Despite the government’s constant assertion that funding is impossibly tight and that any departure for a rigid status quo by the Labour party is unaffordable, there seems to be no limit to government subsidies gushing into the doomed nuclear project at Hinkley in Somerset. Last year the government offered the French energy company EDF the contract to build a third nuclear power station paid for by increases in electricity bills over 35 years and Treasury-backed loans. Now confidence in the project is evaporating as it is increasingly realised that the same construction problems, delays and spiralling costs which have devastated EDF’s building similar nuclear plants at Olkiluoto in Finland and Flammanville in France will hit Hinkley C in the UK. Centrica, which was supposed to be a joint partner with EDF, pulled out. EDF then couldn’t sustain the project out of its own finances, so it went cap in hand to Chinese state-owned companies and to AREVA, a French state-owned company. Then 2 months ago it was revealed that AREVA was going bankrupt.
At this point the Chinese nuclear companies also began to get cold feet, and press stories emerged that Saudi Arabia and Qatar were being approached to invest in the project. The obvious question arises as to why they should want put their money into such a risky project which so many other countries and companies had already decided was throwing good money after bad. There can be only one explanation. The UK government , which has already agreed to offer a £10bn (yes, £10 billion) loan guarantee for the project, is now so desperate to avoid the ignominy of collapse that they have also now agreed to ‘underwrite’ the whole project and pay for all the extra costs which the project may throw up. If the Tories were really serious about cracking down on excessive and unnecessary public expenditure rather than simply eviscerating the welfare state, it is inconceivable that such an open-ended and reckless commitment of public funds would ever be allowed to pass muster.
Even now with all these monstrous concessions at the expense of the British taxpayer, Hinkley C looks precarious. The Chinese are demanding to bring in their own equipment for the construction, but EDF is refusing to allow this. Aside from that, the tighter safety standards in the West as a result of Fukushima may yet make the construction of nuclear power all but impossible. This process cannot be taken much further: the cost of renewable like solar power is coming down very fast while the cost of nuclear power continues to rise remorselessly upwards, probably prohibitively.