Nuclear Nuisance Nuclear Shambles Pet Peeves Political Nightmare

The Nuclear Begging Bowl Redux

Image Author : Hendrik Tammen

Constructing and operating Nuclear Power facilities has historically required overt and covert support from nation states. A non-negotiable, non-vanishing fraction of every tax dollar/euro/rand goes to keep Atomic Energy alive.

So does the population get some benefit from this costly energy ? Some people ask “payback ? What payback ?” and cast dark hints that Nuclear Energy never has, and never will, produce a net Energy benefit, after all the labour, time, concrete, steel, liquid fuel and other resources that have to be used in reactor building, site monitoring and waste disposal.

So it seemed rather like the British Government had put themselves in a cleft stick, announcing a new round of building Nuclear Fission electricial generation plant, but at the same time foreswearing any state financial support :-

“Carbon pricing to encourage new nuclear power stations : Minister says framework will benefit clean fuels : Government plan rules out direct state subsidies : Wednesday 14 June 2006 : The British nuclear industry will build new nuclear power stations without direct state subsidies so long as the government sets a high price on carbon-polluting electricity, Malcolm Wicks, the energy minister, said yesterday. He said a proposed carbon pricing framework will encourage use of all non-carbon electricity sources including renewable energy, nuclear and even micro wind turbines for home supply…But Mr Wicks ruled out direct subsidies, or a guaranteed price for nuclear on the electricity grid. He also refused any direct help with the £63bn estimated cost of decommissioning nuclear waste. “What is important for government to do is find ways to incentivise clean forms of energy. I don’t think it is for us to favour nuclear as opposed to renewables, but if we can produce that framework based on a price for carbon, I think that is conceptually the way ahead. It is not for us to say that nuclear should have at least this price for 20 years. That would be absurd.””
“Meeting the Energy Challenge : A White Paper on Nuclear Energy : January 2008”

p. 119 : “Our proposals on nuclear power : THE GOVERNMENT’S PRELIMINARY VIEW : The Government is not itself proposing to build nuclear power stations. We have, however, reached the conclusion that private sector energy companies should have the option of investing in new nuclear power stations…”

This seems like “Read my lips : “No public subsidy””.

Yet despite the protestations of “no public subsidy”, there were still caveats, for example the Government to act as “insurer of last resort” in the event of an accident, the Government to implement policies to “level the playing field” and the continued support for radioactive waste disposal :-

“Thursday, 10 January 2008 : New nuclear plants get go-ahead : A new generation of nuclear power stations in the UK has been given formal backing by the government. Business Secretary John Hutton told MPs they would give a “safe and affordable” way of securing the UK’s future energy supplies while fighting climate change…The government will not be building any reactors itself – but it says it will take steps, such as streamlining the planning process and identifying likely sites, to encourage private operators to build them. Mr [John] Hutton conceded that no nuclear plant had been built anywhere in the world without public money – but he insisted there would be no subsidies from the UK government. “It is a matter for the power companies to bring forward proposals on the basis that there will be no public subsidies,” he told BBC Radio 4’s The World at One. Public funds would only be provided in the “very unlikely circumstances of an emergency at a nuclear plant,” added Mr Hutton. According to its white paper, the government will not offer extra incentives to invest in nuclear power, but some tax advantages may be available to firms hit by decommissioning costs to ensure a “level fiscal playing field” with other forms of electricity generation. The government has also yet to decide how much new nuclear operators should pay towards the cost of building underground caverns as a permanent storage site for Britain’s nuclear waste…Mr [John] Hutton assured MPs that private operators would be expected to meet the full cost of building nuclear plants, decommissioning and disposing of waste…

