Challenge to the City: new British Nuclear Corporation urgently needed
An article in the Business Section of the Times of 7th May 2012 was headed “Soaring costs threaten nuclear plans”. It is important to realise that this refers only to the French-designed Areva EPR 1600 model of reactor favoured by French state-owned EDF Energy, who have “undertaken” to build and commission two such reactors at Hinckley Point in Somerset by 2017.
As this is now quite impossible, whatever undertakings the Department of Energy & Climate Change have offered EDF and their minority partner Centrica in the venture are now completely void and Britain must adopt a completely new nuclear strategy which keeps ownership and construction in British hands – which should have been done in the first place.
The costs being quoted by EDF (7 billion per 1.6 GW reactor or £4,300 per KW are clearly designed to frighten the British government ahead of its forthcoming White Paper on Electricity Market Reform (the Queen’s Speech 9th May) into offering EDF an even greater level of subsidy than heretofore contemplated.
It is demeaning for any British government to rely on foreign owners and operators for something as absolutely vital for our survival as energy supplies. First the German companies E.ON and RWE have withdrawn, now the French EDF is virtually gone. EDF is hooked into the French-designed Areva EPR 1600 reactor, of which what are essentially only prototypes are being built at Olkilnoto in Finland and at Flamanville in France. Both are 3-4 years behind schedule, in dispute with their customers, and 50% or more over budget. Areva itself is in deep financial trouble, asking for its shares to be withdrawn from the French Stock Exchange last December.
Need for a new British Electricity Generating Company
Britain needs to establish a wholly-owned British Nuclear Corporation charged with building up to 10 new nuclear power stations over the next 20-25 years using the Westinghouse 1.1 GW AP 1000 design (which until Gordon Brown foolishly sold Westinghouse to Toshiba, we used to own). The forerunner of the AP 1000, which is the only viable system in the world, has been working steadily at Sizewell in Suffolk for the last 16 years, six of the current AP 1000 designs are under construction in China on time and on budget, the US regulatory authorities have granted a construction and operating licence for two new AP 1000 units in Georgia, and the UK authorities have granted interim approval as well. Westinghouse has retained British engineering personnel at their site at Warrington in Cheshire waiting only for final approval of the AP 1000 design when a definite customer appears in Britain. The Westinghouse cost estimates based on actual experience are in the region of £2,800 per KW.
Challenge to the City’s much vaunted capital raising abilities
There could be no more growth-generating, value-adding project than such a programme. The cash for this could easily be raised in stages for 25 year gilt-edged bonds at around the current rate of 3.5% which, with a suitable discount along the lines of the BT and British Gas privatisations, a large proportion of the British public would participate in and therefore own at least part of the resultant electricity generating stations. Here is something of vital national importance in which the City could demonstrate its value to the real British economy and help keep its own lights on as well.