Suffolk County and Suffolk Coastal councils have taken a new position about the whole Sizewell project. A politically crafted and very careful deal has been done between the two councils. All in planning language, as is right and proper, it deserves careful study.
It is the handiwork of County Councillor Guy McGregor, chairman of the Joint Local Authorities Group liaising with EDF Energy.
The McGregor Report has been passed by both councils' cabinets. The report’s position has been described as “not satisfied”, while the usually EDF supportive East Anglian Daily Times (EADT) newspaper picked up one councillor’s comment that Suffolk should now “get on a war footing”.
Another councillor. representing an area on the north side of the project development area. proposed a tough 12-point programme approach to EDF on a take-it-or-leave-it basis.
The councils are now supporting only the “principle” of nuclear energy, not the proposals as they stand and maybe not even this particular project if it can’t meet “environmental exemplar” standards.
That was the bar set at Stage 1. In the subsequent four years there has been a lot of collaboration, with support both in principle and in practice and ceaseless assertions of beneficial outcomes for Suffolk. While this music still plays in some quarters, quite profoundly different notes are now emerging.
The government has been quiet about energy policy since the Prime Minister gave her OK to Hinkley C. But lots has been happening which is certainly not good news for the nuclear renaissance policy she inherited. EDF’s problems are not going away (see below). The two other companies proposing new reactors on Anglesey and Sellafield’s border at Moorside both have troubles too. Meanwhile China, investor in Hinkley, prospective 20% stakeholder in Sizewell and 100% “China First” investor at Bradwell in Essex may be worried about Brexit shutting them out of the European energy market.
Time limits for Hinkley
EDF faces two time limits on Hinkley C. First, it apparently gets cancelled if EDF’s own similar EPR reactor at Flammanville in France is not up and working by 2020. Second, although EDF boasts a firm 2019 start date at Hinkley C, the UK government’s £92.50 strike price (subsidy) and £2 billion finance guarantee apparently also cease if the reactor is not up and running by 2033. These dates could change because of Brexit, but renegotiating them would be a big headache and oopen further public debate. Build time? Well, EDF have now lengthened Sizewell’s build time to 10-12 years from 8-10. No-one really believes this. But it suggests that Hinkley could well hit the 2033 buffer if it can’t at least start in 2019.
Industrial Strategy & Energy Policy
A clue to problems with the nuclear renaissance came in the big hooha about a new government industrial strategy over the Xmas period. Looked at closely, the ten ‘pillars” - themes - include energy & nuclear. But all that this chapter says about nuclear energy is that Hinkley C is confirmed and £180 million has beeen set aside to support training up new nuclear engineers because the UK is very short of them. Nothing about the renaissance, nothing much about energy policy, but, if the green paper is to be believed, an implicit energy “review”, stressing a “low carbon” future.
Eversheds, the big London lawyers’ analysis is that it is all about cutting energy costs to consumers and businesses (a routine refrain), backing energy innovation through battery technology, storage, offshore wind and electric vehicles, and energy exports (to whom, given Brexit?). A revised CO2 emissions reduction plan is due this year, and there may be a new energy research body to look at smart grids and storage and batteries. Is this a ‘review” or not?
No mention that the smart meter roll-out will be paid for by customers whether they want one, or not. The new overall strategy is all about the Northern powerhouse, not East Anglia’s future.
Brexit & Nuclear Strategy not joined up?
Before the supreme court judges made their Brexit decision on MPs’ role, we thought that the government would need to stay in Euratom so that we could, in future, trade energy with the EU. Not just energy, but nuclear fuel manufacture and lots else, in a UK nuclear industry employing a total 68,000 workforce and a major fuel processing export industry.
Staying in Euratom would have been quite logical, since the Hinkley subsidy case put to Europe by the government rested on Euratom being in favour of nuclear energy and therefore helping EDF out was legitimate. So what has changed? Has this been forgotten, in the rush to be free of Brussels and subsidize whatever they want, without Brussel’s conditions?
Whatever the aim, what hapened is that the short Brexit parliamentary Bill contained a note to the effect that leaving Europe involves leaving Euratom too. Lots of questions now follow: what about the big European fusion reactor experiment in England’s Berkshire? What about the cash strapped UK Office of Nuclear Regulation? It has been under the wing of Euratom, and will now have to reconnect to the International Atomic Energy Authority. They might prove tougher than Euratom.
And while Europe will be able to export nuclear electricity to us, we might not be able to export it to them. After all, as a former hapless Energy Minister said, “nuclear electricity is different”. How true that was, especially if the rules governing it are different as they will be. Maybe the UK will look for a special deal, but the one done with Switzerland assumes free movement of labour and not much influence in Euratom. The only industry sector deals mentioned so far for Brexit are for the finance and banking sector and the car industries. Doesn’t look like much of a basis for a nuclear renaissance energy policy, does it.
