Sunday 26 February 2017

Tens of billions of taxpayers money at risk as pressure mounts to spend billions more on new nuclear

Giant portions of public spending are now at risk of pouring down a nuclear power black hole as calls for the Government to make direct investments into new nuclear power plant intensify. Ultimately the sums at risk would be much larger than the Government's own estimates of the cost of the Trident nuclear weapons system.

Former Minister and House of Commons Energy Committee Chair Tim Yeo is the latest to call for the Government to take 'minority' equity shares in new nuclear m projects. There has been a flurry of such demands in the wake of the near bankruptcy of Toshiba, who spearhead the 3GW proposed plant at Moorside in Cumbria.

In fact nuclear power is proving to be virtually undeliverable and ruinously expensive in western countries. Toshiba's problems stem from the fact that they own Westinghouse who are responsible for the construction (so-far non-construction) of AP1000 reactors in South Carolina and Georgia in the USA. These plant are as costly as the failing French EPR design that is so disastrous in  the cases of the Finnish and French reactors, something which is bankrupting the French nuclear industry and EDF.

Despite the manifest bankruptcy of the technology, rather than question whether it is right to continue with the new nuclear programme, its supporters are in effect wanting to bet the British economy on it. If the Treasury are forced against their will to sanction 'equity' stakes in new nuclear reactors, the losses and., eventually, all the liabilities will fall on the UK Government. Nobody else will invest in the projects unless the Government guarantees the lot. Hinkley C (3.2GW planned) will cost over £24 billion according to the European Commission. The reactors at Moorside and Wylfa, assuming they cost similar amounts, would thus make the taxpayer responsible for around £50 billion of debt. People will claim that the Government is 'only' taking a minority equity stake. That's how it will start, and then would represent an enormous amount of state spending and liabilities. After all one quarter of £24 billion is still £6 billion. But it won't end there, as sure as night follows day, not with the construction costs as well as the rest. It never does with nuclear power!

Normally of course under the Government's 'low carbon' programme, project raise their own finance and the project owners earns their money from premium price contracts (CfDs) awarded through the Government. That is always the case with renewable energy projects. They find their own money. Electricity consumers pay a premium price to enable this on their bills. But now for nuclear to go ahead, so it is said, not only will the consumers have to pay a high premium price, but taxpayers will have to fund at least part of the construction as well. This is money, please note, that will disappear from the Government's coffers as the plant is built - it is not something that will be shuffled onto future generations like decommissioning

The fact that the Government is effectively financing the building will produce a conflict of interests with the Government negotiating with itself in setting the CfD price. No doubt a 'lower' CfD price will be set (that is less than the notorious Hinkley C price) when in fact it will be the taxpayer that will end up paying out countless billions for the projects.

Annual spending on primary education is around £26 billion. Hence building just Moorside will give the Government liabilities (which are likely to be paid by the Government) which will rival this spending.

But then to listen to some people, you'd think building Moorside was more important than closing down all primary schools for a year.

It isn't.

Some sources:

http://www.bbc.co.uk/news/election-2015-scotland-32236184

http://www.telegraph.co.uk/business/2017/02/25/yeo-treasury-needs-pour-billions-nuclear-projects/

Wednesday 15 February 2017

No we don't need any more nuclear power stations to power electric cars

Desperate to cover the latest catastrophic meltdown to hit the nuclear industry as Toshiba sinks under the weight of its failures to construct nuclear power plant through its Westinghouse subsidiary, nuclear supporters are spreading fake news about the alleged need for new nuclear power stations to power electric cars.

Last Saturday the Times published a headline stating 'Electric cars mean UK could need 20 new nuclear plants'. I organised the submission of a letter to the Times objecting to the headline. The letter has not been printed, although today they did carry a correction (lower left hand corner, page 26) that the headline ‘was a significant miscalculation based on a confusion of energy and power. We apologise for the mistake’.
Yet, the headline and story was repeated by The Mail on the very day the Times retracted it. See http://www.dailymail.co.uk/news/article-4215622/20-new-nuclear-power-stations-needed-electric-cars.html?ito=social-twitter_dailymailUK

Will the Mail also carry an apology? I doubt it. 

Of course, as could be expected, far from the Toshiba meltdown causing the UK Government to re-think its nuclear strategy, there are reports that the UK Government is now considering putting billions of pounds of taxpayers money at risk to prop up the failing Moorside nuclear project. Moorside is dependent on the AP1000 reactor design that has failed so miserably and catastrophically to be delivered in the USA (in South Carolina and Georgia). It has ruined Toshiba.  Up until now the Hinkley C project (to be developed by EDF) is relying on a 35 year payment of £92.50 in (2012 prices - now about £97/MWh) and on EDF being propped up by large infusions of cash from the French Government. 

