Published on The Guardian, 18th May 2005.
New nuclear power stations are inevitable. That is the message from a barrage of headlines in recent weeks. “Secret” plans to announce the building of 10 new nuclear power stations after the election played nicely into the running story of a prime minister with a trust problem. But who is calling for these new nuclear stations?
Not the utilities that run Britain’s electricity system. The authoritative 2005 survey of utility boardrooms found that industry leaders’ expectation that nuclear power plants would be replaced had fallen by half since 2004 to a minuscule 15%. Not ministers, either, who have consistently pointed out that they would be delighted if someone wanted to build a new nuclear power station – provided they paid for it themselves. And not the Treasury, which confirmed recently that it is doing no work on new ways to finance nuclear construction.
So who, then? Well, there is sacked energy minister Brian Wilson and increasingly eccentric botanist David Bellamy. Some people in No 10, led by long-time nuclear hawks such as Geoff Norris, are up to the usual Downing Street policy-making-by-headline game. And there is a small clutch of journalists whose nuclear enthusiasm exceeds their grasp of energy policy realities. Even the much touted secret Whitehall plans turned out to be no more than one of the options papers that civil servants produce like confetti for incoming ministers during a general election.
In reality, the current clamour is just the dead ducks of the nuclear industry quacking away as usual. The prime minister’s reluctance to move from his carefully crafted position of not closing the option is wise. Blair is a master of the art of letting people hear what they want to hear, and he will be well aware of what happened on this issue to Margaret Thatcher. Her 10-station programme, announced only months after her election, led 15 years later to an order for only one.
The nuclear lobby is desperately seeking a way around the “who pays?” rock on which Thatcher’s plans sank. Its problem is that the economics of nuclear power stink. Even if you generously assume solutions to the problems of public acceptability and radioactive waste, and that the taxpayer will go on underwriting the third-party insurance and post-closure liabilities risks, they still stink.
Ten is always the magic number in the size of the proposed programme because anything less takes away the economies of scale necessary to bring the capital costs of the stations within reach. Financing a programme this big means paying for it out of the public purse or rigging the electricity market to cover the private investors’ risks.
Past experience with the latter course is not encouraging. British Energy needed a rescue package of half a billion pounds three years ago when electricity prices fell by almost half. To protect a 10-reactor programme from such a price fall, the amount and price of its output would have to be fixed for at least long enough to pay for the £20bn capital cost. It is not difficult to work out why the rest of the electricity industry – and any consumer, public service or business that uses electricity – would object.
The nuclear industry’s sudden green discovery is because this is the key to the public purse. Only if a credible and compelling case for huge public benefits is made can the twin obstacles of European state aid rules and competing public spending requirements be overcome. Hence the importance of the missed target on carbon emissions that will appear in 2020 when nine of Britain’s 12 nuclear power stations will have closed.
Unfortunately, nuclear power cannot help with this problem. If all the above obstacles could be overcome, 2007 would be an optimistic date for any order to build a nuclear power station. Starting from there and doing better than the nuclear industry has ever done before, the first station might be up and operating by 2014. If two stations at a time were ordered, and do even better, there might be three in operation by 2020 when the nine-station emission gap appears.
These are heroic assumptions. The nuclear industry’s argument is that there is no alternative – a familiar, if never very credible, refrain. However difficult the nuclear path, getting to the same point with renewables is even less likely. Using gas instead still has an emissions problem and makes Britain far too vulnerable to the Russians. Therefore, if you care about the climate, you must support nuclear power.
This is plausible, but wrong. It leaves out coal, which supplies 30% of our electricity. It also leaves out the rest of the world. China is building a new 1GW coal-fired power station every fortnight. If the 1,400 coal-fired power stations to be built by 2030 (nearly 600 in China) use conventional technology then it will not matter what happens in Britain. There will be no prospect of maintaining a stable climate.
The most urgent priority is therefore to prevent the lock-in to carbon-intensive coal burning. That means moving very rapidly to the deployment of advanced coal technologies, with carbon capture and storage. The prime minister has the opportunity to begin this task with his joint presidencies of the G8 and the EU. If he succeeds globally, then he will have made an emissions-free coal option available nationally long before we have to shut our nuclear stations.
If he fails, then it will not matter all that much to our children how much public money we might waste on pursuing the nuclear chimera.