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24/08/2016

Resignation of EDF finance chief shows new UK nuclear plant ‘a dead duck’

Climate & Environment

Resignation of EDF finance chief shows new UK nuclear plant ‘a dead duck’

Hinkley Point nuclear power station. [Wikimedia]

Five years on from the Fukushima, the human and environmental impacts of the disaster  continue to grow in scale, writes UK Green MEP Molly Scott-Cato.

Molly Scott-Cato is an MEP for South-West England and Gibraltar, whose constiutency covers the Hinkley Point nuclear reactor.

This is a key reason why I am fighting so hard to prevent the new reactors at Hinkley point in Somerset from being built.

Nuclear-power is not commercial; it cannot survive without government subsidy and never has been able to during the 60 years of its existence. That in itself should be enough to close the question of whether we wish to build new nuclear power stations in Europe. But somehow the commercially unviable deal to build at Hinkley has slipped between the scrutiny of commercial and political interests, and between the political authorities at Westminster and in Brussels. It is extraordinary that such a shaky deal could have got so far and endured for so long as it was never going to survive in a commercial market.

For me one of the most shocking aspects of the deal was how little concern was raised by UK politicians. We are talking about a deal that involves two Chinese nuclear companies that are ultimately under the control of the Chinese Communist Party gaining access to our civilian nuclear industry. I am astonished that Conservative MPs are prepared to countenance such a risk to our national security.  And this is to say nothing of the risk of suicide terrorism which we are left open to when nuclear stations are operational anywhere in the country.

Commercially the Hinkley deal has been a dead duck for some time. In spite of the fact that EDF has been offered a price for electricity more than twice the current market price guaranteed for 35 years, the vast expense of developing nuclear power means that the capital investment is still beyond the company’s capacity. The resignation of chief financial officer Thomas Piquemal was a clear indication that he was coming under political pressure to make a decision that was against the commercial interests of the company. He refused. This led to a drop in the company’s share price and EDF has now looking to the French government for financial support directly related to Hinkley.

Last week I raised with the commission the question of the impact of this financial situation on the state aid position with regard to Hinkley. Within the European single market there are strict rules governing the subsidies that governments can give to companies, to ensure that there is a fair competition in any market. The commission controversially ruled in July 2014 that they think the deal was acceptable under state aid rules, a decision that is subject to legal challenge by the Austrian and Luxembourg governments. New French money will clearly require a new ruling and, given that the case was so marginal last time, it seems unlikely that the Commission will rule in favour of EDF and its Chinese partners.

The issue of most concern in this whole sorry saga is the total absence of genuine political scrutiny. Most UK MPs only seem to have woken up and taken any interest about a week before the deal was signed off last autumn. Cameron and Osborne have been operating as though in a legal vacuum. The British media has paid no attention to the rules of the single market and my continual efforts to interest them in the issue of state aid have failed.

Of course there are costs that are much more significant than financial costs. In the local context the costs to the renewable industry of a government ideologically committed to nuclear in the face of commercial realities are severe, with many businesses closing and thousands of jobs being lost. But in this week we must not forget the human cost of nuclear. The horrors of the Fukushima meltdown in Japan has led to then prime minister Naoto Kan turning his back on nuclear. In countries with open and responsive political systems, such as Germany, similar conclusions have been reached. In Britain the smoke and mirrors of our undemocratic political system has allowed a commercial monster to stagger on at great cost to economic and energy interests.