Tim Yeo outlines why the UK government needs to go further with its nuclear power development plans
EDF boss Vincent de Rivaz should have gone into politics. His deft and courteous handling of the barbs thrown at him House of Commons Energy Select Committee this week would have done credit to a Minister defending an unpopular government policy.
However the MPs, most of whom were sceptical about the prospects for Hinkley Point C, focussed on when the final investment decision will be taken and whether EDF can afford to proceed. The answers to those questions rest not with Vincent, whose commitment to this project has been exemplary, but with the French government.
The awkward truth is that even if French ministers stand four square behind EDF financially, as they may well do, the problems which Areva is grappling with at Flamanville are another and probably greater obstacle to progress at Hinkley.
The more interesting evidence to the Committee came from industry analyst Peter Atherton and Cambridge academic Simon Taylor. Together they mounted a softly spoken but devastating critique of the British government’s approach to commissioning new nuclear capacity.
A lost decade of dither and delay over nuclear at the start of this century meant that by the time negotiations started in earnest with EDF over Hinkley the Government was in a weak position. This partially explains the eventual strike price of £92.50, much cheaper than offshore wind and biomass but higher than what could be obtained from alternative nuclear vendors.
But Britain’s reluctance to use the sort of competitive bidding process successfully deployed by the UAE, for example, may cost us dear. UAE has driven a hard bargain with Kepco who will bring the first of its four new nuclear power plants on stream next year, only seven years after contracts were originally signed.
Britain has spent those seven years in seemingly endless negotiations which have left ministers now hoping, Micawber like, for something to turn up. More galling still is the fact that UAE’s consumers are likely to pay around 25 per cent less than their UK counterparts for the electricity which this new nuclear plant generates.
The good news is that it’s not too late for the British government to retrieve the situation. As Messrs Atherton and Taylor pointed out it’s now almost a buyers market in the nuclear industry. Big players like Japan have no home market to sell to and Germany has absurdly opted to burn highly polluting lignite and import nuclear generated electricity from France.
If Energy Secretary Amber Rudd decided to take her commendable drive to secure better value for money for consumers to its logical conclusion she would now announce that Britain needs 25 gigawatts of electricity from nuclear by 2030 and invite bids.
This would produce a reliable supply of electricity more cheaply than alternative low carbon generators. It would also open up the prospect of a big jobs boost. In UAE less than 5 percent of the 15,000 strong workforce building the nuclear power stations was an existing Kepco employee.
To achieve this benign outcome some pride may need to be swallowed but the present humiliating position whereby the future security of Britain’s electricity supply may soon depend on the whims of French politicians would be avoided.
The first step is to recognise that buying a tried and tested technology may be less exciting than backing a ground breaking first of a kind project but it does reduce the risk of serious cost and time overruns.
If the bidding process produced a winner from outside the EU safety wouldn’t be jeopardised because any technology deployed here must pass the eagle eye of our internationally respected Office of Nuclear Regulation. How much supply chain work is captured for UK firms would depend on how hard a bargain we drive with the vendor.
Maybe for once economics and common sense can be allowed to trump politics and sentiment. If it does all three of Britain’s energy aims – greater security of supply, faster cuts in carbon emissions and lower prices for consumers – can be achieved.
This isn’t the first time NNWE has made this case and it may not be the last. I made it in South Africa earlier this month too. A decision on whether to address that beautiful country’s energy challenges by the deployment of nuclear power must be taken in the next year or so.
What is clear in both Britain and South Africa is that the problem won’t go away. Doing nothing isn’t an option. Political courage is needed. NNWE has already urged the government to commission and publish an independent analysis of the alternatives. They could do worse than ask Peter Atherton and Simon Taylor to carry it out.