It’s not just Brexit and Brexatom (exit Euratom) or even the failure to mention any energy issues other than the deliberately vague consumer price caps for electricity and gas in the Queen’s Speech. Maybe energy fundamentals are moving too fast and furious all over the world, against the direction of UK energy policy, making the UK, in reality, more a policy-taker not a policy maker.
The continuing contortions of EDF remain central. Their Paris chief Vincent de Rivas is to step down, after promising Parliament and the House of Lords that they would be ready to”pour concrete” at Hinkley C in 2019. Clear enough until this month CEO JB Levy has declared that they are already pouring concrete in 2017 for infrastructure, while also admitting that Hinkley C will now be a bit longer in build than previously stated and, yes, nearly a couple of billion pounds more in cost.
The start-up “leap backwards” may have something to do with UK conditions in the contract: that Flammanville operates by 2019, and that Hinkley C operates by 2033, this latter date distant but not incredible. EDF’s woes include, acutely, a bizarre short-life fix for Flammanville (see below).
Meanwhile the Audit Commission has blasted the Hinkley deal (see below), Toshiba as the main developer of the Sellafield Moorside new nuclear project has withdrawn from all nuclear involvement, and government infrastructure plans are silent about big nuclear.
Can S Korea’s KEPCO now do this failed job? And what is happening at Wylfa, Anglesey: all quiet and a furious search for outside investors seems to be the scene. Meanwhile, China’s CGN is presumed to be proceding with its Bradwell project for its own reactors.
The environmental issues about new nuclear are also emerging as a key safety and suitability issue, because of Brexit.
New cabinet member for the environment, Mr Gove, wants a “bonfire” of EU regulations, while Mrs may has promised simply to transpose EU environment laws ( including nuclear) into UK law until there is time to revise them later. Few commentators believe this, it has to be said. Notably, the Environmental Law Association has called, like the Green Party, for a new strong UK environmental commission to be established.
Why out of Euratom?
Professional opinion and comment seems to recognise how serious this decision has become. It seems more set in stone than even the big customs union and single market issues. The essential Brexatom question is why on earth might government think there can be any benefit from it? It will impede nuclear fuel trade, and won’t avoid “red tape” because the UK is still under the International Atomic Energy Authority’s rules. It will most likely mean Europe won’t buy UK nuclear electricity even if we ever happen to have a surplus. But there is a back story, as so often.
About three years ago, when money from China for EDF’s Hinkley C and Sizewell C projects became necessary, the UK’s Office of Nuclear Regulation (ONR) was repositioned as an independent UK Government “agency”, removing it from the genuinely independent and powerful UK Heath & Safety Commission. New ONR terms of reference required its safety duties to be aligned with market sensitivity, i.e. not “safety at any cost”.
This shocking move may have upset Euratom, but there is no public sign that the UK is being pushed out of Euratom. European nuclear standards may not be sufficient, if even the highest standards could ever be acceptable for inherently dangerous nuclear power. But they are higher than elsewhere globally, and Europe was the main mover and shaker about new safeguards after the Chernobyl and Fukushima nuclear disasters.
Germany has rejected nuclear power, and even France is phasing down. Europe has also raised its safety monitoring rules requiring, in a 2013 Directive, peer group review of European countries’ rules and reports and inspections. The UK seems to have done nothing about transposing this directive.
All of this may help explain Brexatom, and is “fit for purpose” because the UK’s new nuclear project is now overwhelmingly in non-European global hands.
After Brexit, even France will be simply be a global investor, free of European rules for its UK operations, if not in France. It is not just China’s nuclear companies who have wanted to grab a slice of the UK nuclear new-build market.
South Korea’s KEPCO are in the frame now at Sellafield for their own reactors, and if EDF’s EPR doesn’t deliver, the UK government might want to go all speed ahead with KEPCO elsewhere. They have already OK’d China CGN’s own reactor for Bradwell.
Out of the EU (and Euratom) the UK Government would be free to subsidize new nuclear, rush through regulatory design approvals, backed by a newly constrained and toothless ONR. So is Brexatom such a surprise after all?
Audit Commission (Parliamentary Watchdog) Second Nuclear Report on Hinkley C says it is “expensive” to taxpayers and consumers and a “risky” project in any case.
The key media word for this report, used by the local Anglian/EADT paper too, was “slammed”. Odd for normal government supporters, but the fact is that the dreadful popular (right-wing) newspapers don’t seem nuclear-friendly at present. Maybe it’s just that EDF is, after all, French and European.
EDF in Suffolk rushed to say that Sizewell C would be cheaper than Hinkley C, hardly reassuring if safety corners are to be cut, or the workforce sweated, or poor quality concrete poured.... Maybe it is a tacit admission that only Hinkley C would ever be subsidised. Or maybe it is more subtle, implying that the cost of a Sizewell subsidy could be lower.
The fact is that the Audit Commission has definitely “slammed” the Hinkley C project, in its second report on new UK nuclear power plans (presented to Parliament June 2017, following the first report in July 2016).
The report bears examination, not least for charting the whole sorry Hinkley C saga, which started in 2006/7. It is an excellent factual guide. Facts revealed are: if it were ever to operate for a full life, EDF believe it would produce a total net profit by 2085 of £80bn. Most of this would come through the heavily subsidised “strike price” at twice the current expected long-term wholesale electricity price. That’s a very big subsidy, but it is still not enough to fully pay for decommissioning and nuclear waste storage etc.
EDF’s immediate response from Paris was to admit that the Hinkley C project’s costs and timetable were subject to a “full review” (Times 27 July). It emerged this means two more years late, that is, 2027 not 2025 to be up and running, which no-one really believes. And then the delays will cost an estimated extra £2.7bn on top of the current £18bn estimate...