Dave Toke says it’s money not planning that has stopped nuclear power
Of all the nonsense about nuclear power that one hears, the idea that somehow it is planning problems rather than financial issues that stop its development surely takes the biscuit. The Government bats away any formal planning objection made to its nuclear plans when companies want to build them. Yet the UK government is flogging nuclear planning problems as a scapegoat for the technology’s failure for all it is worth. Is this a smokescreen to hide its problems with financing Sizewell C?
Wylfa
There was a silly story published in most leading newspapers about the proposed Wylfa plant in North Wales being knocked back in 2019 because of a harmful effect on the Welsh language. The reality was that the proposal was scrapped for financial reasons: the Government was unable to offer enough incentives to keep Hitachi interested in developing the project. In January 2019 the BBC reported that “Japanese tech giant Hitachi said it was suspending construction of the new plant in north Wales as the project’s cost continues to spiral”. The National Grid cancelled plans for pylons needed for the project.
The reporting at the time failed to mention any planning issues, only the financial ones. Indeed, once Hitachi announced its withdrawal, that was the effective end of the plans. However, the company set up to make the planning application continued what looks to me to be going through the motions. It didn’t matter that the Planning Inspector rejected the application. If the proposal was a real one (in an economic sense), the government would surely have overruled the Inspector without delay, as indeed happened in 2022 with the planning application for Sizewell C.
By contrast, the recent coverage of the planning objections to the Hitachi proposal seems to completely omit any mention of the real reason why the project was abandoned.
Hitachi originally bought the “Horizon” option from RWE and E.ON when they withdrew from the proposal in 2012. It included the proposed development at Wylfa and another at Oldbury in Gloucestershire. This consortium was one of three set up in 2009 to constitute the Government’s new nuclear programme, as announced by Ed Miliband in 2009 in his last manifestation as Energy Secretary.
The second consortium to fall apart, the so-called “NuGen” consortium, was supposed to build a new nuclear project at Sellafield called “Moorside”. This consortium was originally owned by the Spanish company Iberdrola and the French one GDF Suez (now Engie). However, they lost interest and the consortium was bought up by Toshiba in 2013. Then in 2017, Toshiba decided to “mothball” the project. Once again, financial considerations were cited as the reason for this and this had nothing to do with planning issues.
This left the third consortium led by EDF. They advanced their Hinkley C project. Eventually, they agreed the controversial deal whereby they would receive £92.50 per MWh over 35 years at 2012 prices, worth over £130 per MWh in today’s money. They also agreed on a contract for Sizewell C whereby if that went ahead as well both projects would receive £89.50 per MWh.
I knew at the time this was a bit of PR and that EDF would never go ahead with the agreement in respect of Sizewell C. Instead, they have agreed on a deal whereby, in effect, most of the costs, including the inevitable large overruns, will be paid by the British taxpayer or electricity consumer.
So, none of the privately owned companies originally involved in the British nuclear programme went ahead with the proposals. Centrica was also involved with the Hinkley C proposal at one stage, but it withdrew in 2013. Only the French-state-owned EDF has gone ahead with building a nuclear power plant: Hinkley C. EDF can carry on the construction despite the mounting construction cost overruns. The French state pays! In effect, the French taxpayer is paying for a British nuclear power plant in the shape of Hinkley C.
Sizewell C
The French have said that this cannot happen again (i.e. they paying most of the cost overruns for a British nuclear power station). Hence Sizewell C will be funded mostly by the British taxpayer and electricity consumer, with the Brits taking the main liabilities, not the French. The UK Government is currently arguing internally and with EDF about how much Treasury funding the Government is going to put into the project. There has been a charade of looking for private investors. The only way private investment could be achieved would be for the investors to be effectively guaranteed their profits at the taxpayers’ or energy consumers’ expense.