Opinion: ‘Brutus’ Osborne and his nuclear madhouse

A guaranteed price for the electricity generated at the power station is expected to be around £15 per megawatt hour less than the £92.50so-called strike price awarded to EDF for the Hinkley Point C nuclear power station being built in Somerset.
Computer generated image of the planned Hinkley Point C nuclear power plant
Opinion by Energy Voice

It is years since I commented about nuclear power in the UK, though we have carried stories from time to time.

However, I am so angered by the £2billion government guarantee offered to the Chinese as an inducement to get behind the intended £24.5billion Hinkley C nuke station project that I am compelled to write this.

Indeed, I am incandescent that chancellor George “Brutus” Osborne and the Treasury should court Beijing and apparently get away with it. This should never have been allowed.

I don’t like nuclear, I never will. I don’t trust the Chinese “machine”. I never will.

But if we’re going to have nuclear complete with its artificially contrived “madhouse” economics and suspiciously dumbed down carbon footprint, then let it at least be European.

Leaving aside nationalism and all that flag-waving stuff, if the yet-to-be fully approved Hinkley C build gets out of control . . . and it will . . . trying to hold a faceless, inscrutable Chinese corporation to account for the inevitable colossal overrun will be utterly impossible.

Heaven knows it would be hard enough nailing British or other EU contractors.

There are two EPR (European pressurised reactor) projects under way at present. They are Flamvanville in France and Olkiluoto in Finland. Both are staggeringly over budget, very late and beset by chronic engineering problems. Guess who will ultimately pay? Finnish and French taxpayers of course.

In the US, two proposed new Toshiba-Westinghouse AP1000 reactors – Vogtle Units 3 & 4 – that Georgia Power is building are years behind schedule, and billions of dollars over budget. Some $8.3billion in federal nuclear loan guarantees, awarded by the Obama administration at no cost to the nuclear utilities, would leave taxpayers holding the bag if the project defaults on its loan repayment.

In case the Hinkley C news passed you by, the Osborne inducement is intended to “pave the way for a final investment decision by energy company EDF, supported by China General Nuclear Corporation and China National Nuclear Corporation, later this year, and with further amounts potentially available in the longer-term.”

Osborne claimed too that “Nuclear power is cost competitive with other low carbon technology and is a crucial part of our energy mix, along with new sources of power such as shale gas”, and that there would be guarantees of some sort.

In a press statement, the Treasury was vague regarding when said guarantees would be issued. And it failed to state the specific risks that would be guaranteed against – that is, the exact circumstances in which taxpayers would become liable for whichever company’s losses.

I understand that various journalists tried and failed to extract clarity from the Treasury.

The respected journal, The Ecologist, was stonewalled totally. Among other things, it wanted to challenge the Treasury regarding its claim that nuclear power is competitive.

The International Renewable Energy Agency has determined that the cost of onshore wind in the UK is well under £80 per MWh even after all the costs of managing intermittency are included.

In addition, onshore wind and ground-based solar projects have bid and been awarded UK government contracts at a price of around £80 per MWh – with no government guarantees at all.

Early last month, Osborne claimed that nuclear power was the cheapest form of low-carbon generation available – cheaper even than onshore wind.

He laid the bare-faced claim as he appeared in front of the House of Lords economic affairs committee in its “annual evidence session”, asserting that the agreed “strike price” of £92.50 per MWh (in 2013 money) is “substantially cheaper than other low-carbon technology like offshore wind or onshore wind”.

Osborne misled the committee by suggesting the UK taxpayer won’t bear any of the risk should the EPR reactor design planned by EDF for Hinkley C not work. Of course the taxpayer will be left to pick up the pieces and humungous bill, and long after Osborne has taken up residency in the Lords.

Don’t forget, the agreement between the UK government and EDF includes a total of £17billion of construction finance guarantees – of which the China-related £2billion is merely a first instalment.

There’s something else wrong about the Osborne/Treasury claims. The latter said in its press release: “The new plant is expected to produce enough energy to supply 7% of the country’s needs, powering around six million homes.”

WRONG!

Hinkley C may supply up to 2% of UK energy needs, NOT, 7%. The 7% is power generation only. That is a fundamental and dangerously stupid mistake to have made.

What do I mean by madhouse economics?

I challenge all of you to go find an honest costing of nuclear. What do I mean by that?

Assuming it gets built at all, at a push, Hinkley C might last for 60 years. Then it will be shut down and go through seemingly endless decommissioning. It will become a nuclear coffin for maybe a century. Long after the station itself has been dismantled, there will be the issue of radioactive waste storage for generations to come.

That’s what I mean by madhouse economics. We’ve been lied to for decades and we’re still being lied to about the real cost of nuclear.

Britain’s bill for decommissioning and waste disposal is currently claimed to be £110billion over the next 100 years, double the £50billion or so estimate made 10 years ago. Ten years hence and I bet it will be more like £220billion.

The International Energy Agency (IEA) said late last year that almost 200 of the 434 reactors in operation around the globe would be retired by 2040, and estimated the cost of decommissioning them at more than $100billion.

Pardon? Excuse me? How can the global figure be less than the UK estimate on its own?

I’ll leave you all to ponder that one. Meanwhile, various respected media have told the IEA to go do its sums again.

In 1985, Forbes Magazine stated; “The failure of the US nuclear power programme ranks as the largest managerial disaster in business history, a disaster on a monumental scale”.

Perhaps in a bunch of years, Private Eye will write our epitaph: “The failure of the UK nuclear power programme ranks as the largest political and corporate con trick in British history, a disaster on a monumental scale”.

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