For years the government has placed its faith in nuclear power and the corporate interests that drive the nuclear industry. Its committment to the nuclear dream has warped Britain’s energy policy at the expense of both bill and tax payers.
In 2006 the last government started trying to deliver a new nuclear energy policy. The UK was to have ten reactors at eight sites in England and Wales. But things did not go according to plan. At £5 billion a reactor, nuclear power has turned out to be a very costly means of producing low-carbon electricity. It would take billions of pounds of subsidy before it made business sense to build nuclear reactors.
All mainstream political parties have committed to not providing public subsidy for nuclear power. But energy companies will not build them without a hefty subsidy. So instead of taking full advantage of the UK’s excellent potential for renewable energy and investing in energy efficiency, ministers have been looking at how to transfer the spiralling cost of delivering nuclear power to taxpayers and consumers. This may be illegal under European law. And one of the energy companies has warned that it risks damaging investment in renewable energy.
But despite the government’s best efforts, the nuclear dream is fast turning into a nightmare.
Last year, Scottish and Southern Energy pulled out of new nuclear in the UK. Last month, E.ON and RWE cancelled their plans. GDF Suez and Scottish Power have said that they’re unlikely to build any nuclear plants without a lot more subsidy. Now Centrica is also trying to get out.
That leaves just one company – Electricite de France, better know as EDF. EDF is very committed to nuclear power, but it is owned by the French government and takes its cue from the French president. The French election in May looks likely to deliver a new, more nuclear-sceptical president, Francois Hollande, whose officials have threatened to fire the head of EDF for mocking his plans to reduce France’s dependence on nuclear power.
EDF, whose credit rating was downgraded earlier this year, could well find it hard to raise enough money to build any reactors in the UK, especially if it has to find billions to decommission its French reactors. Investors, who have been sceptical of nuclear for some time now, are not going to rush to invest in EDF’s nuclear plant when every other company has pulled out.
The years that could have been spent on delivering an energy efficient, low-carbon economy, spearheaded by renewables, have instead been squandered pursuing a fading nuclear dream.
It’s time for energy secretary Ed Davey to admit that the government’s nuclear dream is failing. He’s now faced with a future of more imported gas, higher energy bills and higher greenhouse gas emissions. That would be unpopular with bill payers and bad for efforts to curb climate change.
The government could ditch nuclear, reign back on gas and start taking advantage of the UK’s potential for investment in clean, renewable energy. They could put large scale energy efficiency, as well as renewable energy, at the heart of this year’s electricity market reforms.
It’s not too late for a plan B, but time is running out. Ed Davey needs to step up and deliver.
