Friday, December 19, 2008
Right since the 1950s money has been taken by the government to put into a fund for decommissioning. I cannot find how much it was in the early days. The failure of government to publish how much they got may be an unfortunate oversight but prevents an actuarial account of how much it should have been by 1989. The official 1989 figure was £3.8bn:
"Electricity consumers have already paid for the decommissioning of the Magnox plants. In the 1989 pre-privatisation accounts of the Central Electricity Generating Board (CEGB) and the South of Scotland Electricity Board (SSEB), £3.8bn of assets was set against the decommissioning liability. Taking account of inflation and allowing, say, 3% annual real rate of return, this sum should have about doubled by now. This notional amount was simply absorbed by government when the industry was privatised and was used to subsidise government spending.
There was also the Fossil Fuel Levy, which was a sum paid by electricity consumers (10% of their electricity bills) from 1990-98, to which electricity consumers contributed about £8bn. Michael Heseltine told Parliament this was ‘to decommission old unsafe stations’. In fact, it was used for almost anything but that, and paid for a new nuclear power plant (Sizewell B) and was unrestricted cash income for Nuclear Electric to pay for its losses. Despite its best efforts, Nuclear Electric, the nationally owned company that inherited all the CEGB’s nuclear assets, did not manage to spend it all and £2.7bn remained unspent when the nuclear industry was reorganised in 1996. A small amount went to British Energy’s (the privatised company that inherited the more modern nuclear plants) segregated decommissioning fund and the rest went to BNFL, who inherited the Magnox plants. There, it was placed in the Nuclear Liabilities Investment Portfolio (NLIP), a fund that was separately identified in BNFL’s accounts, but not strictly segregated. So if BNFL had faced bills it could not otherwise have paid, it would have to have drawn this fund down. The NLIP, with inflation and some capital growth now stands at about £4bn.
Two of the Magnox stations were primarily built for military purposes to produce plutonium for bombs and therefore arguably not the responsibility of electricity consumers, leaving nine civil plants. If we assume that a Magnox plant costs about £1.1bn to decommission, it seems clear that consumers have already paid more than enough to discharge their responsibility under the polluter pays principle, and that government took most of that money for its own purposes. All that remains of the Magnox provisions is the £4bn in the NLIP. This would not be enough to pay for Magnox decommissioning but would be sufficient on projected levels of spending at the NDA and with a little interest on investment to fund about 20 years worth of work decommissioning them."
Taking a more reasonable rate of return of 6% (since 3% barely covers inflation) that £3.8 billion rises to about £14 billion. Add the £8 billion collected under the fossil fuel levy from 1990-98, lets just double that for interest & inflation because it was a shorter time. Then if £8bn was raised from 1990-98 we can add, at least, the same again for current figures.
The government's receipts come to £14 + £16 + £8 bn = £38 billion.
We have seen some figures for decommissioning up to £70 bn which leaves us with 2 options. We can note that the decommissioning of the first nuclear reactor at Shippinport cost $98m (£65m). With 44 reactors in Britain at 18 sites that would equate to £2.8 billion. Even working on the 13 fold increase in public works for public works we have seen earlier that only comes to £37 billion so clearly there is a degree of padding & greengraft going on unusual even in the British government. The other alternative is not to decommission at all (ignoring the fact that some decommissioning has already happened) but to build new reactors on the old 18 sites & leave these reactors sealed up for 50 years till the short half life radioactive materials have become safe to handle.
In which case we have almost £38 billion free.
This is from Jerry Pournelle's blog yesterday.
One hundred 1,000 megawatt nuclear power plants should cost about $150 billion (£100 billion) (the first two might cost $25 billion each, but the hundredth will be less than a billion)(£650 million).
This obviously includes a manufacturing capacity able to keep churning them out at, I would guess, at least 25 a year & I would also guess, quite a lot less than £1 billion as the marginal price & with a world shortage of them & market prices starting at $1 billion.
So lets set up a conglomerate owned 50% by government & the rest between Ariva, Westinghouse & so on who now have the expertise since the Labour government closed down most of our native technical expertise. That means an extra £12 billion of new government investment beyond what they owe to get up to the £50bn. For that we get 100 gigawatts of new power, about 50% more than the total of all our power with no other production costs than the relatively minor running costs of nuclear. That means electricity prices at a fraction of their present ones & since the correlation between energy cost & availability is well known, a fast growing economy & that usage would go way up. On top of that we can later export at least 25 generators a year meaning not less than £15 billion extra exports.
Beats borrowing £500 billion & blowing it on a 2.5% VAT cut & lots of useless civil service regulators doesn't it?
PS Must admit I have said something similar before here but the numbers stack up even better than I thought.
PPS Jerry also used a link from me last week about the tizzy thrown by the Barclay Bros when Sark refused to vote for their candidates.
Barclay Brothers snarky about Sark
Re your mention of this on Thursday voters in Sark overwhelmingly voted for candidates the Barclay Bros didn't want & they have taken a huff & their money & left. Considering that this means a high proportion of the locals losing their employment I have a lot of respect for such people not being willing to be bullied.
The Barclays Bros own the Telegraph which is, unfortunately, one of the few papers which will print articles skeptical to the warming scam. http://www.guardian.co.uk/uk/2008/
Everything is connected to everything else....