The nuclear disaster in France and the UK

IHAVE been avoiding the topic of nuclear energy for the past several weeks, not because it isn’t still a worthwhile or current topic, but for the rather more utilitarian reason that I have been compiling a book about it, covering about seven years’ worth of commentary on the subject. Anything I write before that is done is just something else that will have to be included, and so I do not want to add to my workload unless there’s an exceptional reason to do so.

However, the series of woeful analyses that have emerged since Christmas about the United Kingdom’s failing efforts to expand nuclear energy and how these are also dragging France into an economic briar patch is, I think, sufficiently exceptional.

Since all of this has been published elsewhere (Bloomberg News on December 21, The Economist on January 24 and The Guardian on January 27, as well as related stories from other news outlets), and I do not have the necessary lack of self-awareness to presume my publisher will pay me to copy-paste someone else’s work, I’ll keep the summary short. If you want to read the long version, buy the book when it comes, hopefully sometime this summer.

The UK has been chasing the nuclear genie since 2008, when then-prime minister Gordon Brown announced a plan to have eight new nuclear plants in operation by 2023. Obviously, none of those ever materialized, but one — the two-unit Hinckley Point project — actually did get started in 2016, with a hoped-for startup date of 2025. This was made possible by investment from China’s state-owned General Nuclear Power Corp. (CGN), which was hoping to develop a new market for its HPR1000 reactor design. France’s state energy company Électricité de France, or EDF, also got on board, the thinking there being that the completed Hinckley Point plant, as well as any others that might follow, would be easy sources of imported power for France.

Things actually started to go sour right away, however. For one thing, EDF’s investment was hotly resisted; all six French labor unions with seats on EDF’s board voted against it, warning that the project would be a financial disaster for a company that was already in a shaky condition. EDF’s finance chief at the time resigned, saying he wanted no part in such a bad decision. There was some pushback in Britain as well, but this was easier to stifle since the French and the Chinese were footing the biggest part of Hinckley’s £24-billion price tag.

It became apparent as early as 2018 and 2019 that Hinckley Point was going to take longer and cost more than expected; that is just the inevitable nature of nuclear plants. Fast forward to 2023, and things have gone from “not what was expected” to “a complete disaster.” First, in part due to being shackled to the Hinckley project and hit with costs to sort out technical issues with the largely French-developed next-generation European Pressurized Reactor design being used, EDF had to be bailed out by the French government, which accomplished this temporarily by buying out all of EDF’s minority shareholders.

Then CGN, caught up in increasingly sour relations between China and the West and, as a consequence, seeing the longer-term opportunities that led it to get involved in the Hinckley project in the first place evaporate, decided to cut its losses and pulled out. That left EDF holding the bag on £32.7 billion of the plant’s costs, which had by then ballooned to between £41 billion and £46 billion. The construction delays prior to 2023 had already pushed the anticipated completion date for the plant’s two units to 2027 and 2028, respectively, but the chaos caused by the Chinese exit has moved that up even more to “no earlier” than 2031.

As things stand now, the £46-billion cost estimate and 2031 completion date are being widely viewed as entirely too optimistic, with more realistic forecasts being “more money than you can imagine” and “never.” That is because, in order to keep EDF on board, the UK government has proposed purchasing Hinckley’s electricity — if it ever produces any — from EDF for an eye-watering £92.50 per megawatt-hour. For comparison, that is about $118/MWh. The recently canceled NuScale small modular reactor project in Idaho failed because the electric cooperatives that had signed on to it bailed out when its indicated cost exceeded $89/MWh, which was actually just about $118/MWh if the generous federal subsidies were excluded.

According to several former and current EDF executives, even that rate won’t be enough to cover the plant’s construction and provide reasonable insurance against the company’s risk. EDF, which now takes its orders directly from French President Emmanuel Macron, is stubbornly moving ahead, but determination will only last as long as the money does. The UK leadership realizes this, which is why they are desperately casting a wide net for private investors.

Needless to say, that is proving to be a tough sell and raises the very real possibility that the entire project will fail, leaving the UK and French governments to wrangle over how much of the wasted billions will get charged to each country’s respective taxpayers.

The lesson in all of this for any other government with pretensions of adopting nuclear power is to, at a minimum, not even attempt it unless, first of all, it is capable of footing the bill entirely on its own and, second, has a realistic understanding of what that bill could potentially be before signing anything or turning one shovel of dirt. One of the most frustrating things about the “advocacy” for nuclear energy is its utter pigheadedness when it comes to considering the economy of the idea. There is a nearly 50-year body of evidence, from all over the world, that nuclear power at any scale takes longer and costs more than expected, and yet governments propose or even actually embark on doing exactly the same thing as everyone else has. And that, according to the old proverb, is the definition of madness.