NEW NUCLEAR WATCH EUROPE (NNWE) MANIFESTO COMMITMENTS

SETTING OUT THE KEY OBJECTIVES FOR THE NEW GOVERNMENT

INTRODUCTION

New Nuclear Watch Europe (NNWE) believes that energy policy must:

  • Create a high degree of investor confidence;
  • Ensure Britain honours its climate change commitments;
  • Deliver uninterrupted energy supplies to British consumers;
  • Keep Britain’s economy competitive; and
  • Prepare Britain for the post Brexit world.

Election manifestos should therefore contain policies which will deliver:

  • The lowest possible energy costs;
  • Substantial cuts in carbon emissions; and
  • A secure supply of energy.

Politicians should recognise that Ministers can’t control energy prices because they don’t control all the elements of energy costs. Any promise of tighter regulation of consumer prices, however superficially attractive to voters, is counterproductive. Such pledges merely force investors to seek higher returns to compensate for political risk. They therefore lead directly to higher, not lower, prices.

NNWE’s Seven Point Plan for Energy:

  • Does not require any taxpayer’s money;
  • Reduces consumer funded subsidies; and
  • Can be implemented without new legislation.

It can therefore all be safely promised and speedily introduced.

THE SEVEN MANIFESTO PLEDGES

1) We will continue to implement in full the 2008 Climate Change Act.

Investor confidence in Britain has been unsettled by Brexit. In the energy industry, where the investment cycle is unusually long, investors need to be reassured that policy will not be subject to sudden changes. This applies particularly to the priority attached to low carbon investment.

A pledge to continue implementing the Climate Change Act, including the system of legally binding carbon budgets, will make clear that Britain will continue along the path towards a low carbon economy.

Confirmation that Britain will remain inside the EU Emissions Trading System will reinforce this. Emissions trading was pioneered in Britain. It is at last gaining traction globally as a useful instrument for encouraging investment in low carbon technology. Now is not the moment to leave the longest established and most international emissions trading system in the world.

Britain should be proud of its leadership on climate change in the last 25 years. In addition to making a distinguished scientific contribution to the international debate it has cut emissions significantly. In a world which increasingly acknowledges the need to address climate change these are strengths to be built on, even if rarely recognised as such by most voters, not trends to be reversed.

2) We will maintain nuclear as an essential and large part of Britain’s energy mix.

Achieving the cuts in carbon emissions to which Britain is committed will require almost total decarbonisation of electricity generation over the next 25 years. That cannot be achieved without a substantial element of nuclear power, which is currently the only available source of reliable low carbon baseload electricity.

The growth of renewable energy capacity is very welcome. However, in the absence of flexible, long term, low cost, large scale electricity storage, no responsible government should risk jeopardising energy security by relying too heavily on intermittent forms of electricity generation.

Britain must not make the same blunder as Germany. Shutting down its nuclear plants raised costs for consumers, sharply increased carbon emissions and left the German economy dangerously dependent on imported gas.

The present one fifth share of Britain’s electricity currently generated by nuclear must be at least maintained, and preferably increased.

3) We will use Britain’s credit rating to cut the cost of electricity for consumers.

The Government can cut the cost of electricity by lending money to developers of new plant to cover build costs during the construction period. In the case of nuclear, where upfront capital costs are high and the construction phase long, the savings are substantial.

The British Government can borrow 10-year money between 1-2% more cheaply than private sector borrowers. Passing this saving on to energy infrastructure developers reduces the cost of nuclear generated electricity by £10/25 per MWh.

Using debt for 100% of construction costs instead of a debt/equity mix like Hinkley Point, where the weighted average cost of capital is around 6%, produces an even bigger saving. This approach makes nuclear electricity cost competitive with all other low carbon technologies and much cheaper than offshore wind. It could eventually enable nuclear power to compete in the wholesale market.

Allowing energy infrastructure developers to access finance via government loans will neither cost the taxpayer a penny because the developer pays the interest costs in full, nor constitute a subsidy because the loan will be fully repaid once the plant is operational.

This approach will significantly reduce the cost to consumers of the subsidies currently being paid to low carbon electricity generators

4) We will encourage foreign investment in Britain’s energy infrastructure while protecting vital national interests.

Huge sums are needed to make Britain’s energy, transport and IT infrastructure fit for purpose in the 21st century. Part of these will come from foreign investors. Ownership of London’s water supply, airport, electricity distribution network and a big chunk of its mobile phone network, is already in foreign hands without any threat to these vital services.

The most cost competitive nuclear energy technologies currently available are from vendors in China, South Korea and Russia. British consumers can therefore benefit if those countries are encouraged to participate in electricity generation here.

We recommend that, when a nuclear technology has been approved by the Office of Nuclear Regulation, it should be permitted to be built in Britain provided that:

  • The shareholding of non-EEA state controlled entities in the operating company is less than 40%;
  • Operational control of the company remains with EEA companies/organisations; and
  • IT control systems are supplied by a trusted British vendor.

These rules will protect British interests while making clear that foreign participation in the energy industry is welcome.

5) We will enshrine in law the right of all EU citizens to work throughout Britain’s energy industry and to study, research and teach in Britain’s universities.

Britain’s energy industry, especially the nuclear industry, depends on a supply of skilled workers, some of whom come from other EU countries. Maintaining this supply will be particularly important during the next few years when new nuclear plant is under construction.

Britain’s universities have great expertise in many aspects of the nuclear industry, including decommissioning. This is a valuable resource which brings considerable benefit to the British economy, a benefit which has the potential to grow in future. To exploit this in full will require freedom of movement for nuclear scientists, academics, researchers and engineers.

At a time when Britain will be seeking to develop new trading relationships around the world it would be folly to throw away any competitive advantages which we currently possess.

We will ensure that the important contribution which EU citizens make to the success and growth of the nuclear industry in Britain is allowed to continue. We will not place any restrictions on the employment in Britain of EU citizens for this purpose.

6) We will ensure that Britain remains a member of the Euratom Treaty.

It is arguable that Britain can legally remain a full member of Euratom after it has left the EU. If this turns out to be impossible then the Swiss model of associate status should be adopted. It is essential to avoid the massive disruption, and possible existential threat, to Britain’s nuclear industry which departure from Euratom would cause.

The new Government should make clear immediately after the General Election that the decision, which has not yet begun to be implemented, made by its predecessor to leave Euratom will be reversed.

7) We will actively promote Britain’s cooperation with a group of pro-nuclear EU member states and other countries around the EU’s borders.

Britain’s national interests will be served by promoting international cooperation between pro-nuclear countries. Such cooperation will help to bring costs down and harmonise safety standards. Pursuit of these goals and stepping up the international response to climate change should take precedence over short term political considerations.