Sunday, 17 October 2010

Huhne says 'yes' to Wylfa, still says 'no' to subsidies (updated)

Following on from the good news earlier this week that the existing reactor at Wylfa will have its life extended for two more years, the Sunday Telegraph reports that the Energy Secretary, Chris Huhne will announce this week that Wylfa B will be among those sites approved by the Government for a new nuclear power station.

However, this announcement still does not mean that Wylfa B will be built -- it merely provides Government permission for the private sector developer, in this case Horizon Nuclear Power, to build a nuclear power station at that location if they believe there is a viable business case for it. And this is unfortunately were the problems for Horizon start because the Government has not softened its stance on nuclear subsidies: there will still be no government money available to support either the construction or future de-commissioning of any new plants. Horizon has repeatedly asserted that modern nuclear reactors are far more expensive to build than conventional coal and gas-fired stations and therefore need some financial support to be both viable and competitive over the long term. In order to get around the "no government subsidy" policy they have suggested a consumer-funded levy, i.e. a government sanctioned surcharge collected from all energy bills -- however this was seemingly rejected by Chris Huhne last month in favour of simply setting a "minimum carbon price floor" which would make cheaper but higher polluting energy (i.e. that made from coal and gas) more expensive, thus making expensive but cleaner energy (such as nuclear and other renewable sources) more competitive.

Will Horizon be able to proceed on this basis? We don't know -- and as I wrote last month the two German companies (E.on and RWE npower) which own Horizon will anyway be hit by a new German tax on nuclear fuel rods from next year which will anyway seriously impact their profits. As Islanders we will have to now wait with crossed-fingers and see what pronouncements Horizon make following Chris Huhne's official statement next week.

That said, as the excellent Dylan Jones-Evans writes today, there is plenty that the Welsh Assembly Government can be doing in the meantime to move things forward:

"[T]his could mean that there is a great opportunity for Wales to become a real centre of expertise in this sector, and it is now up to the Welsh Assembly Government to ensure that European Structural Funding can be used effectively to help build up value added projects for the new power station. For example, helping to create an energy technology park around the new development and ensuring that the skilled workforce needed for the power station and its construction are sourced locally are just two simple examples on how the project could benefit the Anglesey economy.
I fully expect WAG to announce a detailed strategy for supporting the Wylfa B development and how it will benefit the local economy over the next few months."

Yes, WAG, we will be watching and waiting...
Albert Owen questioning
Chris Huhne

UPDATE: With thanks to 'Avatar' who spotted it, I recommend that interested parties watch this clip (from around 11.41 onwards) of Albert Owen last month questioning Energy Secretary, Chris Huhne, on what does and does now constitute a subsidy for the nuclear industry. To be fair to Albert he asks some good questions -- but does momentarily withdraw back into his famous 'Albert Fantasyland' when he tries to claim that Labour were not against Nuclear subsidies (a tactic he also deployed during the general election) - they were.

19 comments:

Anonymous said...

I wonder if 'no subsidy' means 'no subsidy at all', or just 'subsidies, but they won't be immediately apparent to the public'?

It'll get the go-ahead, with some deal that the subsidy is hidden in the general leccy bill, just as it is at present (11% of the bill is an undeclared subsidy to nuclear).

Anonymous said...

A WAG lady minister was once appointed with responsibility for "Agriculture" yet had no knowledge of farming and was indeed a vegetarian. Here we have a minister known for his opposition to nuclear power appointed as energy minister. What an absolute joke. Is Anglesey Damocles in all this or just wanting a normal level of prosperity like everywhere else?

It is like pushing water uphill.

Anglesey should become an "enterprise zone" for 20 years within which all of Anglesey should become a "Simplified Planning Zone" so that we can get on with providing jobs homes and prosperity to all.

When will the MD "DB" be replaced?

Valleys Mam said...

There is speculation,allegedly, that hidden subsidy was offered to certain steel investors in Wales
watch this space

The Druid of Anglesey said...

Mam - the space is duly being watched!

Anonymous said...

(11% of the bill is an undeclared subsidy to nuclear).

I'd much rather this than the subsidy to the criminal folly and huge con that is wind farming.

avatar said...

The following link is interesting

http://www.parliamentlive.tv
/Main/Player.aspx?meetingId=6615&player=silverlight

especially from 11:40 am onwards.

Anonymous said...

IT'S OFFICIAL.
Cllr Clive McGregor is Incompetent and that David Bowles is telling him what to do.

Isle of Anglesey County Council .
Report by Audit General for Wales
Preliminary Corporate Assessment - September 2010.

" In beginning to implement its recovery plan, the first priority has been the need to improve the effectiveness with which councillors conduct their business.

The Interim Managing Director has rightly identified the need for councillors themselves to take ownership of this process if improvement is to be sustained, and that the role of leaders of political groups in maintaining momentum is the key to success.

In doing so, he has provided strong support to the comparatively inexperienced Council Leader.