An important note here: the EU passed a new nuclear inspection law in 2014 requiring nuclear inspections to be carried out jointly with two other countries to guarantee better standards. The UK has done nothing about this. Or did they see this coming, and therefore decide to put Euratom exit into the Brexit package? Stranger things have been known. Maybe China and Korea weren’t keen on EU standards? Was that the priority? Watch this space, and remember, it may all be a real muddle and mess.
Renewables get 5 year cash limit and price cuts
If there is a simple bit of energy “policy” it is that renewables - all types - are to get a total subsidy of £730 million front loaded over five years, and reference prices (strike prices) dropping too. This is a reduction, and slows down renewable development. Renewables are however developing very fast, with their guarantee prices already close to Hinkley’s £92.50, which is now worth £100 with infation proofing. Remember, though, that nuclear Hinkley is inflation proofed, and lasts 35 years, while renewables are on old 2012 prices and dropping. The press release by the government (9th Nov.2016) stressed that the UK’s “diverse” energy system includes record investments in renewables but also mentions “the reliable electricity that nuclear power investment will provide”. Maybe they are telling us something here: are they already factoring in new nuclear supports?
Capacity market subsidies
At the same time, the government’s second auction has been held to get energy companies signed up to keep the lights on. Note here: new nuclear is no longer seen as able to do this. It is all just too late.... So old nuclear, some of which has new safety problems, has been counted in with imported coal and lots of gas for a “capacity market”. This works by paying a bonus of £19 per mega unit of electricity to companies willing to hold a reserve in case the grid runs short. The £19 is on top of the going price, of course. And the public pays. Estimates for the period are between £650 million and £1.5 bn. The point is that this is, in reality, the new energy policy: a pumped up old tyre on the energy wagon because new nuclear is still a long way off. And EDF have done very well out of capacity markets too because they own all of the “old” nuclear plants.
Renewables & Supergrids & Big Oil Sell-offs
Renewables are growing and getting cheaper despite government subsidy cuts, and are being spurred by huge developments in batteries at domestic, car-sized and community-grid scales. New supergrids are being developed for long distance surplus elctrcity distribution. China is well ahead and the first European has been agreed for north east Germany to take surplus wind power right across to the south of the country where it is needed.
Meanwhile, the global oil industry is selling off so-called “stranded asssets”, i.e. oil reserves, with no foreseeable market, and adjusting to a long term oil “glut”. This and low gas prices mean a lot of things but one thing is certain: expensive long run nuclear power just doesn’t make it to market as a basic energy source without huge subsidies and serious questions about whether the new 60 year reactor lives will ever see out much more than half their life span. Is that why the Hinkley subsidy, about twice the market rate, runs out at 35 years, not 60 years?
So, to sum it all up, lots of warm words about clean energy, but renewable cuts, smart meters of no use to consumers but fine for the suppliers and paid for us by us, and only just one nuclear paragraph with another round of “capacity market” subsidies including old nuclear which we all pay for. That’s supposed to be an energy policy.
Energy Plan B call
So it’s no surprise that the chattering classes are paying attention to it all. London university energy professor Nick Butler, ex BP oil executive and regular energy commentator has called for a Plan B for energy, pointing out that when the Prime Minister OK’d Hinkley, she also promised a National Security Assessment because of the involvement of Chinese money in UK nuclear plans. Also, linked in, he says that Mr Trump may not like the idea that Toshiba (see below) might now sell off its American technology, the Westinghouse AP1000 PWR reactor. This is a new design, supposed to be safe and economical. It is the rival to EDF/Areva’s EPR reactor. Trump’s concern would be that China might like to buy in again. Another headache for UK nuclear plans, given the Special Relationship with the USA.
If EDF Sizewell thought the Christmas break would be a nice quiet time to get their Stage 2 consultation over, well, did they get it wrong. Bad news has continued to break for them in France, and has now also emerged for the two other UK nuclear investors, the Toshiba Nugen project at Moorside, Sellafield and the Hitachi Horizon project at Wylfa on Anglesey. Both have financial problems, one near terminal for nuclear prospects, the other, well, indicative? It looks as though EDF’s probems are not just French and their EPR design.
Toshiba (Nugen) has run into financial crisis over its two US nuclear plants, and decided to withdraw not just from Nugen as the main investor/developer at Moorside but also to wind up its global new nuclear business altogether. The reactor to be used is what has gone wrong for them in the USA, but is a new US design, the AP1000. Toshiba’s global financial results were due Feb.14, 2017. Rumours suggest Moorside has no future unless the government puts big funds in directly. Korea’s KEPCO has been in Nugen talks “for months”. (Financial Times). Chancellor Hammond and Energy Minister Clarke have been hunting for cash in South Korea, whose KEPCO nuclear company are building a plant in Abu Dhabi.