The Energy companies were apparently willing to play ball :-

“No need for nuclear subsidy if government looks longer term : April 26th 2006 : The Government must give more detail on its plans for future restrictions on carbon emissions if low carbon energy sources including nuclear are to play a proper role in future power generation, the CBI said Monday. Publishing its response to the Government’s energy review, the CBI [Confederation of British Industry] said companies would seriously consider investing in a new nuclear build programme, without the need for Government subsidy, if the right long-term framework was in place to support low carbon energy sources. This framework would also ensure that clean coal technology, and tidal and other renewable energy sources, could compete when investment decisions are taken. But the CBI says the current lack of clarity about the mechanisms and policies for pricing carbon after 2012 is holding back investors from committing the large sums necessary – estimated at up to £50 billion – to construct new low-emission generating plants. Fears over the feasibility of new nuclear power plants are often “more perceived than real” according to the CBI submission, and neither the waste nor the cost issue are insurmountable barriers…”

“EDF pledge to bankroll £10bn nuclear project : Robert Lea, Evening Standard : 7 December 2007 : EDF Energy, London’s electricity company, has told the Government it is prepared to shoulder the cost of building a £10bn fleet of four nuclear power stations without the support of a penny of taxpayers’ money. In its strongest pitch yet to run Britain’s nuclear future, EDF has submitted costings to the Treasury that would see it build four giant units capable of replacing more than two-thirds of the UK’s current ageing fleet of reactors. In a private speech to City bankers this week, EDF’s UK chief executive Vincent de Rivaz said using state-of-the-art European reactor technology as its business model for the project would make money for investors. ‘There is no subsidy in the business case,’ said de Rivaz. ‘There is no line in the budget which is called ‘taxpayers’ money’. The nuclear option is based on sound economics.’ The pitch from EDF would see the new UK power stations, equivalent to nearly 10% of the country’s power needs, effectively bankrolled by its parent Electricité de France, by far the world’s biggest nuclear power generator…”

The mask has come off the acquiescent smile recently, however :-

“EDF calls for support for nuclear industry : By Ed Crooks : May 25 2009 : New nuclear power stations will not be built in Britain unless the government provides financial support for the industry, the head of the country’s biggest nuclear generator has warned. Vincent de Rivaz, chief executive of the UK subsidiary of EDF, told the Financial Times that a “level playing field” had to be created that would allow the nuclear industry to compete with other low-emission electricity sources such as wind power. His comments call into question the government’s plans for a new generation of nuclear power stations, which ministers have insisted can be delivered without any additional subsidy. In recent months, the government has promised more generous subsidies for offshore wind power and new support for “clean coal” power stations that can capture and store their carbon dioxide emissions. But it continues to resist the idea of similar assistance for nuclear power…Mr de Rivaz suggested that the best way to support the nuclear industry would be to make sure penalties paid by rival fossil fuel power generators under the European Union’s emissions trading scheme were kept high enough to make nuclear investment attractive. He said that such a move would be necessary before companies were confident enough to invest tens of billions of pounds in new reactors. He added that the government needed to put a floor under the price of carbon permits in the EU’s ETS. Since the emissions trading scheme began operating in 2005, however, the price of the permits has proved highly volatile and has fallen sharply in the past year. Mr de Rivaz said: “We will not deliver decarbonised electricity without the right signal from carbon prices.” EDF is also concerned that the additional incentives for renewables will lead to so much wind capacity being built that nuclear power stations will have to be shut down at times of high wind power output, jeopardising the economics of new reactors. Ed Miliband, the UK energy secretary, recently told the Financial Times that the government’s policy was not to subsidise nuclear power. “I think we are right not to subsidise new nuclear power stations because we have an obligation to get to a low-carbon future at the lowest cost to the billpayer,” he said.

