French nuclear cock-ups: not coming soon to a reactor near you

The collapse of the EdF takeover of British Energy is the right decision for the wrong reasons.

The private shareholders in British Energy, Invesco and M&G Investments who own 22%, greedily holding out for a higher share price, have shocked the pro-nuclear, pro-business BERR with their decision to reject EdF's £12 billion offer. The French state-owned EdF wasn't too pleased either. That sort of thing wouldn't happen in France.

The government sold all but 35% of its stake in British Energy last year. They probably rue the day now because they would love to have the £4bn in the Treasury coffers and the nuclear newbuild to go ahead. Conservative MP Peter Luff said the collapse was not necessarily a bad thing - if it had gone through, EdF would have "owned over a quarter of all electricity generation in the UK and the competition effect would've been very serious." I quite agree.

Business Secretary John Hutton has put a brave face on it: "We thought it was a good deal and were ready to accept." Like a pathetic salesman he tried to tout the land still available for anybody who wants to build a new nuclear power station: "Our commitment to nuclear power is clear.... BE still has potential sites and sites are available from the Nuclear Decommissioning Authority."

Meanwhile, British Energy is not exactly performing well. It announced in July that its Heysham and Hartlepool reactors, currently off-line due to faults, will now cost at least twice as much to repair - over £100m. Its chairman confessed that "output from our nuclear stations last year was disappointing." No kidding. And they say windfarms don't deliver.

French nuclear headaches to be exported to Britain

For those who think that new nuclear power is not a solution to either high energy prices, energy security or climate change, the EdF/BE news was positive, especially in view of the scandal rocking the French nuclear industry at the moment.

On July 7, Areva accidentally poured at least 18 cubic meters of liquid containing at least 75 kilograms of uranium onto the ground and into the river at the Tricastin nuclear site, prompting local authorities to launch an official enquiry and local people to be banned from drinking their own water. Environment Minister Jean-Louis Borloo has ordered an overhaul of France's nuclear supervision as well as groundwater checks around all nuclear plants.

President Sarkozy is keen to export French nuclear know-how around the world. Since his election, he has signed cooperation agreements on civilian nuclear energy with Algeria, America, Jordan, Libya, Morocco, Tunisia, and the United Arab Emirates, among others.

France has 59 reactors supplying 80% of its electricity. The Tricastin site is a major part of the French nuclear industry, with over 5,000 employees and many sub-contracting companies. It includes the military research facility of Pierrelatte, the EDF power plant, a factory for converting natural uranium (Comurhex), and a uranium enrichment factory (Eurodiff). The latter two are subsidiaries of Areva, which wants to build new nuclear power stations in Britain.

In June a consortium led by Areva won a 17 year contract to clean up Sellafield, worth at least £50m a year. Malcolm Wicks said in a parliamentary answer just before the summer recess that the contract specified no limit on the risk to the taxpayer in the event of an accident like that at Tricastin.

The Nuclear Decommissioning Authority (NDA) has given Areva indemnity if there were to be an incident, provided that it is insured against the first £140m of the damage costs.

NDA slammed for management failure as clean-up costs rise

We could have funded two London Olympics just from the rises in the estimated costs of cleaning up our nuclear waste over the past two years. The estimate is now around £73bn, according to the Nuclear Decommissioning Authority (NDA).

An audit of the NDA, published also in July, says there are "inherent risks" in the way the body operates, pointing out that half of its income is dependent on unreliable sources such as fuel reprocessing at Sellafield's Thorp plant (closed since a leak was discovered in 2005). It also highlights management and accounting failures; simple things like not taking notes at minutes has led to budgetary confusion.

The audit is by the government's Select Committee on Business and Enterprise. The NDA is funded by Government funding and from commercial income. The commercial slice is "volatile and over time will decline as sites progressively close and move into the decommissioning phase," says the report. "The grant-in-aid portion of the NDA's income already represents a very sizeable proportion of BERR's annual budget - 42% of the original total Departmental Expenditure Limit (DEL) for the 2007-08 financial year."

The nuclear dilemma

It is said that your position on nuclear power comes down in part to your response to this dilemma: which is worse, the local damage caused by nuclear leaks and processed fuel lying around for 4.5 billion years (which Is the half life of depleted uranium), or the global catastrophes caused by runaway climate change?

However Britain doesn’t need to build major new power stations to keep the lights on and maintain security, according to a report just released by independent consultants Pöyry.

It says that if the UK government can meet its EU renewable energy targets and its own action plan to reduce demand through energy efficiency, then major new power stations (either coal, nuclear or gas) would not be needed to meet the country's electricity requirements up to at least 2020.