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TASC Bulletin 3 - October 2015

Nuclear policy: new twists and turns?
A lot of strange are things happening in Government energy policy. First Chancellor Osborne in China announces £2 bn loan guarantees, presumably to secure capital from the two Chinese companies who are supposed to invest in Hinkley and Sizewell. Then it is added that the Bradwell Essex nuclear site –owned by EDF as are Hinkley & Sizewell – will be sold to the China companies for their own design nuclear plants. It emerges that there are no more investors for the missing 10% of capital for the £25bn Hinkley project, so the China/EDF split is now revised to 60%/40%. We observe, and it’s correct, that £2bn insurance is not much cover for £25bn, and note the Brussels figure of up to £17bn for associated costs in its OK letter to the UK re Hinkley. Then the Treasury press statement admits the £2bn is the first slice…… All this is to preview the China Premier’s visit this month to sign up for the full Monty deal.

Then comes Tory Party conference: aside from the comedy of Energy Secretary Rudd attacking subsidies as wrong for renewables (because they are doing so well, if not too well) and forgetting that Hinkley’s strike price of £92.50 per megawatt hour is a massive subsidy, Chancellor Osborne then announces the new Infrastructure Commission for high speed railway, airports and interestingly - and “new generation nuclear power” (Guardian 5.10.15).

The new commission, which they say needs a statutory basis (taking Parliamentary time) will apparently decide “priorities” for government policy and support funds. Headed by former New Labour academy schools and high speed rail proponent Lord Adonis (one of the inventors of the political concept of ‘deliverology’), can it mean that there are still big problems for Hinkley ?

Not strategic, but it looks like Rudd’s DECC Department is heading for the big political dustbin: maybe lots of Press releases and silly speeches and ideas (decorating nuclear power stations to make them attractive), but power on energy problems has shifted to the Treasury who have then pushed it sideways to Adonis. Not an impressive narrative.
Other indicators of confusion in the ranks came from UK EDF chief Vincent de Rivaz who was given space in the nuclear sceptical D.Telegraph to explain that ‘our lights’ i.e. ‘his’ lights, would go out without the French nukes, that the cost was only £16bn, not £25bn and all was going well with the new China money.

Then the real EDF chief in Paris, Jean-Bernard Levy (D Telegraph 24.9.15) says investors don’t trust the EPR model which EDF UK and the Government have agreed for Hinkley and Sizewell, and that EDF will not build any more in France. They have only one at Flamanville, which is over time and over cost etc. and await a new (fourth) generation of smaller flexible reactors, which is where their futures money is going. Meanwhile, as a stop-gap, an “upgraded EPR” for France would be available in 11 years time.

The difference of business outlook and model between EDF France and EDF UK makes a certain sense. EDF UK returns about £750 million profits every year to Paris, paying only around £50m tax to the UK Treasury. It’s one of the UK’s ‘Big Six’ energy companies under pressure for rip-off tariffs. Going ahead with Hinkley and Sizewell risks eating up this profit as overall Europe develops a more competitive and integrated energy market amidst falling global energy prices, putting big pressure on parent EDF in France. TASC Bulletin 2 reported briefly on National Grid CEO Steve Holliday’s recent analysis, which is key infrastructure background. We now have more detail.

STOP PRESS: Times newspaper (3.10.15) reported that Moody’s and Standard & Poor’s international credit rating agencies have warned EDF risks down-grading (making loans more costly) if it carries on with Hinkley. And that the 2 Chinese companies only want at the very most a 30% share between them, and maybe even that is of the lower overall capital cost figure. The promised final agreement on funding from the China Premier’s visit this month now looks like yet another ‘framework’ agreement.

Revolutionary times for base load electricity ? National Grid chief Steve Holliday (Energy Post 11.9.15) says the idea of big power stations for base load is ‘outdated’. There will a big shift to baseload being provided at consumer/community level, with the national grids specialising in flexible back-up for peak load and wind/sun/wave deficiences. Consumers no longer want big one size fits all, and the technology is changing fast to allow this to happen. The world is moving towards ‘more distributed production and microgrids’. ‘If you have nuclear power in the mix, you will have to think about the size of these plants. Today these plants are ‘enormous’. Well, this sounds like the horse’s mouth, and not good news for long-life, massive, inflexible nuclear technology.