Hitachi (Horizon) at Wylfa in North Wales has been heralded as good news, but the truth is that they don’t have enough money for the £19bn project, so the Japanese government have got their international development bank to cough up £6.5 bn , bnut there is still a huge fiancial hole. Hitachi’s own funds are reckoned at only 10% of the total cost, i.e. £1.8 bn. Japan is at the heart of the matter. With Toshiba in trouble, and the really bad news still coming in from Fukushima (see below), the Japanese Government had to do something to keep its nuclear ball rolling. The £6.5 bn deal is also the handiwork of Chancellor Hammond and Energy Minister Clarke. Rough arithmetic says Hitachi are about £10-12 bn short. Where next? China’s nuclear company with its agreement to develop at Bradwell, Essex, would be an obvious place for Hammond/Clarke to go cap in hand. But the cap is very empty. And China may not like being outside Euratom. Equally, China might finish up in charge of UK nuclear instead of EDF. (Sources: Japan Times, Economist, Guardian, NFLA- Nuclear Free Local Authorities).
A global overview has been done by The Economist (28.1.17) drawing on the Global Nuclear Power Database. The Economist said Hinkley C now looks like a “Hail Mary pass”. EDF’s EPR is looking impossible to build and Toshiba’s American Westinghouse AP1000 has caused a crisis. These are the two “new” reactor types.
EDF’s troubles look irresolveable. Their share price (85% French government) has dropped by half in two years, so the whle company is now worth only about £16 bn. Areva, the actual nuclear plant maker, has gone virtually bust and has had to be taken over by EDF and the French government. This will take an immediate £4bn injection of funds, but so far only £1bn has been raised. (Figures derived from Bloomburg). Bloomberg says “France’s next president may face €3bn nuclear hangover”. That’s a modest version of the huge problem. Here are the rest of the figures. EDF’s total share value is about the same as the cost of Hinkley C power station, given some China Nuclear Corporation capital. A share issue of €5bn has been made, raising €1/2 bn (half) from Japanese sources. The French government has given them a liquidity booster of €3bn. A bit difficult to get one’s head around, but these bits and pieces pale into insignificance compared to their debt. The Times (Feb 6, 2017) said that EDF has total debts of €37 bn.
EDF has faced too much competition - against rigid nuclear prices - from gas and renewables pushing overall energy prices downwards, plus the costs of a bad reactor (the EPR).
Then there are capital problems from the decommissioning of old plants, for which EDF has had to set aside €36 bn, much less than Germany, though there are many more French reactors. Then the nuclear engineering parts problems (French and Japanese imports apparently), the connected too-much-carbon-in-steel problem, the inadequate office paperwork on quality assurance, Areva’s collapse and the debt pile from Finland. This is rumoured to have been caused partly by concrete quality problems. Flamanville (France’s own EPR) is well behind time and over cost and also has valve design problems (Economist 3rd Dec. 2016). Some 8 older reactors have been idle for inspection, 18 out of a fleet of 58 EDF reactors having been down at one point. Their workers in France have now been told that 3,900 redundancies are necessary. SAGE awaits the end April/early May EDF UK results. Maybe EDF Sizewell were wise, after all, to get Stage 2 through while the going was, well, not too bad...it now looks extremely serious.
* Times Business Feb 2th 2017 Paris.
The RSPB has put out a short, very careful press statement and a much longer and, we think, very important statement. The focus of concern is natural water availability and levels, coastal erosion on Minsmere’s frontage and direct disturbance for bird habitats, mentioning marsh harriers, and species of waders and waterfowl. The last line is that the Stage 2 information provided about coastal defences and coastal structures by EDF is “not detailed enough” to give confidence “that damage will not occur to Minsmere’s coastline”.
Their long response - 13 pages - concludes, like the local councils and SWT and others, that the level of information provided by EDF is not sufficient to judge impacts, that mitigation measures are not identified for assessment, that there is no commitment to best environmental standards or full considerations under Habitat regulations. Further, that the SSSI damage, and its increase in size, and the compensation project at Aldhurst Farm are of great concern, in part because of disturbance from the main site layout, transport and the off-site developments. It ends with string of concerns about tourist accomodation and “changes to character” on the Minsmere reserve. It is all cautiously worded, but it is comprehensive and targeted, awaiting the EDFE Evidence Plan (for the Environment Report), demanding full details of assessments on plan features and clearly disappointed.
The response makes clear that the RSPB nationally are not supporters of new nuclear power. Their opposition to government nuclear policy at the time of the original policy debate was not successful, so they argue that the battle to defend Minsmere must now take place within the terms of the planning process and regulatory standards. So, like the Suffolk Wildlife Trust, they are now probing the precise meanings of the duties of the national planning body in relation to the “mitigation hierarchy” of “avoidance, mitigation and compensation” and whether this applies to single issues in the project or the whole project etc. They also indicate that any damage to an SSSI needs to be seen as a challenge the whole category of SSSIs across the UK, so that it is not just local issue. There is overall a meticulous targeting of environmental impacts, and rejection of EDF’s offer to do only what is “practical”. They say this does not meet regulatory requirements.
