How bankrupt US nuclear financing schemes are going to be used to fund nuclear power in the UK

As different types of corrupt pro-nuclear handouts in the USA unravel the British Government is expected to support bringing in a legalised version of bankrupt US nuclear financing practices to fund Sizewell C nuclear power plant.

The US nuclear power industry is in danger of implosion as corrupt practices used to maintain its old power plant and pay for new plant are the subject of prosecutions. In Ohio the Speaker of the House of Representatives has been arrested on account of charges that he was bribed to ensure that nuclear power and coal plant in Ohio were given bailouts whilst policies supporting renewable energy and energy efficiency were cut back.

Meanwhile in South Carolina the Securities and Exchange Committee has charged executives of the State’s monopoly utility with fraud after the abandonment of two of the only four nuclear reactors  whose construction has been started in the USA this century. According to the Wall Street Journal: ‘The defendants claimed the project was on track even though they knew it was significantly delayed and wouldn’t be completed on time by Jan. 1, 2021, to qualify for $1.4 billion of federal tax credits, the securities regulator alleged’. In the process the electricity consumers were charges billions of dollars for the power plant which were not built through a similar cost recovery process that is proposed for the UK.

Over to Florida, and while nobody has been charged with any offences there is great controversy over the way the dominant state utility has charged the electricity consumer for a nuclear power plant that was never built. In this case they never even got as far as breaking ground, but the consumers had to pay out  $871 million as well as lots more money for other bungled projects relating to nuclear energy. Florida, like other US  states has simultaneously erected huge barriers stopping homeowners (in the so-called ‘Sunshine State’) from putting solar panels on their roofs.

According to the New York Times: ‘Florida is one of eight states that prohibit the sale of solar electricity directly to consumers unless the provider is a utility. There is also a state rule, enforced by the utilities, requiring expensive insurance policies for big solar arrays on houses’.

Meanwhile in Georgia, the third state to use the cost recovery method for financing nuclear plant, the only two nuclear power plant being built in the USA (Vogtle III and IV) are hopelessly delayed with massive cost overruns, again, yes you’ve guessed it, with costs paid by electricity consumers.

Of course all of these real or abandoned nuclear plant were financed under the so-called Regulated Asset Base (RAB) model that is being slated to pay for Sizewell C in the UK. This is hailed as a much cheaper way to pay for nuclear power compared with the way that Hinkley C is financed. Cheaper, for the developer (in this case EDF), certainly, but for the electricity consumer it’s a disaster! The consumer, as the US experience clearly illustrates, starts paying and continues paying for a nuclear power plant long before it is generating any energy, and there is no guarantee even that it will ever generate anything! But the consumer still pays, no matter what the constructions cost overruns turn out to be! And invariably, with nuclear power plant, there are very large cost overruns.

Added to this of course the bias in favour of new nuclear as opposed to new renewable energy schemes is also assured. The contracts nuclear power are being given assure them that they will get paid the premium price for energy generated even if wholesale electricity prices are negative whereas windfarms and solar farms will get nothing in such circumstances. See our report on this. Of course there’s nothing illegal in this because mountains of impenetrable contractual and accountancy paperwork make it so. It is just written by the the people who have the energy establishment’s interests at heart.

Post written by David Toke