This week the British Chancellor of the Exchequer, George Osborne, is in China. Despite the economic woes facing that country he still thinks it is possible to obtain further inward investment into the UK and he goes carrying a £2 billion sweetener: a guarantee underwritten by public funds for investment in a new nuclear power station, Hinkley Point C in Somerset, England.
This will also make the project more attractive for the French energy company Électricité de France (EDF) that, in partnership with Areva, would build the plant. Osborne is hoping to do a deal with the China General Nuclear Corporation and China National Nuclear Corporation.
China is building half of the 60 new nuclear power stations being constructed in the world. Its expertise would be invaluable were the project ever to go ahead.
That is still very much in doubt.
While Vincent de Rivaz, chief executive of EDF Energy, welcomed the announcement of the infrastructure guarantee as a “clear sign” of the government’s commitment to Hinkley Point C, everybody but the UK government has doubts.
This even applies to leading environmentalists George Monbiot, Mark Lynas and Chris Goodall, who had previously argued the case for nuclear power, earning the wrath of many colleagues in the green movement. They have now committed another U-turn and are saying that because the project will be so expensive and so late in delivery, it is better to spend the estimated £24.5 billion (AU$53.36 billion) investment on other low-carbon technologies.
Greenpeace UK’s chief scientist, Dr Doug Parr, issued a statement calling the announcement “a PR smokescreen to give the impression that this project is moving forward when it’s actually bogged down in a swamp of troubles”.
“Hinkley hasn’t got funding or safety clearance, and everyone outside the nuclear industry and our blinkered government thinks it’s absurd, yet the Chancellor is ignoring them all to plough ahead with this overpriced, overrated and overtime project,” Dr Parr said.
The proposals have passed all the regulatory hurdles so far set by the Office for Nuclear Regulation.
Amber Rudd, the Secretary of State for the Department of Energy and Climate Change (or should that be Nuclear Waste? See last week’s story) went on the radio to make the point that since the future has to be low carbon and nuclear power provides that reliably, although expensive the plant is worth the money.
Part of the problem is that the government is backing the wrong technology.
European Pressurised Reactor delays and costs
Hinkley Point C is a European Pressurised Reactor. There are no completed examples of this model and the four under construction have suffered huge delays and cost overruns:
|Name||Start of work||Original completion date||Currently expected completion date||Initial cost||Current estimated cost||Budget over-run|
|Olkiluoto 3 in Finland||2005||2009||2018||€3.7bn||€8.5bn||230%*|
|Flamanville 3 in France||2007||2013||End 2018||€3.3bn||€10.5bn||318%|
|Taishan 1 in China||2009||2013||2016||€7bn||unknown|
|Taishan 2 in China||2010||2014||2016||€7bn||unknown|
* Since Areva guaranteed a price at the start of €3 billion and is now locked in legal dispute with operator TVO, the actual costs to both companies are secret and likely to be above €8.5bn if we consider that the plant was the first of its kind to be attempted and the extent of the budget overrun for Flamanville 3.
How this compares to Hinkley C: Hinkley C was granted planning permission in 2013. The estimated cost has risen from €7.71bn to €33.75 billion in 2015 – over three times the final estimated cost of Flamanville 3.
Originally planned to start generating electricity by the end of 2017 it looks likely as though, if it ever does start generating, it will be after 2024.
An investigation into Hinkley Point C by HSBC bank saw “ample reason for the UK Government to delay or cancel the project”. Austria has launched a legal challenge to the European Commission’s ruling that the guaranteed price for the new Hinkley reactors amounts to legal state aid and the case is expected to last over two years.
But none of this seems to bother the British government.
It is significant that France itself does not plan to build another EPR, but it is quite happy to build them elsewhere, and this is why it welcomes Osborne’s announcement of the investment guarantee: EPRs are built by two French state-owned companies, Areva and EDF.
The French government owns 86.52 per cent of Areva and needs foreign cash to bail out the company, which is in deep financial trouble; it posted a €4.8 billion loss for 2014. A rescue plan is under consideration, which may include some form of bailout from EDF, itself owned 85 per cent by the state.
Part of the rationale of the Blair Labour government, which began the Hinkley C project, was that it should replace coal and other power stations that will be ending their life in the next two years in the UK. This rationale no longer holds water.
What’s a better design for a modern nuclear power plant than the EPR? Well, a Japanese company, Hitachi, is interested in building a new nuclear power station of a different type on an island off the north-west coast of Wales in the UK: Anglesey. A previous old nuclear power station on the site is being decommissioned. The new plant would be an Advanced Boiling Water Reactor: ABWR, said to be safer and cheaper.
Even so, a telephone survey of local residents being conducted by Natural Resources Wales, the Welsh Environment Agency, is uncovering significant local opposition to the nuclear new-build despite the project being favoured by the local MP and council.
The Chinese EPR reactors may not be subject to the same degree of safety scrutiny as those in Europe.
Safety tests at the Flamanville EPR nuclear power plant were only carried out in 2014 after France tightened its nuclear safety regulations, France’s Nuclear Safety Authority told the South China Morning Post in April this year, adding that no such tests were conducted on the two Taishan reactors before French nuclear manufacturer Areva shipped them to China.
Since shipping, the Chinese authorities have been alerted and Areva has said that the Taishan reactors meet Chinese nuclear standards.
“The reactor vessel heads for the Taishan reactors were evaluated as being in compliance with the Chinese regulations. The French and Chinese safety authorities are in contact following the information provided by the French watchdog,” the company told the South China Morning Post.
One thing Amber Rudd has not been quizzed about by the media was what to do with the nuclear waste that would be generated by any new nuclear power stations.
I mentioned last week the problems the UK persists in having with its existing high-level nuclear waste stockpile, which nobody wants to have buried in their backyard.
The French have the same problem, having been struggling to overcome public opposition and legislative obstacles to a plan to bury hundreds of thousands of cubic metres of high-level, long-lived nuclear waste 500 metres below the rural village of Bure.
The CIGEO project, managed by l’Agence nationale pour la gestion des déchets radioactifs (ANDRA), was estimated to cost €16.5bn (AU$26.27bn) in 2005, but an estimate in 2009 set the figure at €36bn (AU$57.31bn). The final cost is unknowable, and work has not yet begun.
Of course, China, not being a democracy, can bury nuclear waste wherever it wants.
Perhaps we should ship all of Britain and France’s to China, as part of the deal.