Official Suffolk still doesn’t get the message: Here in Suffolk EDF spokesman Tom McGarry at a Parishes Liaison Group meeting a fortnight ago was more than usually wishy-washy about when a second consultation might start for Sizewell C&D. Our impression is that local politicians and local EDF managers are not really up to speed about either the big economic picture, or the new electricity production models or the new infrastructure planning scenario. They assume Sizewell C (&D) is inevitable. TASC believes this is far from the actual case.

Meanwhile, locally: (1) Suffolk County and Coastal District councillors are confidently going to spend £500,000 investigating the four parishes bypasses and, after a visit to the still not finished EDF Flamanville site, nevertheless think they might be able to find money for EDF’s construction roads by borrowing on EDF’s future business rate to help build the roads and bypasses, as happens in France, a very different country. Different, crucially, because EDF is 90% state owned for a start. Also, EDF Sizewell doesn’t seem to pay business rates for the site to SCDC, only for a Leiston office. Power generation is Class 1 for business rates, which means, we think, special offsets, but where is anything paid in any case?

Meanwhile (2) Tory conference announces new local powers over business rates but only if councils go over to executive mayors. EADT newspaper is starting to carry letters concerned about council mergers and executive mayors. It all sounds like a stitch up until you know that Lord Adonis’ Infrastructure Commission, part of the Treasury, will have a fixed pot of money to decide all the pressing infrastructure priorities, making unpopular decisions which will not stick directly to Mr Osborne’s coat-tails. Can Suffolk politicians and planners really think a national priority will be to spend/borrow maybe up to £150 million to ease EDF along and then impose it on local businesses, with some on household charges too, no doubt?

Meanwhile (3) what the parish reps and audience said was very tough about the extent of traffic problems, road routes and confidentiality. It was pointed out forcefully from the floor that a perfectly reasonable traditional planning case against Sizewell C&D could still by be mounted by SCDC & SCC since the law required only 7 out of 8 ‘suitable’ nuclear sites. There was nothing inevitable about the project, and no need for close partnership or support from the elected councils.

Foreign Policy Think-Tank warns about nuclear ‘cyber’ threats: Chatham House, one of the world’s most serious foreign policy centres in London has warned that nuclear technology is now so computer based that it is asking for cyber trouble. Who would do that? Well, they say No 1 world cyber hacking nation is China for commercial reasons. Oh dear ! Sizewell will be – is planned to be 40% (or 30%?) China owned, and Bradwell 100%...wake up Suffolk and Essex ! Maybe they won’t hack themselves, but it looks too close for comfort.

Planner watch – a TASC task: since no-one, to our knowledge, has yet tried a head-on legal challenge to the draconian national infrastructure planning law which started with the 2008 Planning Act and especially the decision-making balance – if any - between traditional local planning powers and the new national powers, TASC is watching Suffolk planning decisions closely. This is focussed on environment, amenity and suitability (appropriateness) issues, especially where wildlife and protected sites are concerned. We would appreciate information about experiences, because we fear that national planning and environment regulations are violating Europe’s wildlife protection principles through bad UK aoolications of EU Directives. The bodies one would expect to be active about these problematic areas are, sadly, rather quiet, to say the least.

Suffolk Wildlife Trust AGM: Three new trustees for three vacancies, no apparent mention of Sizewell – except some work on the beach -or Aldhurst Farm, but the 8 page glossy Annual Report confirms EDF is top ‘Platinum’ overall sponsor.

Amber Rudd still too busy to reply to TASC ? Our Committee is discussing next steps on the statutory duty to review energy policy- given all the other events reported above, maybe she doesn’t know what to say.

Talk & film show by Pete Wilkinson:
“A Life of Environmental Campaigning”
All welcome- a public meeting

Watch the TASC website for dates of meetings and events