NUCLEAR POWER TOO EXPENSIVE
Senior DTI officials and Sir Adrian Montague, Chair of British Energy, were unable to tell the Commons Public Accounts Committee why they had systematically underestimated the cost of cleaning up nuclear power station sites at a hearing this week.
The unreliability and uncertainty of judgements on the costs of nuclear energy were demonstrated on Monday (27 March) during an evidence session on British Energy at the PAC [1].
Helen discovered that the DTI had apparently been analysing the future costs of the company using the wrong discount rate. This contradicts the guidance of the Treasury and means the future liabilities of British Energy have been underestimated possibly by hundreds of millions of pounds. [2]
Helen has also joined with seven other Labour MPs to produce ‘What’s in the Mix: The Future of Energy Policy’ – a pamphlet that will be submitted as evidence to the government’s current energy review. All those involved are members of SERA, the Labour environment campaign – the publishers of the work [3].
Speaking after the hearing, Helen said, “I was shocked to learn that such a fundamental error has been made by DTI civil servants. Policy decisions on nuclear power are heavily affected by the way in which future costs are calculated.
“Taxpayers’ money was used to restructure British Energy and yet it seems the DTI is still making basic mistakes that misrepresent future nuclear liabilities by millions. The Public Accounts Committee demanded that officials clarify the situation urgently and their revised calculations will be published by Parliament.
“This episode demonstrates the risks of building yet more nuclear stations. The idea that nuclear power is free from carbon dioxide emissions, or that we can only achieve a low carbon energy economy by relying on it, is simply untrue.
“New nuclear power stations would take an extremely long-time to build and provide no solution to our current reliance on imported gas. They would produce radioactive waste that we have no adequate way of storing and which will burden future generations for thousands of years. On top of this, they will be extremely expensive.
“The best way forward for Britain is to combine an energy mix centering on renewables and energy conservation, but excluding new nuclear power generation.”
[1] For details of the PAC, see http://www.parliament.uk/parliamentary_committees/committee_of_public_accounts.cfm
[2] The DTI has used a 3.5% discount rate for calculating the nuclear liabilities of British Energy. However, Appendix 6 of the Treasury Green Book 2003, which sets out the appropriate methods of evaluating government projects, states that a declining discount rate should be used over time. The consequence is that the DTI has underestimated the future nuclear liabilities of British Energy possibly by several hundred million pounds.
[3] For details of SERA, see www.sera.org.uk. The MPs contributing to the pamphlet are: Alan Whitehead, Joan Walley, Michael Meacher, Colin Challen, Helen Goodman, Nia Griffith, Mark Lazarowicz and David Chaytor.
Filed under: Uncategorized on March 30th, 2006
