The politics of the UK nuclear renaissance

The ‘nuclear renaissance’ just got nasty. Britain has threatened Austria that it will take “every opportunity” to harm the country if Austria goes ahead with plans to challenge the European Commission decision on the granting of state aid for the proposed Hinkley point C nuclear power station. In response Austria has declared that it “won’t be intimidated” and will stick to its guns in fighting for the principle of no subsidies for atomic energy.

Austria has for a long time opposed nuclear energy and has no nuclear plants itself. More specifically however, the concerns from Austria are that the granting of £92.50 per megawatt hour over the 35-year life of the Hinkley plant which is double the current price of electricity paid through consumer bills, is a market distortion that will, as Paul Dorfman argues, “[mess] with the European internal energy market” as well as messing state aid rules. Hinkley C is the key fault line in the European Energy Union more broadly. Late last year the European Commission granted the subsidy scheme for the proposed Hinkley C European Pressurized Water Reactor (EPR), however since then, things have become even more complicated at Hinkley point.

EDF have postponed their final investment decision, which was supposed to have been made by the middle of last year. Negotiations have faltered between EDF and China National Nuclear Corporation and China General Nuclear Power. Then there is the dire financial situation of reactor vendor Areva, and of course, the fact that the EPR reactors under construction in Finland and France are vastly over budget and years behind schedule. Tony Roulstone, a nuclear engineer and advocate of nuclear, referred to the EPR design set for Hinkley as being potentially ‘unbuildable’. Hinkley C would likely be the most expensive nuclear reactor in the world if it is ever constructed.

What is once again clear is the central contradiction in the politics of pro-nuclear advocacy: the simultaneous enthusiasm held by the UK political consensus in terms of a near-religious devotion to ‘liberalised markets’ and a hatred of state intervention, alongside a desire to construct new nuclear power which has never been built in a liberalised energy market before. As pointed out in a recent report by Energy Fair, quoting a Citigroup analysis: “Three of the risks [of nuclear power] faced by developers: Construction, Power Price, and Operational are so large and variable that individually they could each bring even the largest utility company to its knees financially. This makes new nuclear a unique investment proposition for utility companies.”

What this means is that private investment is unlikely to take on the full costs of such risks and requires protection from these risks through state financial support in various forms. State funded energy policy can be a good or bad thing depending on your ideological preferences however nuclear proponents should just be more honest about the levels of support likely to be required in order to have an actual ‘renaissance’ of any scale. There are 69 reactors under construction in the world but only one is being constructed in a liberalised energy market: Hinkley C. It is already 5 years behind schedule and is at least double the initial cost estimates.

Also, lets not forget, the state has already done a tremendous amount – in fact, almost everything it can – to make new nuclear happen in the UK. Every wish of the nuclear industry has been granted by the UK government. The British planning system has been ‘streamlined’ with nuclear a key inspiration of the need to speed things up. Government has created one of the best institutional contexts in the world for developing nuclear with the new Office for Nuclear Regulation and the Office for Nuclear Development in DECC, and UK Gov has ensured that nuclear regulators are equipped to pre-license designs for new build (Generic Design Assessment). As well as this a strategic siting assessment and environmental assessment were carried out further ‘streamlining’ the process of new nuclear construction. As already mentioned, Electricity Market Reform has been brought in, where, despite being a mature technology, nuclear was granted Contracts for Difference at double the current market rate for the next 35 years.

As well as this, there have been signs of less visible kinds of governmental support. As Rob Edwards reported in The Guardian, there has been collusion between government and industry in ensuring the ‘correct’ nuclear message – i.e one that is pro-nuclear, was conveyed following Fukushima. Just days after the accident (when surely there was no way to know the full consequences) correspondence between DECC and EDF stated that “We need to ensure the anti-nuclear chaps and chapesses do not gain ground on this. We need to occupy the territory and hold it”.

What is more there is a political consensus on nuclear power where all main parties agree it should get the go-ahead, and public opinion is said to be favourable to the technology. It is important to be reminded of these facts because commentators like Mark Lynas and George Monbiot have filled newspaper pages with articles that have quite successfully convinced people that a rampant anti-nuclear movement has been the major problem leading to a stalled renaissance. Rather, what we are seeing is that in the UK, these ‘obstacles’ (pesky public opposition and the like) have largely been removed, yet their removal has done absolutely nothing to speed up or make cheaper the construction of nuclear power. As David Toke writes, the complaints by the Austrians may in fact be useful for the wider nuclear industry as this intervention can be held up as the sole reason for the stalling ‘nuclear renaissance’ deflecting attention away from the endemic problems and contradictions presented by the attempt to construct new nuclear power.

As Steve Thomas writes, the key question that needs to be asked is this: “Competitive energy markets and nuclear power: Can we have both, do we want either?” It does seem that if you want nuclear then you must also want state-led government intervention. Perhaps you also need the state to intervene in other ways such as silencing nuclear “chaps and Chappesses’ (whatever they are) as well as threatening sovereign nations who launch legitimate legal challenges due to concerns about the distortion of the European Energy Market in which they are a part. Placing more focus on the changes in governance and government behaviour that nuclear potentially requires would make for a more honest debate where the ‘actual sustainability’ of nuclear can be assessed, beyond a singular focus on CO2 which has trumped all ethical discussion related to nuclear technology in the UK context. This has contributed to unrealistic expectations of what nuclear can deliver, and the costs and timescales that such delivery will involve.

Dr Philip Johnstone

Dr Philip Johnstone is a Research Fellow at the Science Policy Research Unit and a member of The Sussex Energy Group

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3 comments on “The politics of the UK nuclear renaissance
  1. David says:

    Prime Minister David Cameron is misguided in being insultingly dismissive of Austria’s challenge to the UK wanting to provide massive taxpayer and electricity bill payer subsidies for a new nuclear reactor being planned by a foreign company,(EDF (= Electricity of France), which will repatriate this huge amount of money from British citizens into its Paris bank account. Austria is not opposing the UK’s right to use nuclear power, but it does oppose its plan to support its construction and operation with subsidies, as this will create a precedent across Europe, hence potentially assisting countries on its own border, such as the Czech Republic, to build massively subsidized nuclear plants too.
    The UK justification for giving EDF such a huge subsidy, is it claims nuclear is either low carbon, or even carbon-free: both assertions are wrong. Read Professor Barnham’s excellent recent article to find out why. Energy and Treasury Ministers – and Bridgwater’s local MP Mr Liddell-Grainger, who as a Tory ought to oppose huge public sector subsidies, should especially read it!
    False solution: Nuclear power is not ‘low carbon’
    By Professor Keith Barnham, Ecologist, 5th February 2015
    Dr David Lowry, environmental policy and research consultant

  2. What part of “common market” do the Brits not understand? More of HPC saga here

  3. mark4asp says:

    The politics got nasty at the point where Austria threatened to sue Britain.

8 Pings/Trackbacks for "The politics of the UK nuclear renaissance"
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