Government mustn't sign up to 'crazy proposals' leaving the taxpayer facing unlimited risk over nuclear incidents
Shadow SNP Spokesperson for Energy, Alan Brown MP, writes ahead of his Westminster Hall debate on 'Taxpayer liability for safety at the Wylfa Nuclear power project'.
The nuclear industry in the UK, whilst keeping the lights on for decades has come at a price. The legacy of contamination and clean-up is estimated by the National Audit Office to come in at £121bn by completion in 2020. The Magnox swarf storage silo contains waste sludge which is corrosive and radioactive and deemed a hazard until 2050 and there are a number of existing nuclear power stations still to be decommissioned.
Yet we are told by the UK Government that we need more nuclear as a low carbon means of energy generation. While the process may indeed be low carbon, it is anything but green given the toxic legacy. Why do we want to commission more at exorbitant costs? With regards the cliché “we need the baseload,” as far back as 2015, the chief executive of National Grid argued that the baseload concept was outdated. The only other reasoning I can see is the equally outdated concept of the UK being a world leader in a particular sector.
I have my own bias of course, but I would suggest the UK may be the world leader in bad nuclear deals. A 35 year agreement for Hinkley Point C at £92.50/MWh, when offshore wind recently came in at £57.50 for a 15 year tenure. The Hinkley deal so bad it was criticised by the NAO as bad value for money. Part of the problem with Hinkley was the risk and the financial exposure to private investors. A risk allayed with the fact the technology for the European Pressure Reactor (EPR) has still to be proven, with all existing EPR projects under construction facing delays.
As investment in nuclear around the world falls, the UK has ten stations on the go in terms of planning. Yet, the National Infrastructure Commission’s latest report states that they believe there should be a maximum of just one new nuclear contract signed before 2025. This is because of the reduced costs of renewables and the other emerging technologies including the massive decrease in cost of batteries. Their report also illustrates that over the years the cost of nuclear has not decreased, debunking another UK Government aspiration.
This backdrop brings us directly to Wylfa. Direct information from the Government remains difficult due to the claims of “commercial confidentiality”. However, again it is clear that the private developer, Hitachi, has had difficulties with the costs and risks associated with the project. This has led to the suggestion of the Government taking a £5bn direct stake in the project. In principle for key infrastructure projects, a direct Government stake makes sense as it can borrow cheaper than the private sector. However, this seems to be part of another wider blank cheque type agreement for a Government desperate to get the project over the finishing line. When strike rate figures of £77.50/MWh are quoted for Wyfla, then this stake is one reason for the reduction.
Under the Paris and Brussels conventions, a nuclear operator has the liability for any nuclear incidents. Even so, there is a cap at £1.2bn euros, so way below the true cost of a catastrophic incident. Hitachi has already had two serious safety breaches in other nuclear developments, and for one was fined $2.7million from the US Government. Apparently learning from this, Hitachi are resisting taking on liability for nuclear incidents. We do not know exactly what they are proposing, but it marks a departure from current agreements and the “polluter pays” principle. It is critical that the UK Government does not sign up to any such crazy proposals. The cost legacy is bad enough; we still don’t have a solution to long term disposal of nuclear waste and it is folly to sign a deal for the taxpayer to take unlimited risk on a nuclear incident. This could prove to be the worst deal yet unless the Government changes tact soon.
Alan Brown is the SNP Spokesperson for Energy and the MP for Kilmarnock and Loudoun
PoliticsHome member the Nuclear Industry Asscociation has responded to this article:
“It is incorrect to say the European Pressure Reactor (EPR) is unproven, when in reality the development in Taishan reached criticality in June this year. In addition, the industry has a long-term waste disposal solution, with BEIS and the NDA making rapid progress on planning for the Geological Disposal Facility. All new nuclear sites are obligated to make provision for their eventual decommissioning.
The full comment is available here.
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