It's money that has stopped nuclear power, not planning problems

Of all the nonsense about nuclear power that one hears, the idea that somehow it is planning problems rather than financial issues that stop its development surely takes the biscuit. The Government bats away any formal planning objection made to its nuclear plant when companies want to build them. Yet the UK government is flogging nuclear planning problems as a scapegoat for the technology’s failure for all it is worth. And it is talking about the non-existent concept of small modular reactors (see HERE). Is this a smokescreen to hide its problems with financing Sizewell C?

The real reason for the failure of the Wylfa project

There was a silly story published in most leading newspapers about the proposed Wylfa plant in North Wales being knocked back in 2019 because of ‘language’ objections (see HERE). The reality was that the proposal was scrapped for financial reasons. This involved the Government being unable to offer enough incentives to keep Hitachi interested in developing the project. In January 2019 the BBC reported that ‘Japanese tech giant Hitachi said it was suspending construction of the new plant in north Wales as the project's cost continues to spiral.’ (see HERE). The National Grid cancelled plans for pylons needed for the project (see HERE).

The reporting at the time failed to mention any planning issues, only the financial ones. Indeed, once Hitachi announced its withdrawal, that was the effective end of the plans. However, the company set up to make the planning application continued what looks to me like it was going through the motions. It didn’t matter that the Planning Inspector rejected the application. If the proposal was a real one (in an economic sense), the government would surely have overruled the Inspector without delay. -As indeed happened in 20122 with the planning application for Sizewell C.

By contrast, the recent coverage of the planning objections to the Hitachi proposal seems to completely omit any mention of the real reason why the project was abandoned.

Problems with the Government’s nuclear programme

Hitachi originally bought the ‘Horizon’ option from RWE and E.On. It consisted of the proposed development at Wylfa and another at Oldbury in Gloucestershire. RWE/E.ON had withdrawn from the proposal in 2012. This (Horizon) was one of three consortia set up in 2009 to constitute the Government’s new nuclear programme. This was announced by Ed Miliband in 2009 in his last manifestation as Energy Secretary.

The second consortium to fall apart, the so-called ‘NuGen’ consortium, was supposed to build a new nuclear project at Sellafield called ‘Moorside’. This consortium was originally owned by Iberdrola, the Spanish company and the French company GDF Suez (now Engie). However, they lost interest and the consortium was bought up instead by Toshiba in 2013. Then in 2017, Toshiba decided to ‘mothball’ the project. Again, financial reasons were always cited as the reason for this. Once again this had nothing to do with planning issues.

This left the third consortium led by EDF. They advanced their Hinkley C project. Eventually, they agreed the controversial deal whereby they would receive £92.50 per MWh over 35 years in 2012 prices, now worth over £130 power MWh in today’s money. They also agreed on a contract for Sizewell C so that if that went ahead as well both projects would receive £89.50 per MWh.

I knew at the time this was a bit of PR and that EDF would never go ahead with the agreement in respect of Sizewell C. They did not. Instead, they have agreed on a deal whereby, in effect, most of the costs, including the inevitable large overruns, will be paid by the British taxpayer or electricity consumer.

So, none of the privately owned companies originally involved in the British nuclear programme went ahead with the proposals. Centrica was also involved with the Hinkley C proposal at one stage, but it withdrew in 2013. Only the French-state-owned EDF has gone ahead with building a nuclear power plant, ie Hinkley C. EDF can carry on the construction. This is despite the mounting construction cost overruns. The French state pays!

Planning and paying for Sizewell

In effect, the French taxpayer is paying for a British nuclear power plant in the shape of Hinkley C. However, the French have said that this cannot happen again (ie they paying (most of) the cost overruns for a British nuclear power station). Hence Sizewell C will be funded mostly by the British taxpayer and electricity consumer, with the Brits taking the main liabilities, not the French.

The UK Government is currently arguing within itself and with EDF about how much Treasury funding the UK Government is going to put into the project. There has been a charade of looking for private investors. The only way private investment could be achieved would be for the investors to be effectively guaranteed their profits at the taxpayers’ or energy consumers’ expense.

Interestingly, in 2022 the Planning Inspector said they could not recommend the Sizewell C project without a more convincing plan to ensure a sustainable water supply. However, this objection was batted aside by the then Energy Secretary, Kwasi Kwateng, in 2022 (see HERE). This affair received little publicity because everybody knew that the Government could easily dismiss this problem, and override recommendations by Planning Inspectors. The Government saw no reason at the time to make a big deal out of it. After all, why would the Government want to publicise doubts about the water supply for Hinkley C when it wanted the project to go ahead?

Indeed in the summer of 2022, all the talk was on how to pay for Sizewell C. With planning consent having been sorted, Boris Johnson wanted to go full steam ahead and give the final go-ahead, something that did not please the Treasury. According to a report in The Times (see HERE) ‘Simon Clarke, the chief secretary to the Treasury……………. wrote to Johnson and Zahawi warning that a signoff for Sizewell would compromise the new prime minister’s ability to cut taxes or spend more on the cost of living’. Apparently, even Liz Truss did not want to take on the costs of Sizewell C.

But fast forward to February 2025 (with still no final go-ahead for Sizewell C), and the Government saw fit to make a very big deal out of a planning debating point regarding an already-abandoned project in Wales. Why? Maybe, I think to distract attention from the fact that it is the financing of nuclear power and its delivery that is the big problem. One can almost hear Sir Humphrey intoning ‘The public does not need to be overloaded with such details’. Otherwise, the politicians might stop blaming each other about things (eg costs of nuclear power) over which they have no control and focus on things that they do have some control.

Planning (or not?) for heat pumps

One thing that the politicians do control are the building regulations which could be making heat pumps and solar PV mandatory in new buildings. Alas, this has been kicked into the long grass by a press release a few weeks ago (see HERE). The Government has full control over the regulations, but it has given way to pressures from the construction industry. Yes, that is the same industry who are so keen on building nuclear power stations.