With this support, the Leader has taken decisive action against two of his group members and has gained the support of other group leaders to help enforce his decisions".

So now we know who is running the show, political decision's and all!

avatar said...

As one point in his evidence Chris Huhne, the Energy Secretary, suggests that anybody interested should try the DECC energy pathway calculator 2050.

The link for this is:

http://www.decc.gov.uk/en/content/
cms/what_we_do/lc_uk/2050/2050.aspx

Anonymous said...

It's Official.
That being the case.

Is Clive McGregor not taking public money under false pretences and should go?

Since when was the Managing Director elected to make political decisions?

Seems to me like a Local Authority with a self appointed Mayor through the back door.

TGC said...

The government spin on 'no subsidy' looks good and honest. 'The government doesn't build or finance nuclear power' is what they bleat.

It's the same bleat heard all over the world. But it is entirely false. Look deep into the accounts, and you'll invariably find a complex, usually hidden mechanism, such as in France currently, that provides state subsidy (that is, your tax pounds), to 'help' private industry along. The sums involved are huge, as are the gaps in understanding and valuing the ultimate cost of waste disposal. Waste is almost certain to end up far more technical and expensive a challenge than anyone imagines, and you can guess who'll be footing the bill...

What we have, sadly, is short term policies for a long term environmental problem.

richard.sletzer said...

Such is the state of the Anglesey economy surely the only answer is to allow companies which are setting up or already established and operating in Anglesey reduced corporation tax on a sliding scale subject to the amount of employment they provide on the island and the amount of local business rates they pay.

I wonder if the operational extension now given to Wylfa could have prevented (or at least deferred) the closure of Anglesey Aluminium had it only been granted a couple of years earlier.

One time Plaid Cymru MP for Merioneth Lord Elis Thomas - a long-time anti-nuclear campaigner - opposed a similar extension for Trawsfynydd and kicked up an enormous fuss when it was proposed to test the reactors to see whether their life could be extended. Trawsfynydd was, as a result, closed down when it probably had several years of useful life still in it.

...but in those days all lefties were irrationally anti-nuclear. Funny how things change.

Anonymous said...

Richard: as for Business benefits, I agree. This links in nicely with the nuclear issue, because one reason Wylfa is here is that it is far removed from large population centres (although in reality, depending on weather systems at the time of any accident, we'd find it may not be!)

So, the first and most serious obstacle to overcome is the 'Eh? Set-up on that far-flung island, far from any markets?' reaction. To someone living in England, Wales - especially outside the M4 corrdior - is terra incognita. We will get nowhere until we start to address this problem imaginatively. One thing I've argued for a long time is to promote what we have, rather than try to be like everyone else - everyone else is doing that already!

Darren said...

with the ageing population of the Island it's extremely hard to convice them that we need to promote ourselves. To be fair, I'm not sure that I'd want my nice little island infested by "those" from "away". If every day was like a sunny july day on Porthdafach beach I'd hate it. That said, there is a massive need for what many don't want..investment, jobs, future skills base, techno heads etc. So is it a catch 22 situation?

Gareth o Fon said...

For the first time in a long time, I agree with Dylan Jones Evans. Also, in a possible future independent Wales, if we had a surplus of Energy created, we could sell this on to England and other nations for a tody profit.

The Red Flag said...

Richard - I wonder if the operational extension now given to Wylfa could have prevented (or at least deferred) the closure of Anglesey Aluminium had it only been granted a couple of years earlier. It was the EU that caused Wylfa to close by stopping the cheap power and by removing the tariff on Rissian Aluminium.


Gareth Also, in a possible future independent Wales, if we had a surplus of Energy created, we could sell this on to England and other nations for a tody profit. Not unless it was a nationalised industry.

The Druid of Anglesey said...

Red Flag

"Not unless it was a nationalised industry."

Exactly. And we can all imagine what the effect on future inward investment and overall business confidence in an independent Wales would be if certain sectors of the economy were nationalised.

Anonymous said...

Chris Huhne:

"A deal is a deal. I am there to deliver it"

Well done mate. Is that the same kind of 'deal is a deal' that you made with the Lib. Dem. voters not to support new nuclear build then? No? What a waster. A sniff of power and they're anybody's.

Anonymous said...

Chris 'The Hun' Huhne:

the government would not rule out assuming responsibility for radioactive waste, including spent fuel “at a fixed price”, provided it properly reflected any financial risks or liabilities assumed by the state.

So there you go. New nuclear developers will get to pocket the money in return for a known liability in respect of waste. How much of that 'fixed price' takes into account the need to carefully monitor and secure radioactive waste for thousands of years? Not a bit of it, my friend.

Gareth o Fon said...

Red Flag, yes you're right there actually.

Still think that the concept of selling Wales, and specifically Anglesey, as energy hotspots can help us going forward. This being the case no matter what our Political status is in, say, 20 years.