Encouraging News on Nuclear Power

Last month, I wrote a this post on nuclear power highlighting the manifesto positions of the various parties. Labour in Westminster were the only party unequivocally in favour of nuclear power, which put them at odds with their Welsh Labour colleagues in the Assembly who think that nuclear power is unnecessary in Wales, because we can generate all the electricity we need from renewable sources. Plaid (with the SNP and Greens) the LibDems and the Tories in the Assembly share that view, and the Tories in Westminster took the position that they would allow new nuclear power stations to be built ... provided they receive no public subsidy.

As every party in the Assembly is against building any new nuclear power stations in Wales, it was very encouraging to hear Chris Huhne make clear what the new ConDem coalition's position on nuclear is in this interview on the Today programme yesterday morning, but also reported here.


This should give those of us who are opposed to nuclear power in Wales a good idea of the grounds on which to fight to ensure that Wylfa B is never built.

In short, there seems to be no way that we can prevent it being built on planning grounds or on safety grounds. If a company or consortium wants to go ahead and build a new nuclear power station the Westminster government will allow them to do it. But they will have to pay for it and, more importantly, pay the costs of decommissioning it afterwards.

Our task has got to be to ensure that these costs are not deliberately underestimated at the outset. Personally I have no absolute objection to nuclear power and believe it might well be the "least worst" option in many parts of the world that do not have the abundance of renewable energy resources we have in Wales. The risks and dangers are great, but those risks can be kept within acceptable limits provided that strict safety regimes are adhered to, which will require a lot of money to maintain both during operation and then for hundreds of years afterwards.

The major issue is not the cost of building the stations but the cost of cleaning up the waste they produce and of decommissioning the site when it has come to the end of its productive life. These costs are much, much greater than the cost of construction. In principle, the government's idea is that the power companies would set aside money each year so as to pay the costs of decommissioning and clean up. The fundamental flaw in that approach is that a private company can either go bust or refuse to honour its contract commitments at any time, in much the same way as happened when National Express walked away from the East Coast rail franchise last year. The taxpayer will be left to pick up the bills. The very nature of private companies is that they make a profit when they can ... but when they can't they can be wound up, leaving others to pick up the pieces.


In these situations, the only way to guarantee that the costs will still be met if the company folds is for them to put the money up front, in the form of some sort of bond, perhaps backed by insurance. This happens in the construction industry, but the costs involved in nuclear clean up are way beyond that scale ... not least because it's virtually impossible to predict how much something will cost in maybe 40 years time. So the Labour Government have been trying to run with a mechanism called "Funded Decommissioning" which, in order to make the cost in any way affordable for private companies, seeks to put limits on their liabilities.

At present this is the subject of a public consultation which began last month and is set to run until June. The details are on this page. But this is the stated aim:

The purpose of this consultation is to seek views on whether or not the proposals within this document provide clarity for both operators of new nuclear power stations and the public on the financing arrangements the operator of a new nuclear power station will have to put in place to meet the full costs of decommissioning and their full share of waste management costs.

Reading the document, I have to say that the assumptions made about the cost of decommissioning and storage of waste seem inadequate. This is what the document says:

4.9  The Government’s updated estimates of the costs of decommissioning, waste management and waste disposal (for a generic 1.35GW PWR operating for 40 years) are:
     a. decommissioning and waste management costs in the range
     £800m – £1,800m (undiscounted); and
     b. waste disposal costs in the range £600m – £1,100 (undiscounted).

Compare these estimates with the 2008 estimate of a further £73bn being required to decommission the current crop of 19 nuclear stations. That averages at £3.8bn per station for generally smaller power stations ... nearly one billion more than the top range government estimate. It should be noted that at present most waste is sent to Sellafield for processing, but that it is now intended to store this on each individual site, ending any economy of scale; and that the type of waste that will be produced from new nuclear power stations is much more dangerous than that produced by the old generation of stations.

When we consider that the estimates before the £73bn were themselves wildly optimistic, I am not confident that these estimates are at all reliable. If we don't work on estimates that actually cover the cost, we the taxpayers—well, our children and grandchildren—will be left to foot the bill for any shortfall. It will be another case of private firms making a profit while they can, but the public purse having to pay for any shortfall afterwards.

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The Druid of Anglesey said...

You are wrong in saying that Labour in Westminster were the only party unequivocally in favour of nuclear power - as opposed to the Tory view that they should only go ahead if they do not require public subsidy.

Philip Hunt, the ex-Labour minister of state at the Department of Energy and Cimate Change, said back in January that Labour's policy was:
"absolutely clear" that the cost of new nuclear power plants must be met in full by the commercial companies themselves, including the cost of decommissioning and waste management. (http://theenergycollective.com/TheEnergyCollective/blog/filteredlist?key=department+of+energy+and+climate+change)

So the Labour and Tory position is basically identical.

Regarding trying to stop Wylfa B: don't.

MH said...

You can read the figures in Labour's consultation document, Druid. Do you think they will cover the costs?

As it seems obvious to me that they won't, the only conclusion to be drawn is that, no matter what Labour ministers said, they were fudging the issue in order to make new nuclear stations possible.

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