If one green energy plant costs £36bn, there's no hope for net zero
There is just one catch. The cost has doubled over the last five years, and will double again before its reactors are switched on. In reality, Miliband and the Green Commissars around him are allowing red tape and bureaucracy to drive the cost of the green transition to astronomical levels – and that will destroy the whole project.
It will at least help make sure we have enough power to keep the lights on when the wind turbines aren't working. The Sizewell C nuclear power plant will generate enough power for about six million homes once it is finished. The Government will own a majority stake, but the British Gas-owned Centrica, France's EDF, along with some investment funds, have been strong-armed into taking stakes, while the taxpayer-financed National Wealth Fund will provide much of the finance. 'It is time to do big things and build big projects in this country again,' boasted Miliband as he announced the project.
Here's the problem, however. The plant will cost £38bn, almost double the £20bn that was estimated when it was first under discussion five years ago. If anyone believes it will actually get delivered at anything close to that figure I have a 'pre-loved' windmill I would like to sell them. Given the atrocious cost overruns that plague every major infrastructure project in the UK the final cost will be well over £60bn and perhaps as high as £80bn. It is going to be an incredibly expensive piece of kit.
It does not have to be this way. Nuclear power plants can be built at far lower cost. In France, a new plant costs an estimated €11-12bn euros, and even the Flamanville Plant, which suffered significant cost overruns, only came in at €13bn euros. Sure, costs vary according to their size, and type of reactor. But Britain Remade, a think tank, estimated Britain has the second highest costs in the world behind only the United States (which prefers to focus on its abundant fracking industry). In this country, nuclear costs an estimated £9.4bn per megawatt to build, compared with £4.4bn in France, and £2.2bn in South Korea. Given that upfront capital costs are the major expense with nuclear power – once it is up and running it is very cheap – that means energy bills will be two or three times higher for homes than they would be if we could build at the same price as South Korea.
We all know the reason why. Britain has allowed the cost of building even a minor pedestrian bridge, never mind something as controversial as a nuclear power station, to be smothered in red tape. Planning reports run to tens of thousands of pages, legal challenges are allowed at every step of the way, and every form of wildlife is prioritised over the long-suffering British taxpayer.
If Miliband was serious about hitting his net zero targets he would ruthlessly slash red tape until we got down to South Korean levels. If he could do that, we could take the cost of Sizewell C down to £10bn. And yet, the harsh truth is this. Miliband and the Green Commissars care even more about rules, regulations and state control than they do about saving the environment. If Miliband let the market work he could deliver green energy on time, at reasonable cost – but none of us should hold our breath waiting for that to happen.
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