Tuesday, March 13, 2012

British consumers will pay dearly for French nuclear power, say environmental leaders

Flamanville-C in France, being built by EDF and Areva: over budget and overdue.
Flamanville-C in France, being built by EDF and Areva: over budget and overdue.
Today, four of the UK’s leading environmentalists have warned that the Government is about to hand over control of Britain’s future energy and climate security to the French government, leaving British taxpayers to pick up the bill.

Their claims are made in a letter and note sent to David Cameron, Nick Clegg, George Osborne, Edward Davey, Secretary of State for Energy and Climate Change, Vince Cable, the Business Secretary and Sir Jeremy Heywood, Cabinet Secretary.

The letter is signed by:
  • Jonathon Porritt, former chair of the Sustainable Development Commission and founder director of Forum for the Future
  • Tony Juniper, environmental advisor, campaigner and writer
  • Charles Secrett, co-founder of The Robertsbridge Group
  • Tom Burke, founder director of E3G.
Mr Cameron recently made an agreement with French President Nicolas Sarkozy to boost nuclear co-operation.

However, "our analysis shows that building new nukes will be a massive rip-off for the the British taxpayer," said Mr Secrett.

The letter-writers say the French will only build new nuclear reactors in the UK if the financial risks involved are transferred from France to British households and businesses – leaving UK taxpayers to pick up the bill to protect the French nuclear industry.

This is because without a strong price for carbon, which is not on the horizon unless the Treasury sets a high carbon price floor, and which British consumers will end up subsidising, new nuclear power's figures don't stack up.

Should the French subsequently decide not to proceed, the UK would be faced with a humiliating policy melt-down.

″This is an invitation to EDF to bargain very aggressively for an agreement that transfers the lion’s share of the financial risk of new nuclear to British taxpayers and consumers. EDF will have us over a barrel,″ they say.

They also claim that the nuclear plans proposed by the Department for Energy and Climate Change (DECC) and EDF, and approved by the Office for Nuclear Regulation, are based on a type of reactor that France has been advised to abandon.

EDF intends to construct four European Pressurised Reactors (EPRs) at Hinkley and Sizewell, yet the French National Audit Office has recommended abandonment of the EPR as too complex and expensive.

On his blog, Tom Burke writes: "The French National Audit Office recently recommended dropping the EPR as too expensive. This repeated a recommendation made to Sarkozy two years ago by the former head of EDF, Francois Roussely, who saw no future for it.

"In any case, the decision to extend the life of EDF’s existing fleet of reactors in France will put huge pressure on its capital budget over the next decade."

The construction of two EPRs in Finland and France under construction by Areva (designers of the European Pressurised Reactor) has been beset by problems: both are already four years late and costs are running twice as high as originally projected.

The four previous reactors they built took an average of 17.5 years from the start of construction to the delivery of the first electricity.

There is also a growing risk that Centrica (a British energy company with an option to take 20% of the new build at Hinkley and Sizewell) will not take up its 20% option leaving two French companies, Areva and EDF, as the primary beneficiaries of large subsidies from Britain’s householders and businesses.

Tom Burke said, “It is shocking that the government is willing to turn over control of our energy and climate security to France in pursuit of a nuclear mirage.

"British householders and businesses will be compelled to pay for a French nuclear loser. To do so we will turn an admired liberal electricity market back into the centrally planned nightmare that Mrs Thatcher rescued us from.”

Electricity Market Reform

Commenting on the letter, Jonathon Porritt said, “The fixation of the current political establishment with nuclear power beggars belief. The entire energy system in the UK is about to be rigged in order to support nuclear power, through the Electricity Market Reform, at great cost to UK consumers, UK businesses and the long-term interests of the entire nation.

"Given its historical opposition to nuclear power, the LibDems should be feeling particularly uncomfortable at the analysis surfaced in our note to the Prime Minister – and the Coalition Government’s continuing pledge that any new nuclear programme will not get any additional public subsidy is now palpably dishonest.”

Continuing with the present policy will seriously distort our electricity market for decades to come, reduce the competitiveness of British businesses, add to fuel poverty, and suppress innovation and investment in industries where Britain has real competitive advantage, they say.

Tony Juniper added, “Ministers have been well and truly led up the garden path by the nuclear lobby. Our analysis of nuclear energy provides a timely reminder as to the danger posed by campaigns against sustainable energy sources, such as wind power.

"If the not-in-my-backyard anti-anything-anywhere brigade prevail, and nuclear becomes the default option, then that could cost us a great deal of money. The Prime Minister needs to step in and make sure that energy policy is truly working in the public interest, rather than to the agenda of a massive vested interest.”

Charles Secrett concluded, "How on earth can the Prime Minister justify paying billions of pounds of subsidy to French power companies when the Chancellor is slashing welfare budgets for poor people in Britain and there are a million young people unemployed?"

EDF is 85% owned by the French state. It has been the most committed supporter of new nuclear build in Britain. Preparatory site clearance will begin shortly at its Hinkley Point C site. However, until EDF orders the major reactor components there is no guarantee that they will actually proceed to construction.

Environmentalists who support nuclear power argue that it is necessary to combat climate change. The letter writers plan to counter these arguments with a series of briefings to the Prime Minister over the next six weeks, covering:
  1. Market reform
  2. Investor issues
  3. Energy industry issues
  4. Wider economic issues
  5. Sustainability issues
  6. Political issues.
They argue that viable options are available to meet our energy and climate security needs at much lower economic and political risk and will create predominantly British jobs and growth.

The letter is fully supported by Friends of the Earth, whose executive director Andy Atkins said: "This report is spot on – Britain must meet its energy needs while keeping to its legally-binding climate targets, but gambling on a massive nuclear building programme to achieve it is far too risky.

"Investing in clean British energy by developing the UK’s huge wind, wave and solar potential and slashing energy waste will keep the lights on and create thousands of new jobs."

No comments: