Nuclear Power makes no economic sense

The steep global decline in reactor orders since 1986 has been a caused by poor economics as well as Chernobyl. No UK reactor was completed on time and budget. India’s most recent 10 reactors have averaged 300% over budget. The Finnish reactor – the first in Western Europe since Chernobyl – is three years late and 75% over budget.

A 1995 Tory review decided against further nuclear subsidies. Blair’s first Energy Review in 2003 concluded economics made nuclear an “unattractive option”, and industry cost estimates were extremely optimistic. But a huge lobbying effort went into overdrive, and despite the fact cost uncertainties had not reduced, Blair’s second Review gave new reactors the go-ahead.

US utilities and Wall Street agree reactors will not be built without massive subsidies, so the US Government is offering billions of dollars in loan guarantees. Investment company, Citigroup, says nuclear needs huge public subsidy. The National Audit Office doubts reactors can be built without and points out that if operators cannot pay their waste costs, taxpayers will be liable. So how can the UK Government claim reactors won’t need subsidies?

What the Government considers a subsidy “is very different to the usual definition”. Nuclear already enjoys a host of hidden subsidies, such as a limit on insurance required in event of an accident. And new subsidy suggestions include setting a floor price for carbon or obliging utilities to buy a certain proportion of nuclear electricity. Both would represent a substantial distortion of the market.

Tackling climate change is urgent. We need to spend limited resources effectively. The excess cost of a new reactor compared to energy efficiency and renewables is estimated at $19–$44 billion. So nuclear will worsen climate change because each pound spent is buying much less ‘solution’ than if it were spent it on efficiency measures.

Pete Roche

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