Nuclear energy’s future as part of a low carbon energy mix is uncertain. Despite having strong support from the public, politicians and academics, nuclear energy can still be seen as outdated, dangerous and expensive, and which lacks the flexibility and price that newer sources of energy have, such as solar and wind. Nuclear energy’s future now lies in the balance, and with global temperatures still rapidly climbing, the time to fix net zero’s Achilles’ heel is running out.
Nuclear energy has strong potential for fighting climate change and the world has already benefitted. The International Energy Agency states that it helps 32 nations avoid using 180bn cubic metres of natural gas a year. France, for example, draws up to 70% of its electricity from nuclear energy, which provides French consumers with consistent low cost and low carbon energy.
If nuclear energy supplies these benefits for consumers and the environment, why aren’t more nuclear power installations being built? Why are renewable sources of energy cheaper to build while nuclear costs only rise further? And why does the future of nuclear power hang on a knife’s edge during every election cycle?
Capitalist economics and the energy markets
One of the key reasons why nuclear energy’s future is so uncertain is due to monetary policy. Under a capitalist system where profit and growth are the main driving factors behind government policy and private business, nuclear energy will always struggle.
The high upfront capital cost and time needed for a nuclear power plant to make a profit effectively makes it impossible to rely on private markets for investment. Despite government attempts to bring together both state and private funding, this has done little to encourage public and market confidence in nuclear power.
The funding methods for the UK’s latest nuclear power plant, Hinkley Point C, plainly demonstrate why private funding is not suitable. The Hinkley point C audit finance report illustrated clearly that two-thirds of the cost of Hinkley is interest payments, avoidable with government funding. During the coalition, the ill-thought-out decision by the Liberal Democrat-run Department of Energy and the Treasury to force the energy supplier EDF to fund Hinkley Point C’s construction using private capital has seen the cost of the plant rise to £26bn. The cost of Hinkley Point C largely stems from a lack of government long-term planning and political consensus, as well as free market economics.
The role of private and state-owned companies
Philip Andrews-Speed, at the Oxford Institute for Energy Studies, and the World Nuclear Association examined government control in the nuclear industry. They describe how state-run state-financed nuclear energy can rapidly develop and how fleets of nuclear power plants, based on one design and built by one state-owned energy company, can be deployed, such as EDF in France.
Involving private companies with limited balance sheets and capital in large energy projects, which do not guarantee profit returns within a few years of investment, easily scares off private investors.
The development of nuclear energy as a contributor to net zero provides even more reason to bring an end to neoliberal market capitalism in favour of a socialist planned economy to avoid the profit seeking of investors and shareholders. In the UK this led to the recently partially-privatised company British Energy reaching out to the Government for bailouts after misleading investors about the company’s financial health.
Bringing government control back into the energy sector, regulating the energy markets, and introducing long-term investment from the Treasury with low interest loans could allow for the rapid development and deployment of new nuclear power plants.
Government financing of nuclear energy is recognised as of vital importance by the International Atomic Energy Agency (IAEA) which outlines methods for achieving this. The question therefore remains: is large-scale nuclear energy still a viable option in a market-orientated energy system? Is there still room and time for governments worldwide to play a part in the industry?
Conservative party uncertainty
With the next UK general election in late 2024, more attention is being paid to policies for the next election. Labour, the Liberal Democrats and the Green Party are positioning themselves to appeal to voters conscious of climate change by adopting strong positions on the expansion of green energy. But where does this leave nuclear energy?
The Conservative Party has remained quiet on nuclear energy for an extensive period. With the economy worse for wear compared to the other members of the G7, Sunak seems to be directing his political capital towards policies which distract voters from the dire state of the UK economy.
Since 2010 the Conservative Party has been pro-nuclear as seen in all their manifestos; however, slow progress and expensive projects throw into doubt that this trend will continue. With high inflation and the need for the Conservative Party to stick to fiscal responsibility, it is unlikely we will see a potential Conservative government fork out billions of pounds for new nuclear energy development despite the climate crisis.
Labour’s undetermined position
With the Conservatives being discounted as a potential nuclear backer, Labour could very well manoeuvre themselves to become the main party who are strong on nuclear power. According to poling by YouGov, Labour Party voters remain largely mixed on the issue, which leaves the final decision with Starmer and the shadow cabinet.
In a speech two months ago, Starmer confirmed his support for nuclear power to boost the economy and create jobs. This largely aligns with Starmer’s positions on other policy areas, with his agenda to swing the party rightwards to steal Conservative voters by using their rhetoric surrounding growth, jobs and the economy.
With Labour’s rightward swing, I would argue it is unlikely that Starmer will pursue a large-scale state-funded effort to build new nuclear generators, as the risk of alienating right-wing voters with left-wing economics is too high.
With both major parties having some level of nuclear support among voters, MP’s and party leaders, there is arguably some room for optimism. Whichever party gets into government, in theory they could continue the expansion of nuclear energy in some form; this could include more funding for the Rolls Royce SMR project or the beginning of Sizewell C. However, because both parties may want to appear fiscally responsible, we are unlikely to see massive public spending on nuclear power during an economic climate racked with high inflation and low growth. This leaves the UK nuclear industry in limbo, with support in theory, but no political capital to follow this through.
In 2021, an Institute of Economics Affairs survey showed that 67% of young British people (ages 16-34) want a socialist economic system. Dr Kristian Niemietz said: “This is a long-term shift in attitudes, which is not going to go away on its own.”
This finding, together with environmental action at an all-time high in the UK, the path of nuclear energy is clear. Rather than continuing our faith in a broken political system and broken economy, the time for genuine system change is upon us.
Putting people and the planet before profit is the fundamental principle I believe we need to follow to capitalise on our vast potential in the nuclear industry. Long term, environmentally conscious planning in the economy is not only desirable but essential to avert the disastrous effects of the climate crisis we are seeing around the world today.
Socialism as a political and economic ideology is the antidote we need to end the uncertainty surrounding nuclear energy’s political and economic future.
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