Both the nuclear energy industry and the tidal energy industry are prepared to build new generating capacity but only if the taxpayer guarantees the return of their investment. This is a new kind of capitalism – one which will only take risk if every conceivable risk is covered. The risk reward ratio for these projects, if implemented with a taxpayer guarantee would be virtually 1:100,000.
The tidal and nuclear businesses that plan these great infrastructure projects would, with such taxpayer guarantee, find it easy to raise money for the project because the investors would have a state guarantee that the return on investment would be paid. In fairness, they probably will find it hard to raise the finance for these projects without such a guarantee, because the projects are long term and will not start showing any return on investment for ten years or more.
In the case of the tidal generation project which involves a barrage across the Severn Estuary, the government argue that there is no strategic or economic case for the project. I could understand an argument that there would be environmental damage if the project proceeded (although I am unsure whether there has been sufficient study to properly assess the environmental damage and compare it with the environmental benefits) but the strategic case is simple for both tidal energy and nuclear energy: we shall need the electricity generated for many years to come.
I have always been opposed to nuclear energy because of the risks to human health. My mind is not made up on tidal energy because I have not seen sufficient evidence.
It is clear that the concentration on big projects to generate energy seems to dominate government energy thinking. There is no cohesive strategy on energy policy; there are many energy policies rather than a single policy. It is as though the government are hoping that by subsidising some wind turbines and some solar photovoltaic panels, while keeping the old generation stations going will provide energy over the next twenty years. It is a fond hope, just as the idea that present energy policies will reduce the impact of fast climate change is another fond hope. the two fond hopes are too fond hopes.