Threat to Westminster nuclear plans as French constructor looks set to pull out


By a Newsnet reporter

Doubts have been raised over the viability of the UK Government’s nuclear policy following claims that the French construction company EDF may be about to pull out of the UK nuclear programme in order concentrate on France’s domestic renewables sector.

The claims follow the recent French elections and the instalment of Francois Hollande as the new French President after the defeat of Nicolas Sarkozy.

France currently relies on nuclear power for 75% of its electricity, a figure Hollande wants to reduce to 50% by 2025 with a greater focus on renewables.  There has also been talk of phasing out France’s nuclear power altogether within 20 or 30 years.

Speculation is now high that the French Government will order energy company EDF to divert billions of Euros, intended for new UK nuclear reactors, back into the French domestic sector.

Such a move would all but kill off the UK Government’s nuclear policy and would mirror moves by the German groups E.ON and RWE, which said in March that they had scrapped their UK nuclear new-build plans.

The election win for Hollande was a diplomatic disaster for UK PM David Cameron who publicly endorsed Hollande’s rival Nicolas Sarkozy in the run up to the election.

Cameron backed Sarkozy in February and compounded the move by then snubbing Mr Hollande when he made a recent trip to London, the Tory leader preferring to meet Labour leader Ed Miliband instead.

Mr Cameron and Mr Sarkozy also recently signed a deal which would have seen French firms build the next generation of nuclear power stations in the UK.

The rumours of a possible pull-out by EDF coincides with news that costs of building any new nuclear plants have increased by forty per cent.  The industry has struggled to re-assert itself following the disaster at the Fukushima plant in Japan.

New safety, construction and administrative costs have led to estimates escalating, The Times reported last week that the cost of the first two reactors set for Hinkley Point in Somerset have risen from £10 billion to £14 billion.

Subsidies planned by the UK Government have also led to claims that household bills would have to increase by up to three times their current levels in order to make nuclear power viable.

Speaking on Newsweek Scotland on Saturday, Energy expert Antony Froggatt said that as costs in nuclear continue to rise, costs in renewables were actually falling – in some cases by as much as forty percent.

Speaking to host Derek Bateman, Mr Froggatt said: “Nuclear construction costs are increasing … in the case of the reactors that are being proposed by EDF, it’s French designed and built by a company called Arriva, and both of those have experienced incredibly large cost overruns and delays.”

Mr Froggatt added: “We’re seeing an increased expectation of construction costs while the cost of renewables and other low carbon generators is going down.

“For example, in terms of Solar PV, the unit cost fell by forty per cent in the last 12 months.

Mr Froggatt explained that part of the UK Coalition agreement was that there be no subsidy for nuclear.

However he went on to claim that a controversial system known as ‘contract for difference’ that would see the construction company being guaranteed a fixed price for nuclear generated electricity, was no more than subsidy by another name.

Mr Froggatt also explained that using the costs of the two reactors at Hinkley Point as a basline, then the cost of electricity in the UK would have to double or even treble in order to meet the guaranteed price.  Based on the new figures, nuclear would be the most expensive form of electricity generation, exceeding even offshore wind.

The debate over subsidy may be rendered academic if, as is being rumoured, Francis Hollande tells state controlled EDF to pull out of the UK nuclear sector.  Should EDF walk away from the UK then there will be no company left to build new nuclear plants.

In Scotland the SNP Government is currently driving forward with its renewable policy and has refused to sanction the building of new nuclear power plants.

Alex Salmond’s SNP administration has insisted Scotland’s renewable potential is vast and has the potential to generate tens of thousands of jobs and re-industrialise the nation.