The electricity consumer will have to pay for Hinkley C, but no more than £2 billion of taxpayers money is being risked as a guaranteed loan. But now people seriously expect the Government to step in as equity providers for Moorside where no company in the world would have the madness to risk their money without a Government guarantee to foot the bill.  Indeed the taxpayer plan to fund Moorside is likely to escalate so that tens of billions of pounds of taxpayers money could do down a nuclear black hole, as well as the electricity consumer paying over the odds for 35 years. See https://www.ft.com/content/fc9d036e-ea44-11e6-967b-c88452263daf

It is surely madcap politics to take as a lesson from the fact that a technology is failing for the Government to re-double its efforts to back it - pouring tens of billions of money that could be spent on public services (that is already in very short supply) down the drain for power plant that may take several decades to be built.

Meanwhile of course wind and solar pv farms don't need any taxpayer money. They can be built at lower prices than nuclear power - but of course the Government is only now issuing contracts for nuclear power!

Paul Dorfman made some useful comment on the Toshiba meltdown at https://www.youtube.com/watch?v=ZXA8NsM1W7c&app=desktop

See our letter below:

Sir,

We are concerned about the highly tendentious headline ‘Electric cars mean UK could need 20 new nuclear plants’ (report February 11th). The story speculated about the need for increased electricity supply.

The headline implies dogmatically that increases in non-fossil generation can only come from nuclear power rather than green energy. Why not speculate instead about the number of windfarms, solar farms or energy efficiency measures needed?

The changing profile of UK electricity requires a flexible supply system based on variable renewable energy, storage, power plant reserves and responsive demand and charging systems - not outdated, inflexible and, so far, undeliverable nuclear power.

In the last 15 years renewable energy has expanded from around 3 per cent to what will soon be 30 per cent of UK electricity consumption. In the same period not a single nuclear power plant has come on line, nor is likely to at least until 2026, and even then only with luck and huge expense.

Signatories:

Corresponding signatory:
Dr David Toke, Reader in Energy Politics, University of Aberdeen, tel 07583568643, email: d.toke@abdn.ac.uk, Department of Politics and International Relations, University of Aberdeen, Kings College, Aberdeen AB24 3QY

Jeremy Leggett, Solar Century, email: jeremy.leggett@solarcentury.com

Jonathon Porritt, Forum for the Future, email: JPOffice@forumforthefuture.org

Professor Andrew Stirling, Science Policy Research Unit, University of Sussex, email: a.c.stirling@sussex.ac.uk

Professor (Emeritus) Dave Elliott, Department of Engineering and Innovation, Open University, email: david.elliott@open.ac.uk

Tom Burke, Chairman, E3G, email: tom.burke@e3g.org

Professor Mark Pelling, Department of Geography, Kings College London, email: mark.pelling@kcl.ac.uk

Professor Gordon Walker, Lancaster Environment Centre, Lancaster University, email: g.p.walker@lancaster.ac.uk

Professor Jeffrey Henderson, Professor of International Development, University of Bristol, email: Jeffrey.Henderson@bristol.ac.uk

Professor (Emeritus) Andrew Blowers, Faculty of Arts and Social Sciences, Open University, email: andrew.blowers@open.ac.uk

Professor (Emeritus) Bryan Wynne, Science Studies, Lancaster University, email: b.wynne@lancaster.ac.uk

Professor Mark Lemon, Institute for Energy and Sustainable Development, De Montford University, email: m.lemon@dmu.ac.uk

Dr Alan Terry, Senior Lecturer in Geography, University of West of England, email: Alan.Terry@uwe.ac.uk

Dr Philip Johnstone, Research Fellow, Science Policy Research Unit, University of Sussex, email P.Johnstone@sussex.ac.uk

Dr David Lowry, independent consultant email: drdavidlowry@gmail.com

Dr Abhishek Agarwal, Senior Lecturer in Strategy and Policy, Robert Gordon University, email: a.agarwal@rgu.ac.uk

Dr. Gabor Sarlos,  Senior Lecturer,  University of Worcester, email:  g.sarlos@worc.ac.uk

Emily Cox, Associate Tutor, Science Policy Research Unit, University of Sussex, email: E.Cox@sussex.ac.uk

David Thorpe, Sustainability Author and Consultant, email: hello@davidthorpe.info

Michel Lee, Senior Analyst, Promoting Health and Sustainable Energy, email ciecplee@verizon.net

Dr Matthew Cotton, Lecturer, Department of Environment, University of York email: matthew.cotton@york.ac.uk

Katherine Begg, email: kgbegg@googlemail.com

Dr Paul Dorfman, The Energy Institute, University College London, email: p.dorfman@ucl.ac.uk

Dr Ben Fairweather, Faculty of a Technology, De Montford University, email: nbf@dmu.ac.uk

Dr Ian Fairlie, independent consultant, email: ianfairlie@gmail.com

Dr Matt Watson, Senior Lecturer in Human Geography, University of Sheffield, email: M.Watson@sheffild.ac.uk