“Subsidy demands sink Labour’s nuclear plans : 2009-05-26 : Labour government plans for a new generation of unsubsidised nuclear plants have been left in tatters after the head of the UK’s biggest nuclear generator warned that new nuclear stations will not be built unless the UK government steps in with financial subsidies. SNP Westminster Energy spokesperson, Mike Weir MP, seized on the admission by Vincent de Rivaz, UK boss of EDF Energy, as further evidence that nuclear power was unaffordable, unwise and unnecessary…Mr Weir said: “Claims that there would be no public subsidy for new nuclear stations were always fantasy, and this admission by EDF is both embarrassing and damaging for the UK government. The fact is that no country has developed and maintained nuclear stations without state support, nor ever will. The costs associated with developing new nuclear stations are mammoth, and the expense and risks associated with disposal are incalculable…”

“UK nuclear subsidies: that’s a no, then : June 24, 2009 : by David Fickling : Depending on the goodwill of politicians is nail-biting stuff when your core business evokes memories of Windscale, Three Mile Island and Chernobyl. But Britain’s nuclear energy industry stands or falls on government policy, and RWE, Eon and EDF, the main companies lined up to invest in new nuclear power stations, have been on at the government for years to provide guarantees of “stability”. In practice, that has meant avoiding policy reversals and help getting new nuclear projects through the planning process. But any way of underpinning revenues – please don’t call it a subsidy – would also be welcome. As EDF UK’s chief executive Vincent de Rivaz told the Financial Times last month, the industry would really like a “level playing field” with its fellow low-carbon technologies, renewable energy and carbon capture and storage, which either receive or are to receive government largesse…In other words, give us the money or the nuclear plant gets it…But those hoping for handouts would be disappointed. The “incentives” for nuclear and carbon capture and storage are only there to “help a nascent sector grow”, [Peter Mandelson, Business Secretary] said. “We are not going to achieve a competitive [nuclear] sector by handing out subsidies… we are not in the business of giving out subsidies. We are in the business of maintaining a level playing field.” It’s telling that the “level playing field” the industry wants and the one the government wants bear little resemblance to each other.”

“CBI calls for up to 15 new nuclear power stations : John Cridland, business group’s deputy director general, urges ‘balance of wind, nuclear, gas and clean coal’ : Greenpeace makes case for investment in renewables to ‘create much-needed British jobs’ : Terry Macalister :, Sunday 12 July 2009 : The CBI has thrown its weight behind the nuclear industry’s calls for government to scale back “overambitious” wind power targets and boost the role of atomic energy and coal. The “voice of business” believes energy prices will have to rise 30% in real terms by 2020 and some kind of financial incentives might be needed so that up to 15 new nuclear plants are constructed, capable of providing 34% of UK electricity by 2030. John Cridland, deputy director general of the CBI, denied business leaders had become “anti-renewables” or have been captured by a nuclear lobby, which so far has talked about building six or eight new plants. “We are not obsessed with nuclear. We have a passion for low carbon,” said Cridland. But he warned that government targets of
generating 32% of electricity from wind were unachievable and should be scaled back to at least 25%. “While we have generous subsidies for wind power, we urgently need the national planning statements needed to build new nuclear plants. If we carry on like this we will end up putting too many of our energy eggs in one basket. But by moving government policy in a different direction we can achieve a good balance of wind, nuclear, gas and clean coal,” he added. The comments came alongside launch of a report, Decision Time, which warns that failure to take a more balanced approach will leave the country dangerously dependent on imported gas…”

So, trying to lever themselves out of the cleft stick, is the British Government speaking with “forked tongue” ?

