How new nuclear rips off its customers
By Linda Clare Rogers
A recent BBC documentary called Big Oil versus the World exposed the excellent job by oil companies in fending off what could have been an existential threat to their future, at the cost of one for the rest of us. The program revealed how the oil industry brought us near to catastrophe while knowingly lying about the role of fossil fuels in creating global warming.
There are vital lessons to be learned from this about the nuclear power industry. As with the oil industry, the nuclear industry continues to mislead us about the need for nuclear power to save the planet, in order to preserve itself. And, like the oil industry, it contributes to the catastrophe of global warming.
Nuclear power stations take too long to build to help mitigate the effects of global warming, and divert money from renewable power and other more immediate means of doing so.
To add insult to injury, we, as taxpayers, are now being asked to contribute to this catastrophe by paying for the building of yet more destructive nuclear power stations. The astronomical cost of nuclear power means that the industry itself can’t and won’t take on the economic risk.
Instead, money taken from our earnings and our benefits (in the U.K, low-income people on Universal Credit are not to be exempted), to set up new nuclear build, is meant to encourage other investors to take the risk in the future. This is before the plants are actually built.
The name of the UK government scheme , or, more accurately, scam, is the Regulated Asset Base model, known as RAB. (Editor’s note: In the U.S., a similar fleecing of ratepayers exists in some states, known as Construction Work In Progress or CWIP.)
In the introduction to RAB — the Ministerial Foreword to the Statement on Procedure and Criteria for Designation — we are told that the government will be taking one nuclear project to Final Investment Decision this parliament and two projects to Final investment Decision in the next parliament, including small modular reactors. The push for this scenario is undermining safety, fleecing the taxpayers at a time of economic crisis, and disregarding the real problems increasingly associated with nuclear power.
The Nuclear Energy Financing Act 2022 implements the nuclear RAB model and is meant to facilitate investment in the design, construction, commissioning and operation of new nuclear energy generation projects.
There are two criteria that government say have to be met in order that a new nuclear power project should receive RAB funding. But both of these criteria are largely meaningless:
Criterion one: the Secretary of State is of the opinion that the development of the relevant nuclear project is sufficiently advanced to justify the designation of the nuclear company in relation to the project, for instance, that the project has received a Development Consent Order (DCO).
Criterion two: the Secretary of State is of the opinion that designating the nuclear company in relation to the project is likely to result in value for money.
The government draft designation document for the two-reactor EDF project at Sizewell C in Suffolk, emphasizes these criteria. To fulfill the first, it is necessary that a DCO is approved, amongst other markers. The DCO contains evidence about the suitability of the proposed site for the project as well as the impact on the local community and its environment.
The Planning Inspectorate have advised that the DCO for Sizewell C be rejected. This in itself is really important news. Those of us who have been fighting against the building of Wylfa B, or Wylfa Newydd, are familiar with this scenario.
The Planning Inspectorate also advised the Secretary of State to reject the DCO application for Wylfa B. Many of the reasons were on similar grounds as those given for the rejection of the application for Sizewell C. The scheme broke habitat regulations and had detrimental impacts on biodiversity and the environment.
Notably, one of the main reasons for the advised rejection of the DCO for Sizewell C was the impact on the local water supply. We need only see what happened in France this past summer, with the shutdown of nuclear power stations due to the overheating of the rivers necessary for the cooling of the plants, to see that issues over water supply will only get worse as climate change gets worse.
So, for RAB funding to be designated, the DCO has to be granted. The Planning Inspectorate recommended it be rejected, and the government went ahead and passed it anyway. This is a profoundly dangerous decision and needs to be fought.
Hard on issuing the DCO will come the designation of RAB funding. The second criterion to allow for this will also be sure to pass: value for money for the taxpayer. The government explains that RAB will be eliminating significant compound interest on capital invested, thus saving us money. It makes the hopeful statement that, “the RAB model has the potential to reduce the financial cost for new nuclear projects, thereby reducing consumer bills while still preserving incentives for the private sector to complete nuclear projects to time and budget”.
Commentators have made it clear that the taxpayer will be liable for the inevitable cost overruns and the RAB scheme itself makes it even less likely that developers will keep within the bounds of their agreements, thereby further increasing costs.
The model has been criticized by two advisory bodies, the Climate Change Committee and the National Infrastructure Commission.
The draft document for the designation of RAB for Sizewell C would be laughable if it were not so serious in its implications and its precedent for further nuclear developments.
Under the heading —Results: Value for Money for Consumers — we are told, “this has been calculated by comparing the cost of the electricity system with and without Sizewell C….. The modelling compares the cost of an electricity system with a RAB funded Sizewell C against two different net zero compliant counterfactuals.” (These latter are the use of renewables and carbon capture and storage.)
It then provides a chart showing the costings and savings for the taxpayer. All that can be seen in each and every box are a row of the letter x. No figures at all.
When the chief executive of the Nuclear Industry Association, Tom Greatrex, was asked what he knew about the lack of figures available for the Sizewell C agreement on Radio 4, he could give no answer, but offered that RAB was a “different finance mechanism” that would allow for a very predictable price for electricity for a very long time.
This is another example of the nuclear industry and government getting together to present a false narrative: this one uses the present scandal of the cost of energy to persuade us that nuclear power can give us future security and control over future energy supplies.
It should be noted that Hitachi withdrew its application to build Wylfa Newydd for cost reasons, prior to the advised rejection of the DCO. The £5 billion offered by UK government to subsidize building that project was not enough for the Japanese company. This underlines how little risk developers are willing to take and how much risk government is happy to heap on us.
Another major issue with the RAB funding scheme is that, as government documents delicately put it, “the Secretary of State is aware that there could be a perception of a conflict of interest between his role in determining the DCO application for the Sizewell C project and his role in determining whether or not to designate the nuclear company. To avoid any perceived conflict of interest the Secretary of State will delegate the final decision on the DCO to another BEIS minister.”
Well that sorts that problem out then. Of course, while the taxpayer is paying for a nuclear project, it is unlikely to be halted by government. The overriding of the Planning Inspectorate findings against Sizewell C bears this out. How will the government not grant a Final Investment Decision, due next year?
Greenpeace has described the decision on Sizewell C as a stitched up deal behind closed doors, bringing extra cost to the consumer, producing unmanageable waste and squandering our capital on a white elephant scheme.
We say no to nuclear, no to RAB and will be looking to other allies and partners to fight this scheme. Maybe, like the Peace Tax 7, we can find ways to withhold our payments. Perhaps there are legal ways to stop the self -serving deceptions and corruption.
We need to keep calling out the UK government and the Welsh government on these deceptions. When so many people are in fuel poverty and it is so important that the best is made of our precious resources, it is criminal that our time and money is wasted and all our futures thrown away on the back of this scam.
Linda Clare Rogers is a member of People Against Wylfa B and CND Cymru.
Headline photo courtesy of Together Against Sizewell B.
The opinions expressed in articles by outside contributors and published on the Beyond Nuclear International website, are their own, and do not necessarily reflect the views or positions of Beyond Nuclear. However, we try to offer a broad variety of viewpoints and perspectives as part of our mission “to educate and activate the public about the connections between nuclear power and nuclear weapons and the need to abandon both to safeguard our future”.
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