Ever since the government started ranting about the joy of new nuclear power stations, a central plank of their shaky argument has been that the billions required will be covered by industry and not the taxpayer. But despite these bold claims, legislation and loopholes have been carefully engineered so that public money will inevitably subsidise the industry. Hardly surprising, given there hasn't been a single civil nuclear project that hasn't required huge sums of public dosh.
Back in May 2006, the then industry secretary Alistair Darling said: "it would be for the private sector to initiate, fund, construct and operate new nuclear plants and cover the costs of decommissioning and their full share of long term waste management costs."
Long before he uttered those words, the Energy Act 2004 gave the Secretary of State powers to bail out any company which couldn't meet its obligations to deal with nuclear waste. What are the chances of some future incumbent having to dig deep, given that the Nuclear Decommissioning Authority (created to oversee the radioactive waste problem) reckons it will cost (wait for it) £73 billion just to clean up the existing mess. Pretty high, I'd say.
Further more, the Department for Business, Enterprise and Regulatory Reform (DBERR) won't say what that "full share" actually means. No one knows. Will companies have to pay the "full" cost of waste clean up, or only a smaller "share"? We suspect it will be the latter, and that means taxpayers will have to foot a hefty slice of the bill to clean up radioactive waste from new reactors. And, on top of this, companies won't have to provide any assurance that they'll be able to meet decommissioning costs, unlike (bizarrely) those setting up wind farms.
Don't forget, not one public nuclear project anywhere in the world has been built, operated and decommissioned through private funds alone. Just thought it was worth mentioning again.
Fans of the privately-funded fantasy point to Finland and the US for examples of where it can work. Except it doesn't. Finland's Olkiluoto plant currently being built is hundreds of millions of pounds over budget and about two years behind schedule. Even though the construction project only started two years ago.
Meanwhile on the other side of the pond, a US government programme set up in 2002 to reinvigorate their nuclear power industry is all about providing state subsidies to entice private investment. Even so, it hasn't been enough to tickle the fancy of company board-members as no orders for new plants have yet been placed.
Back home, all this financial juggling shows that the government doesn't have the confidence to stand by its own grandiose claims. If you want to delve further, try our new briefing, The New Rush for Nuclear: An Expensive White Elephant, but if government has to keep bailing out nuclear projects which are sinking faster than a South Pacific island, how much will be left to provide the real solution to climate change?