“Energy gap means nuclear power is a must : By Damian Reece : 18 Jul 2009…There are problems with nuclear that Lambert [Richard Lambert, director general of the CBI] freely admits, including planning. “The Government has come up with the idea of a planning commission for industrial projects. The Conservatives don’t like the idea but say don’t worry, it’ll be alright. But people are worried because planning is so critical.” Before any new nuclear power stations get built (which, by the way, will not be complete before 2017 at the earliest) energy companies need to know there will be a robust and reliable price for carbon so the economics of building new power plants under a cap and trade regime for polluters can be properly assessed. And then there’s the sheer cost of building the £5bn behemoths. “These investments will have to be done using private-sector balance sheets. I’m confident the balance sheets are there. EDF, RWE, E.on, these are all massive balance sheets, but they have choices. “They can afford to do it in the UK, but they don’t have to. That’s why the tax structure has to be right and the planning regime appropriate,” said Lambert. Not everyone is so sure. Over at Ofgem, Buchanan’s [Alistair Buchanan, chief executive of Ofgem, the UK’s energy regulator] analysis leads him to raise questions. “It looks like Angela Merkel will win the German election in September and she may take Germany nuclear. Italy is saying 2018, we’re saying 2017. Britain has been working on the assumption that all the capital will come to the UK. But all the companies have balance-sheet issues.” If that’s true, then the obvious next step will be for the Government here to offer generous subsidies to support the nuclear build, even for Labour’s less ambitious nuclear programme compared to the CBI’s. The extraordinary land prices that the sites of future nuclear power stations are commanding suggest the industry believes subsidies are inevitable. The Government won’t be drawn on the issue, but does at least recognise the threat to our security of energy supply. Malcolm Wicks, Gordon Brown’s international energy specialist, is soon to publish a report on the topic.”

“UK urged to triple nuclear power : Ecologist : 5th August, 2009 : Former Minister’s call to triple the contribution of nuclear power in UK dismissed as scare tactics : Gordon Brown has been told to triple the contribution of nuclear to electricity generation to prevent an over-reliance on imported oil and gas supplies. A report by former energy minister Malcolm Wicks recommended that nuclear power should provide 35-40 per cent of the UK’s electricity needs after 2030. Its contribution has halved since the 1990s and now provides around 12.5 per cent of the UK’s electricity demand. Mr Wicks said the UK was becoming increasingly reliant on imports, particularly oil and gas, to meet its energy demands. ‘Nuclear power is a proven, large-scale, low-carbon way to generate electricity,’ said Wicks. ‘To enhance energy security and reduce our reliance on imports, a range between, say, 35-40 per cent of electricity from nuclear could be a sensible aspiration beyond 2030.’…Liberal Democrat Shadow Energy and Climate Change Secretary Simon Hughes said the report was an attempt to scare the British public into accepting new nuclear power stations. “Energy security does not have to mean capitulation to massive nuclear subsidies. Britain needs a massive expansion of renewable energy that builds on the advantage of our natural resources.”

“Tories warn on nuclear power plans : By Ed Crooks, Energy Editor : Published: August 6 2009 03:00 : Proposals to double the proportion of electricity generated by nuclear power have been criticised by the Conservative party, which warned they could open the door for government subsidies for new reactors. A report on energy security commissioned by the prime minister and published yesterday argued for an “aspiration” that nuclear power would provide 35-40 per cent of Britain’s electricity after 2030, up from 12-15 per cent today…”

“From The Times : August 10, 2009 : EDF power price curb could hit UK nuclear reactor plans : Robin Pagnamenta, Energy Editor : Nuclear reactors that are essential for Britain’s future energy needs are in jeopardy, according to analysts, because EDF will not be able to afford to build them. Pierre Gadonneix, chief executive of EDF, wants electricity prices to be increased by 20 per cent over three to four years to fund investments. Last week, however, the French Government proposed a 2.3 per cent average increase in electricity prices on regulated tariffs over the next three years. EDF’s four proposed British nuclear reactors, including Hinkley Point, Somerset, where work is due to start in 2013, could become casualties of the decision. Peter Wirtz, European utilities analyst at West LB in Frankfurt, said: “If EDF cannot finance its investment programme they will have to think about cutting back some of their plans.””

Vincent de Rivaz has certainly changed his tune over the last year or so, almost certainly to do with announcements from the French Government, since they subsidise his industry.

