Reactor technology is āunprovenā, government spending watchdog warns
The governmentās controversial Ā£18bn deal to build the Hinkley Point C nuclear power station in Somerset has trapped Britons into a ārisky and expensiveā project based on an āunprovenā design, the National Audit Office (NAO) has warned.
In a deal approved by the Department for Business, Energy and Industrial Strategy (BEIS) last year, the new nuclear plant will be built and operated by French energy firm EDF and the China General Nuclear Power Group.
In a new report released today, the governmentās spending watchdog said: āThe Departmentās deal for HPC has locked consumers into a risky and expensive project with uncertain strategic and economic benefits.ā
It also warned of risks to be managed during construction: āThe reactor design for HPC is unproven and other projects that incorporate it are experiencing difficulties. There are no examples of HPCās reactor technology (the European Pressurised Water Reactor, EPR) working anywhere in the world.ā
Consumers will paying subsidies on their energy bills for the scheme for 35 years in future ātop upā payments that have soared from an estimated Ā£6 billion to Ā£30 billion, according to the report.
It stated: āThe Department has not sufficiently considered the costs and risks of its deal for consumers. It only considered the impact on bills up to 2030, which does not take account of the fact that consumers are locked into paying for Hinkley Point C long afterwards. It also did not conclude whether the forecast top-up payments are affordable.ā
The risks of failure are such that the government should have a āāPlan Bā for achieving its objectives in the event that HPC is delayed or cancelledā.
Other recommendations include making it clear who in government āholds ultimate responsibility to represent consumersā and taxpayersā interestsā and having mechanisms in place to āensure oversight structures are effective across the lifetime of the project.ā
Tom Greatrex, chief executive of the Nuclear Industry Association, said: āNot only will new nuclear help secure the UKās future energy needs, but will lead to substantial industrial and employment benefits ā including considerable opportunities for the UK nuclear supply chain and a boost for UK manufacturing and construction at a time when the economy faces significant challenges.ā
In a statement, a BEIS spokesperson said: āConsumers wonāt pay a penny until Hinkley is built; it will provide clean, reliable electricity powering 6 million homes and creating more than 26,000 jobs and apprenticeships in the process.ā
But Amyas Morse, head of the National Audit Office, said: āThe Department has committed electricity consumers and taxpayers to a high cost and risky deal in a changing energy marketplace. Time will tell whether the deal represents value for money, but we cannot say the Department has maximised the chances that it will be.ā
Report raps department over conflict of interest worries
The government used a company to advise it on the Hinkley Point C deal despite knowing there was a potential conflict of interest, according to the NAO report.
LeighFisher was paid Ā£1.2m by the Department for Business, Energy and Industrial Strategy to āprovide advice on the dealā which included checking whether EDFās estimate of costs were reasonable.
The firm is a subsidiary of Jacobs Engineering Group ā which āhad provided engineering and project management services, including seconded staff, to EDF in relation to the HPC deal.ā
The report said LeighFisher had notified the department about the potential conflict of interest but the NAO added: āThe departmentās monitoring and management of the potential conflict was insufficient.ā
No comments yet