04 JUL, 2024 BY THOMAS JOHNSON
Government work to justify classifying nuclear energy generation as “environmentally sustainable” cannot be produced as it is incomplete, despite ex-chancellor Jeremy Hunt making the announcement in the 2023 Spring Budget, NCE can reveal.
NCE submitted a Freedom of Information (FOI) request to the Department of Energy Security and Net Zero (DESNZ) requesting all the documentation that was produced to back Hunt’s claim, but was refused because it is “still in the course of being completed”.
In March 2023 during the Spring Budget statement, Hunt announced the government would be consulting on listing nuclear energy as “environmentally sustainable” in a bid to increase private investment in the sector.
Hunt stated nuclear was a “critical source of cheap and reliable energy” to meeting the UK’s net zero obligations.
On the reclassification of nuclear energy, the government’s budget document stated: “Nuclear energy will also be included in the green taxonomy, subject to consultation, encouraging private investment.”
DESNZ’s reasoning for not responding to the FOI is due to the fact it has not completed the consultation as to whether it should go ahead with its plans to deem nuclear as “environmentally sustainable” which it started 16 months ago.
DESNZ stated that it “does hold information in scope of this request, however we will not be releasing this at this time as it is covered by exemption 12(4)(d) which states ‘a public authority may refuse to disclose information to the extent that the request relates to material which is still in the course of completion, to unfinished documents or to incomplete data’. Your request falls within the scope of this provision because the requested information relates to material still in the course of completion”.
It continued: “In order to apply the exemption detailed above we must also consider whether withholding such information is within the public interest. The consultation document to which the requested information relates has not been published, meaning the policy pertaining to the content of the consultation document is not finalised. For this reason, we feel it would not be in the public interest to release the information at this time.”
In its Mobilising green investment: 2023 green finance strategy document related to the consultation for nuclear to be included within the green taxonomy, it states the government intended to consult on this in autumn last year.
It further stated the consultation and getting this policy through was a priority that would be achieved by Q1 of this year.
Reaction
Stop Sizewell C executive director and company secretary Alison Downes believes labelling nuclear as green was a ploy to allow investors to justify their investment in the project.
She said: “The green taxonomy seems to be the final piece of the puzzle because the whole emphasis behind adopting the RAB model was to coax non-typical investors, like UK pension funds.
“Obviously the theory behind labelling nuclear as green would allow them to tick another environmental, social and governance (ESG) box that would enable them to justify the investment.”
Downes hypothesises that the reason behind the policy review not being completed yet could be due to the fact that Sizewell C’s recent attempt at leveraging private capital for the project in Spetember last year didn’t bring forward any atypical investors.
“If investors have an appetite for nuclear then great but if they don’t, this isn’t going to tip the balance,” she said.
“In our regular engagement with government officials they kept saying it’s coming, it’s coming, which in government speak it is ‘in due course’, which means sometime soon, maybe never.
“It was very much plugged for Q1 this year and then it didn’t happen.
“I wonder whether the fact they launched the capital raise last September where they had to get bidders to go through the pre-qualification process and it was apparent that very few were from that target market.
“Suddenly they mave have thought if we’ve got a lot on our plate, is it a priority to push this taxonomy review through?”
UK/Ireland Nuclear Free Local Authorities (NFLAs) secretary Richard Outram said it is astounding that the government was unable to come up with any justification for making the claim back in March 2023.
He said: “It is notable that even now 16 months after Jeremy Hunt claimed that nuclear is a ‘sustainable and environmentally friendly energy generation solution’ that officials in the DESNZ despite their resources, are unable to come up with the justification that underlines this claim.
“That says a lot.”
Stop Sizewell C and other anti-nuclear groups maintain that nuclear is not a environmentally energy generation solution due to the waste it creates, its contamination of the earth and other nature surrounding the power plants and the highly emission intensive methods of decommissioning old plants.
Outram continued: “The NFLAs believe that nuclear is simply too costly (Hinkley Point C’s original budget was £18bn now current real budget is £46bn and rising), too slow (Hinkley Point C was meant to be generating power to cook turkeys in time for christmmas 2017 but will now be 2031 earliest), always comes with the possibility of an accident, always cause environmental contamination, and leaves a massive and costly legacy of decommissioning redundant nuclear power plants and managing and disposing of nuclear waste (NDA current estimates £260bn).
“Events in Ukraine have also demonstrated that nuclear power plants represent a massive target and a potential ‘dirty bomb’ in the event of war with a hostile state actor and Britain’s nuclear reactors have historically been powered by uranium from Russia which is now an unreliable supplier as it is that hostile state actor.”
The NFLAs are instead calling on an energy strategy that prioritises the reduction of energy usage in the UK.
“We would see a truly ‘sustainable and environmentally friendly’ energy strategy as one instead predicated upon reducing energy use and addressing fuel poverty through implementing a nationally funded government programme to retrofit insulation to inefficiently heated homes and public buildings, coupled with a rapid expansion of generation using a range of proven renewable technologies that draw upon the natural resources that this island nation possesses (the sun, wind, tides, waves, rivers, and geothermal heat) alongside storage solutions, smarter grids and greater grid interconnection,” Outram said.
“The NFLAs also strongly support domestic, community and municipally owned renewable energy generation, and we have advocated for a more favourable regulatory regime and greater financial support to enable this to grow, to empower households, communities and local authorities to be ‘green energy independent’, and to allow local generators to sell electricity to the grid.
“For us every pound spent on nuclear is a pound wasted – it represents a massive opportunity cost – when that money could be far better deployed on generating electricity through renewables to reduce soaring energy bills, help eliminate fuel poverty, and tackle climate change now at an affordable cost, not in the never-never at an astronomical one.
“One of the NFLA’s first tasks, upon the installation of a new government in office, will be to make representations to the newly appointed ministers in Desnz o advocate for this vision, and ask them to confine plans for new nuclear to the bin.”
Sizewell C
A big part of the allocation of nuclear as sustainable surrounds the final funding decision of the proposed Sizewell C nuclear power plant, planned in Suffolk.
The government has to date invested £2.5bn in the project in numerous tranches but intends to find private investors to cover the majority.
It commenced the search for investment partners in the circa £20bn project last September. It said it is seeking companies with “substantial experience in the delivery of major infrastructure projects” and added “ministers will be looking for private investors who can add value to the project and will only accept private investment if it provides value for money, while bolstering energy security”.
The former government had promised to cement the final investment decision in the last parliament but this was scuppered by the announcement of the General Election, leaving the funding for the station in a state of limbo.
The project will be funded through a regulated asset base (RAB) model, like those used on Tideway and Heathrow Terminal 5. This sees the investors pay a large upfront contribution that is recouped through a surcharge on taxes, with the amount being set by an independent regulator, in this case Ofgem. While it means a small increase in taxes, the government estimates it will save consumers at least £30bn on the project.
The RAB model means the risk is shared between investors and taxpayers and in theory incentivises the investors to push the project through to completion on schedule.
Potential investors were required to register their interest by early October 2023 but there has been little news in the nine months since then.
