The Labour frontbench has put down an amendment to the Nuclear Financing Bill which would stop the automatic reimbursement of EDF for excess construction costs of the planned Sizewell C nuclear power plant. The amendment, put forward by Shadow Green New Deal and Energy Minister Alan Whitehead, has been defeated by the Conservative majority in the Commons, but will soon come up for a vote in the House of Lords.
The Nuclear Financing Bill sets up a so-called Regulated Asset Base (RAB) means of funding nuclear power. This means the constructors would be be paid for the construction costs before the plant was generating anything. It would save the constructors money whilst making the project a lot more expensive for the energy consumer in the (most likely) event that the project experienced considerable cost overruns.
Although the SNP has also put down useful amendments to make the Government publish details of the costs of the project, Labour’s proposed amendment is potentially significant in that it could, if taken literally, dissuade EDF from moving ahead with any deal to build Sizewell C. As Whitehead told the Commons, analysis of historical experience of building nuclear power plant it is a near certainty that there will be cost overruns on the project.
In fact Whitehead implied he was not trying to stop the project, but merely argued that cost overruns should not automatically be added to consumer bills. If there were cost overruns then the Government could find the extra money to pay for the project from some other source.
Amongst other things, the SNP amendments asked that the Government should have to make public whether Sizewell C was being given a guarantee that its generation would be paid a minimum price for each MWh produced. Labour also sought to block nuclear power plant being owned by foreign companies, although it was argued this would not affect Sizewell C.
Labour joined forces with the Conservatives to vote through the Bill on the Third Reading, with the SNP, the Liberal Democrats and the Green Party whipping against the Bill.
It ought to seem strange that at the very time there is concern about increased energy bills and strident calls to cut back on green levies from some Tory MPs, the very same MPs are unquestioningly voting through a piece of legislation that will add substantial sums onto consumer bills. EDF has said that Sizewell C will cost £20 billion. Considering that interest charges and also cost overruns will have to be added to this sum the total cost may very plausibly amount to £30 billion or more – and that represents more than £1000 for each household in the UK.
The amount of energy generated by Sizewell C will only be of the order of the next tranche of renewable energy projects (to be issued in the coming moths) that will cost the consumer effectively nothing. By contrast Sizewell C will likely not even be seriously begun until Hinkley C is completed (2027?) which means a 2035 or later start. The UK could have deployed a lot more renewable energy by then of course at much lower cost. The current nuclear crisis in France demonstrates how unreliable nuclear power can be.
Bill Bordass, Research and Policy Adviser for the Usable Buildings Trust said: ‘Surely the only sensible way to curb Sizewell C is to scrap it entirely? It is just good money after bad.’
The Commons debate details can be seen here. The House of Lords is due to vote on the Bill in the coming days.