Nuclear going (for) broke?

The official line is that nuclear power, based on new technology like the European Pressurised-water Reactor (EPR), can be an economic energy option and does not need subsidies. However, this is beginning to look a little frayed given that the first two EPRs, being built in Finland and France, are both behind schedule and over budget.

Olkiluoto 3 in Finland, now over three years behind schedule, was originally budgeted at €3bn, but is now expected to cost at least €4.5bn. The follow-up French EPR at Flamanville is around nine months behind schedule, with the cost of power now being expected to be around 20% more than planned- around 55 euros a megawatt hour, instead of the 46 euros announced when the project was launched in May 2006.

Meanwhile, South African power company Eskom has decided not to press ahead with a planned nuclear build programme, with an EPR being one option, saying the costs were too high .

In the UK, most of the running is being made by the French company EDF ,who have talked of building possibly 4 new plants here. In July 10 2006 Vincent de Rivaz, chief executive of the UK subsidiary of EDF, told the Times “Nuclear does not require any form of subsidy. We are investors in waiting but we are not waiting for subsidy,” a view he confirmed in a talk to the Parliamentary Group on Energy on 4th March 2008. The government has said similar things- it would not provide subsidies. But on May 26 2009 Vincent de Rivaz told the Financial Times that a "level playing field" had to be created that would allow the nuclear industry to compete with other low-emissions electricity sources such as wind power. He said "We have a final investment decision to make in 2011 and, for that decision to give the go-ahead, the conditions need to be right," adding that "We will not deliver decarbonised electricity without the right signal from carbon prices."

He suggested that the government needed to put a floor under the price of carbon permits in the EU's emissions trading scheme. That could mean that, if the price of carbon drops, as is has done recently ( it fell to €8.2, from €31 last summer), the taxpayer would have to step in. Although that would only be an indirect subsidy (raising the cost of fossil rivals), the FT interpreted EDFs new line as meaning ‘New nuclear power stations will not be built in Britain unless the government provides financial support for the industry’.

Unsurprisingly anti- nuclear groups were horrified. Communities Against Nuclear Expansion (CANE), based in Suffolk, called on the government to resist requests for greater subsidies and to stick by their policy of only allowing new nuclear power stations to be built if the full cost of generation, including decommissioning and a fair share of the cost of waste disposal, is borne by the industry. It noted that ‘In spite of this policy, the government has already agreed to subsidise the industry by covering their liability in the case of a serious accident and by its policy of taking over responsibility for nuclear waste fifty years after it is transferred to the government, even though the waste will need to be managed for several thousand years. In addition the government has agreed to bribe communities by giving incentives to house long-term nuclear waste storage facilities said to be in the region of £3 to £6 billion. This violates a long-standing principle in the UK that the polluter should pay for the results of his activities. The British public have been asked to pay for the clearing up the mess made by the last generation of nuclear power, at a cost of untold billions of pounds. Now we are being asked to pay for the industry to create even more.”

However they may yet get stopped in their tracks- or at least slowed down. A group of leading UK academics, members of the Nuclear Consultation Group (NCG) have challenged the legitimacy of the nuclear ‘justification’ process- a currently underway preliminary review process that is required by the EU as a high-level assessment to ensure the benefits of new-build nuclear stations outweigh potential detriments. The academics have written to the Department for Energy and Climate Change (DECC) calling for a public inquiry to open this process up- an option that is allowed in the arrangements. The Government guidance states that ‘where the Justifying Authority considers that any application is of sufficient importance and wide public interest, they may cause a public hearing or other inquiry to be held. It is expected that inquiries under the regulations would only be held in relation to major or contentious classes or types of practice.’

Well that seems to be exactly what the new nuclear programme, with new types of plant, adds up to. And as the NCG note ‘Justification is regarded as a conclusive process thereby precluding further debate on substantive issues at the planning stage’, so it’s the last chance to have any real say. But, in the end, it comes down to a decision by the Secretary of State, Ed Miliband, who as Justifying Authority, acts as both judge and jury. And it’s doubtful if he, or the government, will want to open it all up to public debate again, unless forced to.