Suffolk Wildlife Trust have got off the fence after four years of the most minimal public concern and assumption that the project’s nature issues can be dealt with. This is certainly how many people have seen their stance to date. Now, despite their closeness to EDF, they have produced a good, lengthy and professional response. Lots of worries, well worth a read. They follows RSPB concerns, and express overall “serious disappointment” at Stage 2. They appear to be questioning whether the mitigation hierarchy is a simple sequence, or whether each stage has to be be proven by assessment in its own right. What this means is that EDF offering compensation for damage to SSSI’s and other protected sites may not be a proper - lawful? - response. Proof that there is no alternative site design or other project solution has to be demonstrated first. Also, like the RSPB, they question EDF’s notion that mitigation measures can be avoided because they are not “practical”. Both the RSPB and SWT now seem to be saying between the lines that the project is not possible at this site without unacceptable damage to nature. It is not flag waving, but it is a very serious position to take up within the terms of the planning process.
The AONB next. Well, having agreed a big “landscape criteria” document with EDF just before the Stage 2 consultation, they nevertheless - and very obviously - feel put out that the AONB’s interests don’t get much status or respect in the EDF report. Worth a read too. Both the RSPB and SWT note that national regulations require the defence of AONB status in general as well as at Sizewell. This view echoes the arguments above about the SSSI’s status. Clearly these three bodies fear a domino effect if EDF aren’t held to high account here and now.
The Anglian angle? The East Anglian Daily Times occasionally does a useful job reporting nature and environment developments, devotes a lot space to the culture of nature, but in the main backs EDFE and avoids the policies and politics of the Sizewell threat. However, their recent editorial calls for “transparency and talking” recognising that something is stirring. But it won’t step out of line. We further quote “the prize (of Sizewell C) is too great to let slip away”. And “our local economy will be grateful for generations”. That begs lots and lots - if not all of the questions. So yes, lots more transparency and reporting including on the downsides, and hopefully also “talking”. And listening too. And publishing more letters opposed to Sizewell C on grounds that carry some weight of argument as well as principled positions. Transparency and talking are all part of proper public debate, so watch the Anglian carefully. Meanwhile it should be noted that EDF does not engage in debate, as a matter of policy. Only presentation, and well, very unsatisfactory consultation.
TASC (Together Against Sizewell C) are opponents of the Sizewell C project. Their evidence is very well informed about the range of local impacts, especially on the Leiston area and focussed on those which violate nature protection and amenity regulations. They cover the full range of EDF Options issues. TASC have successfully established the idea that Suffolk is not “suitable” for this project, a reflection of the formal planning criteria which are supposed to operate.
Friends of the Earth Suffolk have produced cogent evidence with a particular stress on shore line flooding and water level issues threatening wildlife and habitats. They are principled opponents of nuclear technology, have been doing water level and coastline research and pursuing nature protection issues, arguing that the vast “mosaic” of nature habitats affected face catastrophe.
TEAGS, representing villages and residents around the prescribed B1122 access road to Sizewell from the A12 have sent in a professional and detailed response. Their press release expressed strong and prolonged anxiety, and “slamm(ed) EDF for ignoring local concerns”, and “expressed profound dismay”. While having local concerns and not being opposed to the nuclear project as such, they have broadened their concerns to the social effect of the worker campus and the threat to Minsmere. Their evidence reflects a common theme of concern that EDF have not completed assessments or justified positions or released information. Most importantly for them, EDF have no mitigation strategy of any significance for the huge traffic impact during the construction period, and seem to have downgraded the B1122 impact. Nor is there any credible solution to the double road junction problem at Yoxford. TEAGS continue to cooperate with the B1122 Group and the Minsmere Levels Stakeholder Group and mounted an impressive exhibition.
The B1122 Group continue to campaign for the D2 road idea, coming off the A12 below Saxmunden and going across country direct to Leiston and Sizewell. This is not a widely supported idea, is firmly rejected by EDF, and regarded as unrealistic by the two Councils. It would not resolve the four villages problem on the A12.
SAGE will be looking at Yoxford’s response, after their lively meeting addressed by SCC Councillor Guy McGregor who produced the joint Council’s report. Wickham Market, with a Park & Ride on the A12 and their cross Suffolk access roads, are angry at the forecasts of a huge volume of traffic which they have had to dig out of the EDF report. CANE, the Campaign Against Nuclear Energy, a long-standing local group, have also submitted a response. The Minsmere Levels Stakeholder Group’s views are being sought too. The SAGE response is already on our website.