UK’s nuclear energy will cease to be under government control

The UK’s nuclear energy will shortly cease to come under government control.

Centrica (the energy company which owns British Gas) is buying 25% of British Energy, the nuclear generating plant, from EDF. The UK Government owns 35% of British Energy, which is worth according to the price that Centrica paid for its shares, around £4.3 billion. Having sold 25% to Centrica, EDF will now buy the UK Government’s 35%, giving EDF (which stands for Electricté de France) control of the UK‘s nuclear generating industry which is expected to be expanded greatly if the unimaginative Secretary of State John Hutton has his way.

The astonishing thing about this is that the Government is so willing to dispose of an industry which it thinks critical to our energy future, and see it disposed of into foreign hands. I shall ignore the recent spate of nuclear low level leaks at EDF’s plants in France; these things happen and will happen to any nuclear operator. They are reasons to consider using nuclear energy very carefully, not reasons to disqualify EDF: it has not yet presided over a Chernobyl, thank goodness.

The conservative opposition approves of this plan and has reassured the energy companies that they will not change it if they are lected.

EDF’s first approach to take over British Energy was discouraged by British Energy’s board, but the government encouraged the takeover, which I find puzzling. Our present energy problems in the United Kingdom arise mainly because the last few governments washed their hands of energy, allowing the energy markets to dictate how much we can have and the price we have to pay. This is not a satisfactory way to organise a key requirement of any modern civilised society.

At one time UK had its energy controlled by a trade Union – the National Union of Miners. Mrs Thatcher (and in fact everyone else) understood that putting control of energy into the hands of a few entities enables those entities to direct the government, rather than having the government act in accordance with its manifesto. It was demonstrated by the three day week fiasco, in the 1970s, and although Mrs Thatcher’s actions have been portrayed as a dispute with the miners, they were nothing of the sort. She was trying to regain governmental control of a critical necessity of the country – energy. It had been controlled by the miners, who were using their control of it to pursue the interests of their members.

Mrs Thatcher’s solution was to reduce reliance on coal, (which was in any event running out) and take advantage of the newly discovered oil and gas fields in the North Sea. She then set the country on to the path of having energy controlled not by one union but by many energy companies. That competition, it was thought, would work in the interests of the nation.

Of course, the natural tendency of any company is to want to become a monopoly; this is essential to any business thinking. Most businesses aspire to monopolies by using devices such as patents, branding, and trademarks but energy companies at one level try to control fuel and at another level try to build up market share, taking over or bankrupting smaller energy companies.

We have now in the UK a handful of energy companies who have settled into a comfortable quasi monopoly. They have duties to their shareholders which are as distinct and pressing as Unions’ duties to their members. One of those companies – the one that generates electricity from uranium is now going to be just like all the others – outside government shareholder control.

The UK will now lose control of its nuclear generating capacity which is responsible for 20% of our electricity generating power. It will lose in real terms) the ability to direct safety and prices and ultimately disposal of waste materials as the market will be negotiating with the government about these issues not qua shareholders that can ultimately control the board, but qua regulators – simply those that have a democratic mandate to govern. This means little to these huge corporations that, despite their paying lip service to vague ideas of corporate governance, have a sole duty that overrides all others – the duty to shareholders, and the UK will shortly cease to become a nuclear shareholder for about the same sum as the BBC spends each year. Odd, isn’t

Nuclear energy is a difficult issue, because we do not know how to dispose of the waste safely. Being under government control gives some comfort that things will be done properly, in so far as they can be done properly. When nuclear energy ceases to be under government control that crumb of comfort is taken away.

9 Responses

  1. It all screams of crisis management to me.

    We’ve left it too late; we don’t have a pot to piss in; and now the time-horizon is so pressing we are beholden to foreign powers to rescue us (EDF is French Govt.-controlled).

    It’s surely comes to something when a “socialist” Labour Govt., that has extended monetarism far beyond anything Thatcher dared, has found itself forced within the last year to nationalise Northern Rock, prop-up the banking sector with £billions of loans and guarantees, and now submits to another foreign state-controlled company (in preference to overly relying on on another one: Gazprom!) to perform a function it once, Labour would proudly declare, owned as an essential national asset .

    It’s almost humiliating – I say “almost” only because the lights are still on and no one has declared us bankrupt yet.

    The UK is having its subsidiaries bought-out – it’s surely only a matter of time before the parent group of companies becomes just another regional office of another paymaster (arguable already has).

    When the resources are not enough to go around, we’ll either be forced to conduct a management buy-out or, worse (and probably more likely), mutiny against our foreign paymasters to regain control of our own assets again (think TNK-BP).

  2. Yes, it is time to rethink fundementals in energy.

  3. to be honest, without nuclear, Britain will be in a very volunable situation. Against Russia, energy threat is very obivous. Robert, if Russian turns off the gas tap, Britain will be dead in 1 week. Solar thermal just a toy but still better than nothing. Therefore, Mr. Wick now building more Gas Storages, I heard two big plants are coming.

    Why People in Britain has little unwareness of under thread from other country, like Russia, this is all powerless government’s fault. Russian came here and poisoned people using radioactive stuff and bugger off. Useless government with no power to protect its law. Heart breaking. BP’s joint venture’s breakdown is another example.

    come on, British, we need to wake up.

  4. We lost the plot 15 years agp


  5. Hi Robert,
    “Yes, it is time to rethink fundementals in energy.”

    Could you explain more?


  6. 1. Energy should be under state control not private control; only that way can we regulate its use so that it fairly distributed across scoiety and introduce genuine carbon saving measures.
    2. We should create a policy not based upon meeting emission targets but based upon creating as much eenrgy by renewables as possible. this means phasing out coal and oil.
    3. we should invest heavily in developing two technologies at state expense rather than leaving it to the market. the first is carbon capture and the second is safe processing of nuclear waste.
    4. We as a nation must fully control our energy, in the same way that we control our armed services. We do not hire a mercenary army and should not use a mercenary energy supply system.
    5. microggenreation has got to be the subject of a settled defined long term policy; not a series of headline grabbing gimmicks like zero carbon homes and eco towns.

  7. agree with Robert at all time!!!

    Robert, i bet you have enough wealth than most of us.
    Any chance you think about to be a politician, I will be your supporter. But you have to put your words in action but not people’s wealth into your own pocket.

    I think it would be great if you could stand up and do something great for the country and people in a political way instead of business way.

  8. Yuning

    It is easier to criticise than it is to run a country. I think that I’d find it hard to be a politican – they can’t really speak their minds in order to get elected and there is little point in being unelected!


  9. Very interesting site, i have added it to my fovourites. Greetings

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