The Nuclear Decommissioning Authority has today announced its draft budget for 2015/16. The sum will be £3.31bn, of which £2.1bn comes from the public sector. That’s public money being used to subsidise electricity which has already been used.
The cost for subsidising electricity via the Renewable Obligation, is around £2bn, with another 1/2 billion for the FIT, and – since we’re comparing – the latest estimates for fossil fuel support are around £4bn.
All elements of our energy system attract subsidy. What I find distasteful is that the users of nuclear electricity over the last 60 years have handed the cost of dealing with the waste to the citizens of today. Our leaders of yesteryear created a large unfunded moral hazard for future generations. The waste issue remains one of the biggest problems faced by the nuclear industry in their programme for new-build in the 21st century.
The decommissioning figures don’t include any aspect of subsidy for electricity production, or the credit guarantees which have been offered to nuclear projects in the UK. In the future, nuclear will benefit from a very generous subsidy of its own for electricity production, via a 35-year, index-linked Contract for Difference agreement, which will see UK taxpayers making generous contributions to state-owned French and Chinese utilities.
The renewable choice
Renewable energy continues to tumble in cost – the industry expects solar energy to be subsidy-free around the turn of the decade, and onshore wind is projected to reduce its cost by another 10% in ten years. That’s in stark contrast to the nuclear industry which has a history bedevilled by cost and time overruns in its latest projects (Finland and France).
Renewable energy isn’t a panacea to our energy needs – at least not yet. Although renewables have highly predictable output, we’re not able to store significant amounts of electricity on a daily or seasonal basis. That limits the ability of renewables to become the dominant part of our electricity economy, and points to the need for a far greater effort to incentivise R&D in energy storage technologies, and to commercialise those that currently exist.
Expertise in the energy storage and smart energy sectors would serve the UK well in the future, providing us with the opportunity to export goods and services over future decades. And yes, maybe some of those customers might be French and Chinese!
Our energy future, and our hard-earned cash as taxpayers is best served by a massive focus on energy efficiency, increased deployment of existing technologies, and a huge effort in R&D on energy storage and smart energy systems. Let’s run our existing nuclear fleet as hard and as long as it’s safe to do so, and then spend our money where it delivers best for our children and grandchildren; a renewable future.