I listened to the United Kingdom’s Energy Minister, Mr Ed Davey, speak on the radio about the proposals for nuclear energy. He spoke about the need for investors to see a clear return on their investment within a settled and predictable framework and that by putting a levy on electricity bills investors in the nuclear industry would see a clear guaranteed return (guaranteed by the consumer no less) and would therefore invest in the building of new nuclear electricity generating plants. It is a statement which sounds logical but is full of inaccuracies and has a great measure of hypocrisy.
First, the need for all energy companies to have a settled and clear framework is paramount, as Mr Davey recognises. That is not what the government has provided when it comes to renewable energy. The PV industry has been a very uncertain place; many PV companies have closed down or gone into bankruptcy pure as a result of government generated uncertainty. The solar thermal industry has fared even worse. There has been stop start of tiny incentives, periods when there are no incentives, schemes created and revised several times before they come into fruition and then the coming into fruition has been delayed.
Mr Davey says the right things but he and his Department to not do what they speak. It is impossible to reach any conclusion other than Mr Davey and his civil servants are grossly incompetent or that they speak with forked tongues. Certainly no owner or investor in any of the solar technologies will invest on the basis of what they say or publish. The government has lost credibility on energy policy.
When it comes to the nuclear industry Mr Davey seems to think that all investors want is a guaranteed stream of income from their investment. In fact growth is in the long term more important than income. If an investor wants income he can invest in bonds. If you invest in a nuclear power plant you want income and growth.
Now I see very little opportunity for growth in your investment in a nuclear power plant. There will always be pressures to keep the price of the product low, and pressures to make savings which might well conflict with the very best safety practise. Furthermore who wants to buy shares in a nuclear company? The down side risk is tremendous, as can be seen by credit agencies who are now degrading the credit ratings of the major nuclear energy generators. Nuclear power is about as attractive as a topic for investment as tobacco or asbestos.
If the government sticks to their plans I cannot see there being any willingness to invest in nuclear power, or solar, for that matter, which will leave our nation short of light and heat in years to come, which is a shoddy legacy for the future.