclear power plants that he has received from British Energy, EDF Energy, E.ON UK and Iberdrola — the British, French, German and Spanish utilities — respectively. These are among the handful of companies in the world with the knowhow and financial resources to build and then successfully operate these capital-intensive and complicated plants.
The government’s case for the need for new nuclear plants is straightforward. The nation’s ten existing plants will be shut down by 2023, reducing this low-carbon source of energy from 19 per cent of the nation’s total to 6 per cent. The government is hoping that the first of the plants to replace the existing fleet will come on line in 2017, or 2018 at the latest. If Britain is to avoid excessive reliance on natural gas from places that are not completely reliable trading partners, and if it is to meet its wildly optimistic plans to reduce carbon emissions, it will have to hold to some such timetable.
So far, so good. But this ignores the billion-dollar question: will the private sector provide the capital to finance this replacement-and-then-some of the nation’s nuclear plants? The government is confident that it will, and at no cost to the taxpayer.
The first step will be to clear away the regulatory hurdles to new construction. The government has sworn to do this, but experience with wind farms suggests that there is a wide gap between legislation and practice. It generally takes about two and a half years to do the research and paperwork to prepare an application for permission to build a wind farm. From that point, the law provides that the period between planning application and approval shall be no longer than 16 weeks. That target is missed on 95 per cent of all projects; on average, it takes about three years to get a decision. If the application is denied, and an appeal for an inquiry filed, add an additional 18 months until a final decision — up or down — is reached. And wind farms, despite local opposition, are far less likely to attract the sort of well-funded, sophisticated opposition that nuclear plants will: there is a large international pool of expert opponents ready and willing to fight every new plant.
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Ian
March 14th, 2008 12:05pmTypical sleight-of-hand, "we love the private sector" rubbish from Labour. The big point is that, given that every citizen uses electricity, taxpayers will foot the bill as consumers for the new plants anyway. So the only question is, should such plants be built and run for private sector profit or as facilities for the community? "New" Labour, as usual, looks for the clever-stupid answer, which is simply based on arbitrary national accounting rules....
Dwight Vandryver
March 15th, 2008 12:51amThere are about 150 working nuclear reactors producing power in Europe (23 in the UK, 59 in France). The notion that by not building new plant, the UK would somehow be isolated from a Chernobyl style accident is untenable. As these stations have operated without incident and use different designs, it is fair to assume that the risk of an accident is negligibly small, but there can be no absolute proof of zero risk. Unfortunately, the THORP reprocessing plant at Sellafield has incurred huge time and cost overruns due to a radioactive leak. Although no danger to the public, it calls into question Britain's ability to conduct nuclear operations safely. It is these fears that the green lobby will amplify to hinder or arrest any new developments; so much so, that a revival of nuclear power in the UK probably will not occur. As a back-up plan for this eventuality, the government has recently announced approvals for a coal fired power station at Kingsnorth and a gas fired station near Plymouth. In terms of meeting EU legislation on CO2 reduction and easing Britain's dependence on fossil fuel imports, the plan is a disaster, but understandable. Alternatively, there is wind power and, as the Times reported, to achieve EU targets would mean building 20,000 wind turbines, which would cause uproar amongst ecologists. There is just one option: import more electricity from France. France is the world's largest net exporter of electricity due to its very low cost of generation. The UK already imports 3% of its requirement from France via an underwater cable. It would place the UK on a par with Italy that has no nuclear generation: the penalty being that electricity prices there are 45% above the EU average.