Pressure is mounting on the UK’s new Conservative government to rescue its nuclear programme through an electricity tax, to throw a lifeline to the ailing French nuclear giant EDF, which wants to build more huge reactors in southern England despite its fragile financial plight. The UK government has been consulting on what amounts to a proposed nuclear tax, which would require every electricity consumer to pay a levy of up to £50 a year on their bills while the new plants are being built, saving the beleaguered French company from having to finance the project itself. Boris Johnson, the British prime minister, will need to weigh the disadvantages of abandoning plans to build the new reactors against the effect the new tax would have on the electoral backing of his new Conservative supporters. Many of those who voted for him in last month’s general election swept him to power by switching support from their traditional choice, the opposition Labour Party. EDF is very keen to get an early open-ended financial commitment to fund its new station, Sizewell C on Britain’s east coast. That is planned to contain two 1,640 megawatt European Pressurised Water reactors. Critics say the longer the decision is delayed, the clearer it becomes that the reactors are too expensive and also unnecessary. With renewables, particularly wind and solar, now cheap and popular, and nuclear stations always late and over budget, EDF is believed to be nervous that its own political support is ebbing away. The electoral risks for Johnson are clear. The US version of the nuclear tax the British are proposing, called Early Cost Recovery, had American electricity customers paying up front for a nuclear station, the V.C. Summer plant in South Carolina. But consumers were left with a $10 billion (£7.7bn) debt for cancelled nuclear plants, and another $13.5bn (£10.4bn) in cost over-runs, with no reactors coming online. And the chances of Sizewell C being cancelled are high, even if its costs are guaranteed. If a paper, Financing the Hinkley Point C project, just published, is correct, EDF is already in deep financial trouble. According to its author, Steve Thomas, emeritus professor of energy policy at the University of Greenwich in London, it is impossible for EDF to finance the completion of its Hinkley Point C station in the West of England unless the UK government finds a way to pay the capital cost. “The prime minister is reputed to have a fondness for elephants – especially if they’re white. EDF is pressing him hard to support another white elephant – a new nuclear power station at Sizewell” The paper says the twin reactor power station under construction there is draining EDF’s finances so severely that it will not be able to pay the construction costs (approximately £11bn) it has yet to find. Professor Thomas says EDF is facing financial collapse because of the priority it must give to expensive uprating of most of its 58 reactors in France in order to keep them running safely. As a result, if Hinkley Point is to be completed, it needs an open-ended financial commitment of both British and French public money. His report says: “The sensible course is to abandon the plant now before more public money is wasted.” Despite the fact that, as the report says, EDF is currently £37.4bn in debt without including many of its nuclear liabilities, it is still officially pressing ahead with plans not only to complete Hinkley Point C by 2025 but also to start Sizewell C construction in two years’ time. This now seems dependent on Boris Johnson getting the British consumer to pay for it in advance.
Climate News Network 21st Jan 2020 read more »
At present (October 2019), the proposed 3.2 GW nuclear plant at Hinkley Point C (HPC) in Somerset is in its early construction stages. EDF is pressing ahead, apparently in the hope of persuading politicians not to abandon a partly completed project. However the HPC project is highly controversial and its completion remains in doubt for political, financial and technical reasons. HPC could be cancelled by French/UK Governments; HPC could be cancelled by EDF; Severe technical problems exist at the identical nuclear plant under construction at Flamanville in France; Brexit problems exist in its construction; Apart from the many objections to nuclear power in general (high costs, dangerous nature, radioactive emissions, weapons proliferation, nuclear waste, and poor carbon reduction), additional objections apply specifically to Hinkley Point C. Recent large construction cost increases and delays
Future electricity bills would be increased by an extra ~ £50 billion; Abandoning HPC would cost taxpayers much less than that Construction at HPC is still at an early stage and could be cancelled, and Abandoning Hinkley would not leave an energy “gap” In sum, while it is annoying that money would have been wasted by EDF on HPC, that is no reason to continue with a facility that will cost consumers far more than the cost of abandoning it. This report concludes that the current Government’s policy of allowing HPC’s construction to continue has more to do with avoiding loss of face than with any technical or financial merits. Instead sound arguments exist for it to be cancelled and the sooner the better.
Ian Fairlie 19th Jan 2020 read more »