Friday, January 18, 2019
Government energy policy comes apart at the seams
The delay in building the £13bn Wylfa Newydd nuclear power plant, which was announced yesterday raises a number of questions about UK energy policy and in particular whether Government needs to become more proactive to achieve their goals.
According to the BBC the Welsh secretary, Alun Cairns said he was "confident" the plant would still be built on the Anglesey site and that it will be delayed by "potentially a small number of years". In my view that can only be the case if the UK Government is prepared to take on a substantial portion of the construction cost and, presumably, guarantee the decommissioning costs that nowadays have to be written into these projects.
The economic climate is such that companies like Hitachi are questioning whether they can afford to bear the upfront costs of a long construction period before they start to get any economic return on their investment. Building a nuclear power plant is complex and expensive, the environmental considerations attached to any construction just add to that cost.
Is this the sort of project any private sector company can take on anymore, without significant state support? As my former Welsh Assembly colleague, Eluned Parrott tweeted yesterday:
'The UK Govt turned it’s back on the Swansea Tidal Lagoon because it relied on this.
Who will invest in a country that’s an international laughing stock, openly discussing defaulting on its legal obligations & insulting its current partners?'
Of course once we go down that route, the questions then start to be asked, why Wylfa and not the Swansea Bay lagoon? Why not a barrage across the Severn? What in fact are the policy objectives of UK energy policy?
These are legitimate questions. As far as I am aware the two main policy objectives of UK energy policy are to get energy security and to tackle climate change. Yesterday's announcement was a wake-up call to ministers, they cannot rely on the private sector to do this for them. They need to put their money where their policy is.
According to the BBC the Welsh secretary, Alun Cairns said he was "confident" the plant would still be built on the Anglesey site and that it will be delayed by "potentially a small number of years". In my view that can only be the case if the UK Government is prepared to take on a substantial portion of the construction cost and, presumably, guarantee the decommissioning costs that nowadays have to be written into these projects.
The economic climate is such that companies like Hitachi are questioning whether they can afford to bear the upfront costs of a long construction period before they start to get any economic return on their investment. Building a nuclear power plant is complex and expensive, the environmental considerations attached to any construction just add to that cost.
Is this the sort of project any private sector company can take on anymore, without significant state support? As my former Welsh Assembly colleague, Eluned Parrott tweeted yesterday:
'The UK Govt turned it’s back on the Swansea Tidal Lagoon because it relied on this.
Who will invest in a country that’s an international laughing stock, openly discussing defaulting on its legal obligations & insulting its current partners?'
Of course once we go down that route, the questions then start to be asked, why Wylfa and not the Swansea Bay lagoon? Why not a barrage across the Severn? What in fact are the policy objectives of UK energy policy?
These are legitimate questions. As far as I am aware the two main policy objectives of UK energy policy are to get energy security and to tackle climate change. Yesterday's announcement was a wake-up call to ministers, they cannot rely on the private sector to do this for them. They need to put their money where their policy is.
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All 3 projects should be developed by Govnt (with private support, debatable?)It could help energy policy, show the Country as positive entering the future,give us skills in developing such projects abroad,provide jobs.It could show us as a FORWARD looking country.Money does have to be spent in solving problems, not cheapYes it will bring challenges (environment) but they can be worked out penny pinching will not solve problems.
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