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The government’s incoherent nuclear policy

Kaveh Pourvand, 3 July 2013

Previously I blogged on the great difficulty the government appears to have in negotiating terms for new nuclear investment with nationalised (though not by our nation) power company EDF Energy. The company, which runs eight out of nine of Britain’s nuclear power stations, is a subsidiary of EDF S.A., a nuclear energy company controlled by the French state. I suggested the government should be taking a more proactive approach on this issue by taking direct stakes in nuclear companies and using these to leverage investment. This interesting idea was advocated by Conservative MP Dr Phillip Lee.

Nuclear EDF 2

The government seem to be getting more desperate. They have now turned to China for help. Reports suggest that officials from China’s nuclear industry have been in discussions with the Department for Energy and Climate Change (DECC) about a potential £35bn Chinese investment in new nuclear plants. The Guardian points out that China has operated its own nuclear power plants since 1994 and is ‘awash with cash from its hugely successful industrial expansion and sees the UK as a potential shop window for exporting its atomic technology and expertise worldwide’.

Let us put aside the security concerns such an arrangement may create. (Certainly one can’t imagine the United States entering into these sorts of negotiations.) Instead, it is worthwhile focusing on the great irony of it all. During a parliamentary session in November last year, Dr Lee asked energy minister Ed Davey why the government itself doesn’t invest to help create the capacity the UK urgently needs. Mr Davey brushed aside the question as asking for ‘nationalisation’ and defended the government’s ‘market-based approach’.

Fast forward several months and the government is in discussions with the Chinese ‘nuclear industry’. One may be forgiven for asking how China has developed its nuclear industry, how it seems to have competences in nuclear power that Britain, the first country to produce nuclear electricity in commercial quantities, no longer has. Did the Chinese government focus on creating the right ‘incentives’ and ‘framework’ for a free-market in nuclear power? Did it show great care not to ‘crowd out’ private nuclear investment? Did it, in the spirit of free-market openness, allow overseas electricity companies to run their nuclear power plants?

No.

The ‘Chinese nuclear industry’ that DECC are negotiating with are in fact two large, state-owned firms, China National Nuclear Power Corporation (CNNPC) and Shanghai Nuclear Engineering Research and Design Institute (SNERDI). China has utilised a pro-active, state-led approach in developing its nuclear industry, the very approach the government has disregarded.

It is increasingly clear that the choice facing the government is not between a ‘free-market’ approach and a nationalised one. The relevant question is which nation will control Britain’s nuclear industry. Perhaps it is now time for the British government to consider exercising its own sovereignty in regards to our nuclear industry.

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