Matt Rooney is engineering policy adviser at the Institution of Mechanical Engineers: The UK government is rumoured to be ready to take a £5bn stake in the proposed new nuclear power plant in Wylfa. Department of Business Energy and Industrial Strategy (BEIS) Secretary of State, Greg Clark has suggested that this would be a one-off, but direct government investment in electricity generation would be a huge U-turn after decades of aversion to such state intervention. Why would the government take such a step? And more generally, what are the principles which should determine the level of government involvement in the energy market? The main argument for direct state investment in electricity generation is the government’s ability to reduce costs through much lower borrowing rates than those available to private companies. This will generally reduce the cost of electricity for any technology, but it has a greater effect when the upfront costs are high, the running costs are low and the asset has a long lifetime. Ticking all these boxes will be the likes of large nuclear, hydroelectricity, and yes, tidal lagoons. All of these technologies will generate electricity for many decades, but typically private companies do not make decisions on these timescales. With a supposed 120-year lifetime, tidal lagoons are the type of energy projects that would be more suitable as a government investment in the nation’s long-term interest than as a wholly private sector endeavour. The Hendry Review of the Swansea Bay Tidal Lagoon project recommended that the government greenlight the project citing mostly industrial strategy reasons – this was to be a ‘pathfinder’ project that would lead to cost reductions in future projects. However there would also be further local benefits to the region, such as employment, research and development opportunities, but also economic gains from resulting tourism and recreational activities for Swansea. This is why the Welsh government was reportedly willing to step in with financing for the project.
Business Green 9th July 2018 read more »
Reader’s Blog Professor Wade Allison asserts that “Nuclear is for life”. Yes, it is. As he is so keen to embrace it, would he be happy take home a share of the industry’s waste? Allison’s argument that we “must move beyond radiation phobia and accept more relaxed, evidence-based nuclear regulations” is a tall order, considering industry revelations, like the falsification of quality assurance data at Sellafield’s Mox Demonstration facility in 1999. Undeniably, energy security comes at a cost. For nuclear energy, this is a very long-term mortgage, as both fuel and waste stockpiles create their own health-and-security risks.
Irish Examiner 7th July 2018 read more »