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Investing Taxpayer's Money in Nuclear Power

After decades of refusing direct investments in nuclear energy projects, Theresa May's conservative government plans to invest in a plant in Wales.

Image: PixabayImage: Pixabay

With the Brexit things have gone haywire in the UK. Latest development: The government apparently wants to give up a decade old principle of British politics. Until now, investing taxpayers' money directly in nuclear power projects was considered a taboo.

But this could soon come to an end, as the Secretary of State for Business, Energy and Industrial Strategy, Greg Clark, announced on Tuesday. According to his statement, the government is considering participating in the construction of the new Wylfa Newydd Nuclear Power Plant on the island of Anglesey in Wales with more than £5 billion. Initial negotiations with Hitachi, which owns the construction rights to the plant, have been successful, even though no final decision has yet been taken. “For this project the government will be considering direct investment alongside Hitachi and Japanese government agencies," says Clark according to the Guardian.

This decision marks a significant change in British energy policy towards explicit state investment in energy projects, which should further burden the island's energy market already heavily distorted by state intervention. In times when solar and wind energy can operate at a price level with fossil fuels, this turnaround comes as an incomprehensible surprise.

Representatives of the renewable energy industry were horrified by the announcement. Chris Hewett, CEO/Solar Trade Association (STA) said: “When Hinkley Point C [Note: British nuclear plant, currently under construction] was given the green light three years ago, we pointed out that the UK solar industry could already supply clean power at half the price. Since then, solar prices have fallen even further, and storage technology is commercialising rapidly. Today solar combined with energy storage can provide low-cost, flexible power whilst supporting a smart energy pathway the Government’s own analysis shows can save consumers billions of pounds."

Solar and wind prices have fallen sharply in recent years (Image: K. Radtke)

Solar Trade Association states that the announcement comes at a time when the solar industry has been waiting for more than three years for access to competitive UK clean energy auctions to offer electricity at wholesale prices. At the same time, the construction of solar rooftop plants in warehouses and factories has been blocked by paralyzing interest rate hikes, although these plants no longer require state support. Investments in nuclear power represent a much higher economic risk in times of rapid technological change through renewables, digitisation and storage.

According to STA, the cost of solar power in the UK has fallen by around 20% per year since 2014 to around £50-55/MWh. Various media reports quote that a price of £77.50 was agreed upon with Horizon Nuclear Power for the 60-year term of the nuclear plant.

The government's deliberations are likely to cause renewed concern in the UK. The unclear economic situation after the Brexit and urgently needed investments, for example in the country's health sector, contrast with billions of pounds to be invested in a technology that is definitely no longer competitive in the energy market. And isn't there a further little something to consider? Like the risks of nuclear power in general, the unsolvable problem of what to do with nuclear waste and the meaning of that to further generations? Let's hope that the British public will show at least a tiny little grain of the enthusiasm against these plans that they had for their latest royal wedding.

Katrin Radtke
UK, nuclear power, investment, government, Brexit, solar, wind, renewables, nuclear power plant

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