Thursday, 21 April 2016

Hinkley C nuclear waste costs: Rudd assertions strange, misleading and untrue

Energy secretary Amber Rudd (‘ Hinkley Point C and the UK’s energy needs,’letter, 21 April excoriates The Guardian for what she describes as “strange claims” made in your article “Minister: Hinkley no risk to power supply, which reported on a letter she recently sent to the chairperson of the energy and climate change select committee on the future of the proposed the Hinkley C nuclear power plant

“You also asked about what liabilities the Government would face if the project were to be cancelled at this stage, either by the UK or French Governments. At this stage, as no contracts have yet been signed, there are no liabilities which would fall to the UK taxpayer or consumer. (emphasis added) Once the contracts are entered into, all risk is borne by EDF, except in the case of a narrow and extremely unlikely range of circumstances such as a political shut down or a change in law (as described in the minute I laid before Parliament in October last year), which are almost entirely within the control of the UK Government.”

As the Cabinet minister responsible, she should know this statement is both untrue and highly misleading

In particular, British taxpayers will be ultimately liable for picking up a predictably significant extra tab if the fiendishly complex method of costing and paying for the long term nuclear waste management liabilities by the applicant to build Hinkley C, ie EDF Energy, turn out to be underestimates.

This process began almost exactly eight years ago (on 17 April 2008) when Ms Rudd’s predecessor department  for Business, Enterprize and Regulatory Reform (BERR)
convened a  round table stakeholder consultation meeting to examine  the draft Funded Decommissioning Programme: Guidance for New Nuclear Power Stations. Substantive Issues.(

In my view,  the consultation paper  was actually a spurious exercise, presenting biased guesstimates as real analysis, with a pre-determined end-point, which has the substance designed to fit a questionable conclusion.

The most accurate statement in the entire document is found at section 5.1.3, where it says” It is important to be cautious in estimating total costs as there are considerable uncertainties in a number of areas.”

This should be contrasted with philosphy adopted in the Fixed Unit Price (FUP) or Expected Fixed Unit Price (eFUP) - the key concepts developed in the paper-  which will allow the polluter ie the creator of the radioactive wastes, to have their costs capped, and any additional costs will be met by future taxpayers, who, incidentally, will not even have been the beneficiaries of the nuclear generated electricity which gave rise to the waste. This is thus an open-ended, unquantified taxpayer subsidy.

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