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Energy price hikes? Brace yourself for more if Brown goes nuclear
Posted by bex on 7 January 2008.
See all updates about nuclear power.
Now here's a surprise: the government was being 'economic' with the truth when it promised that we, the taxpayers, wouldn't have to foot the extortionate bill for new nuclear power.
It turns out that we, the consumers, will be picking up our fair share.
Yep, the day after the papers reported a 15 per cent energy price hike, we're being told to brace ourselves for more hikes if the government succeeds in dragging us down the nuclear road.
Energy firms have been bending ministers' ears to make sure they're allowed to pass on the costs of decommissioning new nuclear plants to customers. These costs are estimated at £10 billion per plant, which means consumers will be paying a whopping £100 billion - not for the electricity we're consuming, but to make sure the plants are made "safe" once they've finished operating.
"It is understood that plans have been agreed," says The Guardian, "for the government to collect a fee from the companies for each unit of electricity used in British homes to build up a fund to meet decommissioning costs. It is expected this extra fee will be passed on to consumers in the form of higher bills." But these funds will fall well short of the true costs of the clean up and disposal of the waste. Exit stage left nuclear utility, final curtain taxpayer.
And this doesn't even take into account the costs of transporting and storing the nuclear waste, and the £1 billion cost of bribing compensating whichever lucky community is chosen to host the waste site(s) - all payable by the taxpayer. That's on top of the £5.3 billion we've paid to dig the woefully incompetent British Energy out of its financial black hole. And then there's the £70 billion bill the taxpayers will have to foot to clean up our existing nuclear mess...
On Thursday, the government will announce its decision on nuclear power. It's a choice between a financial dead duck that needs multi-billion pound subsidies and guarantees to even get off the ground or the much more sensible, cheaper, cleaner, safer options such as renewables, energy efficiency and combined heat and power, which can do far more to stop climate change and ensure energy security far more quickly and for far less money. On Brown's current record of competence, we're not holding our breath.
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Taxpayers and consumers of nuclear are not the same thing
It's an error to consider UK taxpayers and consumers of electricity from potential new nuclear power plants as the same thing. Taxpayers are essentially all UK taxpayers, whereas consumers - in this context - are only those who would buy at least some of their power from the new power plants, if such are ever built.
However, the relevant question is if the TOTAL of funds resererved will be sufficient (and available-when-needed) to meet ALL decommissioning and waste management liabilities, long into the future. The collpase of British Energy in 2002 and its subsequent rescue by the British taxpayer with subsidies running into the next century shows vivedly what happens when this is not done.
Energywatch has a neat table summarising the fuel-mix disclosures of all UK domestic suppliers, where one can see (for 2006-07) which firms sell how much nuclear-generated electricity:
Link
Not buying nuclear is a very good way of not having to contribute to its back-end costs.
re: taxpayers and consumers are not the same thing
Hi Mark
Sorry, took me a while to reply and, in the meantime, someone else has beaten me to it here.
It's a nice idea though :)
Cheers,
Bex
gpuk
Nuclear won't cause price rises
Even including the cost of decommissioning and waste management, the price of nuclear electricity is cheap compared to the alternatives. That is the whole point. That is why it was favoured in the UK Energy Review.
The cost of decommissioning, per unit of electricity, is about 0.1p to 0.2p per kWh. It makes hardly any difference to the price of electricity. Nuclear power creates such a vast amount of electricity that it is trivial to raise the billions required for decommissioning some 70 years in the future.
It is wilfully disingenuous of you to suggest that the cost of decommissioning should be anything other than part of the cost of the electricity paid for by the consumer. This is the fairest way to deal with it.
It is equally disingenuous to suggest that this will lead to price rises. The cost of nuclear electricity is not dependent on the price of gas, which has caused recent rises in energy prices. In fact the cost of nuclear is barely even dependent on the price of Uranium. If Uranium price doubled the cost of nuclear electricity rises by about 7%. If the price of gas doubles, gas-fired electricity rises by 70%.
Once the nuclear plants have been built, the cost of electricity generation is extraordinarily stable.
Nuclear = expensive energy
And nuclear will protect us from rising gas prices how exactly? As we've discussed elsewhere, decentralised energy (by which I mean efficiency + renewables + CHP) delivers both heat and electricity, and nuclear can realistically deliver only electricity. 86 per cent of our oil and gas consumption is for purposes other than producing electricity. So nuclear power, which can only generate electricity, is almost irrelevant. Unless we turn to CHP, we'll remain at the whim of global gas price hikes.
Another factor is that only 37 per cent of the average British electricity bill is for the electricity; the rest goes to propping up our grossly inefficient, centralised infrastructure. Which is why decentralised systems can actually work out cheaper for the consumer than even coal. (Efficiency measures alone can save consumers a whopping £12 billion a year - the government's own figures - and they save more money than they cost to implement.)
And, as I've said elsewhere, this report shows overall capital costs of a decentralised energy scenario to be more than £1 billion lower than a nuclear scenario - and the retail costs of electricity to the end user are lower too. The model doesn't include the cost of managing nuclear waste, so in reality the cost advantage will be much greater than the £1bn. The same report ends also concludes that CO2 emissions are 17% lower when using renewables / CHP than in the nuclear scenario.
Cheers,
Bex
gpuk