So if he can’t rely on French state support, can he get his hands into the British purse ? It looks like the back room deals are carrying on :-

“From The Sunday Times : August 16, 2009 : Energy firms in secret talks on nuclear ‘levy’ : Danny Fortson : Taxpayers may be forced to subsidise Britain’s nuclear renaissance through a levy tacked on to household fuel bills under plans being developed by the energy industry. Utility executives have told ministers that their pledge not to use public aid to fund the the £40 billion rollout of new nuclear power stations is no longer realistic. The levy is one of several proposals tabled. Talks about how to structure an aid mechanism are at an early stage, but there is a consensus in the industry that without help the new power plants will not be built. Seeking help from the public would be embarrassing for the government, which had made a virtue of the fact that this key part of its power strategy would be funded by the private sector. An energy department spokesman reiterated that position this weekend, saying: “It is for energy companies to fund, build and develop these, not the taxpayer.” Industry sources said, however, that talks had begun on how to devise “a subsidy by another name” that would allow the government to stand by its promise of no direct taxpayer support.…”

We don’t really know what money is going to be spent, when or where . The proposals for “levelising” the costs of Low Carbon energy investment have been shunted to the Climate Change Committee for review and recommendation later in the year…

“From The Sunday Times : July 12, 2009 : Fresh blueprint for the low carbon economy : Tricia Holly Davis : MINISTERS will this week make their third attempt in five years to map out a low-carbon future for the UK by publishing detailed proposals to cut greenhouse gas emissions. The low carbon transition plan will outline how the country will meet the legally binding limits on emissions set in the Climate Change Act 2008. The target is a 34% carbon reduction by 2020…This week’s plan will be followed by an energy bill, which will be included in the next Queen’s speech. David Kennedy, who heads the CCC, said a separate plan to boost investment in clean coal and nuclear power would follow next year. The CCC will submit a report to parliament in October outlining a number of additional “low carbon funding options”. These will include a carbon tax on power generation, which would exempt nuclear and renewable energy; a low carbon obligation scheme, akin to the renewables obligation, which would include nuclear and clean coal; and a guaranteed government tender for low carbon power generation to provide security of demand and entice investors. The government is obligated to respond to the CCC report early next year…”

Plus, nothing’s happening until the GDA gets done by 2011. What’s a GDA ? :-

“Security is part of a ‘significant challenge’ to UK’s energy programme : An overdue risk assessment of a 9/11-style attack on a British nuclear power plant is just one of a string of issues that could delay vital investment in the country’s energy infrastructure. By Damian Reece : 16 Aug 2009 : Bad-tempered meetings between Health and Safety staff and nuclear industry executives are also to blame for slow progress in the new nuclear build programme, the agency has admitted in its own report. The HSE (Health and Safety Executive) is undertaking a “general design assessment” (GDA) of the two proposed designs for new nuclear power stations in the UK which are at the heart of the Government’s plans to reduce carbon emissions while improving our security of energy supply. Completing the GDA assessment by its June 2011 deadline is seen as a crucial first step if a fleet of new nuclear power stations are to be
ready as hoped by 2017. However, the GDA deadline is described as a “significant challenge” by the project’s leader in the latest progress report posted on the HSE website. Both designs, one by Areva, the French company, and one by the Japanese-owned Westinghouse, are still awaiting vital information from both the US and French security services relating to terrorist attacks using aircraft. The information is being delayed by security clearance procedures. A key analysis and assessment phase is late starting as a result. But a meeting between UK inspectors and American executives from the US-based Westinghouse to discuss “human factors” relating to the power stations, including design of a control room, was also highlighted. “Our assessment has not made good progress due to an initial lack of NII [Nuclear Installations Inspectorate] nuclear regulatory resources and where a very recent meeting with Westinghouse has clarified less than we had hoped for.” Concerns over the Areva design’s control and instrumentation systems, which are supposed to separate a station’s safety systems from its operational systems, were highlighted in April. But a number of other issues have now been highlighted by the HSE in its most recent report relating to information for the Westinghouse design…”

By the way : what’s happening in the Rest of the World ?

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