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Why the UK can’t build its own nuclear power stations

Joe Wright, 23 October 2013

The current state of Britain’s energy sector and the fact we cannot build our own nuclear power stations is another example of the government’s failure to make long term policy decisions. Despite knowing that many of the UK’s power stations were scheduled to close as early as 2020, the coalition government cancelled plans in 2010 to help create the capacity to build nuclear power plants here in the UK.

In a recent report by Civitas, the energy sector was used as a particular example of the dangers in having no modern industrial policy. It explained that the economics of the energy industry are such that building a strong energy sector needs strategic direction from the state, involving contracts that are very long-term, high in value and few in number.  In one particularly relevant example of the government’s failure to meet these requirements the report noted that, “Given the coalition’s recognition of nuclear power’s importance, it is all the more baffling why one of its first measures [entering government] was to cancel the £80m loan to Sheffield-based engineering firm Sheffield Forgemasters”. The loan was initiated by Peter Mandelson and was particularly important as it came with the condition that Sheffield Forgemasters would build a 15 kilotonne press, the kind used specifically to forge huge components for nuclear power stations.

The Forgemasters loan was a small step toward creating a supply chain here in Britain for the inevitable expansion of nuclear power. Given the global (though admittedly nervous) shift toward nuclear power, it was also possible Sheffield Forgemasters would have become a successful exporter – something we are in short supply of – and would also have been a signal to investors and manufacturers to consider creating other parts of the nuclear energy supply chain in the UK.

Far from building the kind of sophisticated energy capacity that countries like France enjoy, most of the UK energy sector is foreign-owned. The largest off-shore wind farm, the London Array, is owned by companies based in Germany, Denmark, and Abu Dhabi. The turbines themselves were all built outside the UK. Ironically, since privatisation of the UK energy sector in the 1980s the majority of UK energy supply has been taken over by a subsidiary of the French state-owned Électricité de France (EDF Energy), which already owns and operates eight of the UK’s ten nuclear power stations.

Because of strategic planning by the state, 80% of France’s energy comes from its own 59 nuclear power plants (managed by EDF SA). The country has the lowest carbon dioxide production per unit of GDP in the world, while being one of the largest exporters of electricity. More importantly, France has the 10th cheapest electricity prices in the EU, while the UK has the most expensive.

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