Pumping more money into nuclear power leaves nation at a loss. By any measure, it’s been a miserable investment. When the government announced on Monday the first sale for three years of its stake in Royal Bank of Scotland, it raised £2.5 billion — and crystallised a thumping £2.1 billion loss for taxpayers compared with the amount forked out to buy the shares in 2008. “The government should not be in the business of owning banks,” Philip Hammond, the chancellor, said. He was right. Yet owning nuclear power stations is another matter, apparently. In fact, after flogging off some of its RBS shares, we didn’t have to wait long to discover what ministers have settled on as the government’s next golden investment opportunity. Within hours, Greg Clark, the business secretary, was on his feet telling MPs why he wants to plough billions of pounds of taxpayers’ cash into another questionable private enterprise: a pair of giant nuclear reactors at Wylfa, on Anglesey, with Hitachi, of Japan. Once built at a cost of more than £15 billion, Wylfa could generate 2.9 gigawatts of electricity, enough to power five million homes. If the returns from its investment to prop up RBS at the height of the global financial crisis weren’t enough of a lesson, the decision to help to bankroll Japan’s troubled nuclear industry seems like an odd way to prove that the government can be trusted as a shrewd steward of public money. For all of the government’s repeated pledges that new nuclear plants would be built in Britain to replace existing reactors entirely by the private sector and without state support, Mr Clark’s decision proved once again that nuclear power in reality seems to be untenable without it. The decision to pump state resources into nuclear power seems especially odd when viewed in the context of what is happening elsewhere in the energy industry. While the government’s wish to build reliable, low-carbon sources of power is laudable, its decision to plump for nuclear feels out of date. While the cost of nuclear power seems to climb inexorably higher, the cost of viable renewable alternatives continues to plunge. Taxpayers should brace themselves for another fat loss.
Times 7th June 2018 read more »
Nuclear Power Finance Model Emerges From London’s Sewer Project. The U.K. government wants to revamp how it finances nuclear power and is looking at how it drew in funds for a 25 kilometer (16-mile) sewage project in London as a model. The move announced by Business Secretary Greg Clark on Monday, would help reduce the cost of nuclear power by requiring the state to share some of the risks of construction with the Wylfa plant in Wales. That would defuse criticism that came up after the last deal on the Hinkley Point C station, which is being built by Electricite de France SA. It will get paid well above the market price for its electricity. For decades following former Prime Minister Margaret Thatcher’s effort to privatize state-run enterprises, the government tried to push commercial risks on money-making projects onto business. Infrastructure projects can be so big and take so long to pay off that few companies are willing to shoulder the cost alone. That is forcing Theresa May’s administration to reconsider its reluctance to involve the state in commerce. The model that worked with the Thames Tideway Tunnel, a 4.2 billion-pound ($5.6 billion) sewer line through the north of London – the government provided a contingent support package, which made the taxpayer liable for some construction risks. This helped get private-sector financing at a lower price. By making a direct investment in nuclear new build, the government can lower financing costs by more than a quarter, according to Aurora Energy Research Ltd. However, this approach exposes taxpayers to the risk of cost overruns and delays.
Bloomberg 6th June 2018 read more »
A signal by the government that it may invest in a multi-billion pound Welsh nuclear reactor has angered critics of its energy strategy and supporters of green power. Wylfa Newydd power station in Anglesey could cost more than £15bn to build and be part funded by the taxpayer, energy secretary Greg Clark told the Commons on Monday. “The government will be considering direct investment alongside Hitachi alongside Japanese government agencies,” he said. Clark stressed that plans were still in formation and that “no decision has yet been taken to proceed.”
Public Finance 6th June 2018 read more »
Chemical Engineer 6th June 2018 read more »
Petroleum Economist 6th June 2018 read more »
In a massive U-turn, the government has committed £5bn of taxpayers’ money for a stake in a new nuclear power plant in Wales. And it comes at a time when its investment in clean and renewable energy is at its lowest since 2008. Negotiations have started between the government and Hitachi over the Wylfa Newydd nuclear power plant on Anglesey. This government has backtracked on its previous position in order to invest in a company with a poor safety record and an energy source that’s difficult to justify using. It comes at a time when greater investment is desperately needed in renewable energy. Renewables benefit everyone. They make sense economically, and give us at least some chance of countering our current environmental destruction.
Canary 6th June 2018 read more »
While the past decade has seen a mass of energy expended on nuclear policy, the actual new nuclear generation delivered wouldn’t power a single light bulb. And though the Hinkley deal may have kept government borrowing down, taxpayers will still end up paying through the nose for the project through their electricity bills. This week, the government said it would consider taking a direct stake in Hitachi-backed plans to build a new nuclear plant on the Isle of Anglesey. While this is not a firm commitment, Labour is right to describe this move to get back in the nuclear game as a big shift. To some extent, the move probably reflects the relative weakness of the Treasury, which can ill afford to pick a fight with the Business, Energy and Industrial Strategy department, its closest ally in the government’s internal Brexit wrangles. But for the nuclear industry, going back to the future is no bad thing.
Utility Week 6th June 2018 read more »