The costs of nuclear energy just keep on rising. If we could, we would stop this madness. In 2008, Nuclear power, in its second lease of life, is once again proving a massively expensive, ongoing liability for virtually all involved. In America, Westinghouse is filing for bankruptcy after a series of cost and timeline over-runs which have come to threaten the financial viability of the Japanese parent company itself. In Britain, the costs of Hinkley Point have escalated from an initially anticipated £5.6bn back in 2008 to £24.5bn at the last estimate. An internal assessment last year by the Department of Energy and Climate Change was more startling still, putting the total lifetime costs at closer to £37bn. EDF, the prime contractor and operator, originally estimated that the plant would generate electricity at £45 per megawatt hour. In the event, the UK Government has had to agree a “strike price” of a ruinous £92.50, or more than double the current wholesale price for electricity, inflation proofed and guaranteed for 35 years. And that’s just the half of it; events this week have demonstrated that it is perhaps the back end costs of decommissioning, clean-up and disposal of spent fuel we should be worrying about most. In an out of court settlement, the Government has agreed to pay £100m to two contractors “cheated” out of a £6.1 billion contract from the Nuclear Decommissioning Authority (NDA) to close and clean up 12 redundant nuclear power plants. The circumstances of the case bear some repeating. Contractors were required to meet a series of minimum threshold scores in order to qualify for the tender. When Cavendish Fluor Partnership (CFP), a joint venture between Babcock International and the US company Fluor, failed these tests, it should by rights have been automatically disqualified, but instead, the required scores were adjusted down so as to bring the company back into the process. It’s still not entirely clear why, but it is reasonable to speculate that price must have played a part. It now transpires that the initial contract all along hopelessly underestimated the scope and costs of the work that had to be undertaken, so that even the Babcock partnership that won the tender ended up a victim of the process. Back in 2005, the UK’s nuclear decommissioning costs were estimated at £55.8 billion; by 2008, this had risen to £73.6 billion, and by 2015 it had reached an eye-watering £117.4 billion. It is a fair bet that as more becomes known about the costs and risks of decommissioning, even this latest number will prove woefully short. Hinkley C’s operators are at least required to set aside the funds for eventual decommissioning, but only up to an agreed limit. The taxpayer is on the hook for the all too predictable shortfall. In committing to new nuclear, we seem to have joined a runaway train, with no hope of getting off. Has not the time finally arrived for a fully fledged rethink of the merits of Britain’s nuclear energy strategy?
Telegraph 28th March 2017 read more »