On Monday, the UK woke-up to the news that the government had struck a deal to build our first new nuclear plant in over 18 years. The 3.2GW plant, named Hinkley Point C, has been touted as a job-maker and a boost to our energy security. Worryingly, however, the design of this nuclear reactor may be flawed, potentially exposing the UK to huge financial risks, as well a gravely unsafe nuclear plant.
The group of firms responsible for building Hinkley Point C; EDF, Areva, China General Nuclear Power Group and China National Nuclear Corp, intend to use nuclear reactor technology that has not yet proven to be successful. In fact, it has caused huge time delays and spiralling budgets in other nuclear projects that are yet to become operational.
Even Ed Davey, the Secretary of State for Energy and Climate change has admitted in an interview that the projects using the same nuclear reactor have a track record of mistakes.
Podcast of the interview with Ed Davey:
Hinkley Point C will use Areva's European Pressurised Reactor (EPR) nuclear technology. It is the same reactor being used in the Flamanville 3 plant in France and two reactors in China, which are all EDF projects. The Olkiluoto plant in Finland, being developed by Finnish utility Teollisuuden Voima, is also using the EPR.
The construction at Flamanville has overrun by four years and costs have doubled. Olkiluoto, meanwhile, has been hit by delays of over six years. Some experts have estimated its budget has tripled. Less is known about the status of the Chinese power plants.
It is probable that Hinkley Point C may meet similar technical difficulties to that of Flamanville and Olkiluoto projects, since these engineering issues have not yet been resolved.
"Nobody is taking bets at the moment. Even EDF are in despair about the EPR reactor," said Paul Dorfman of the Energy Institute, University College London. "EDF argue that the Chinese projects are going well. But there are rumours that they're facing similar problems to Flamanville and Olkiluoto."
Moreover, the major issues with this reactor lie with its computerised control system, known and the instrumentation and control system. Experts believe that the computerised back-up system is too similar to the front-end computer. So, if a fault, either technical glitch or cyber-attack damages one of the computers, it will ll likely cause the whole operational system to crash or become uncontrollable.
"If a technical problem occurs with the plant, you need an entirely independent back-up system, which there isn't. So if you lose the first system, it might take out the second system. This is a problem with the plants being built in Finland and France." Stephen Thomas, professor of energy policy at the University of Greenwich.
Unlike most reactors, the EPR does not have manual shut-down system, leaving it further vulnerable for malfunction.
The UK government's Office for Nuclear Regulation (ONR) flagged problems with the instrumentation and control system during its design assessment process. In its quarterly updates on progress, each aspect of the plan was graded by a traffic light-style alert system that represented the difficulty of solving the issues raised.
In August 2012, six issues related to the instrumentation and control system were highlighted. Two were graded as "amber", meaning that remedying the issue is feasible, but needs prompt attention. Four were given a "red" alert, which, according to the report means the resolving of these issues are "in serious doubt with serious risks apparent".
But in December 2012 the nuclear regulators approved the EPR design, signing off all of these alerts without much explanation. Many experts have questioned how this is possible, especially since the design faults have not yet been rectified at the Finnish and French nuclear plants. These reports can be found on the ONR's website.
"It is critical that... we don't make the same mistakes as Flamanville and elsewhere, where they hadn't fully thought through the reactor design and the safety issues before they started building. That's one of the reasons why the costs there came in so high," said Ed Davey, in an interview in May.
The deal for Hinkley Point C is being subsidised through a "contracts for difference" (CfD). This contract gives EDF and the other firms a guaranteed set price of £92.50 per megawatt hour of energy the plant produces, which independent of price movements on the electricity market. Energy suppliers will buy energy from Hinkley Point C at the market price, but since wholesale electricity prices are about half of that of the strike price, the remainder of the funds will be topped up by the government. The 40-year deal has been estimated by analysts to be worth upwards of £40bn.
Building a nuclear plant is costly - the budget for Hinkley Point C stands at £16bn - and the strike price the government has awarded to the project is considered by some as low. Should the timeline and budget for the construction of the plant run over, the companies involved could be left seriously out-of-pocket. Notably, the government issued a statement in May to say it expects the Hinkley Point C project to take longer to build than subsequent projects of the same design.
This has led industry experts to believe the contract for building the plant will include confidential clauses that will allow EDF and the other firms involved to receive additional funds from the government should the project's budget over-run.
Also, the UK's Department of Energy and Climate Change has said that it will have the powers to change the terms of subsidy agreements brokered with low carbon energy generators without public disclosure through its electricity market reform bill.
There has been speculation for some time over a paragraph in the draft electricity market reform bill that seems to give DECC the authority to confidentially change the terms of an investment contract with energy generators. Section 3 sub-paragraph 3 of the draft of the new electricity reform bill states that information can be kept confidential if "the disclosure of which, in the opinion of the Secretary of State at that time, would or would be likely to prejudice the commercial interests of any person."
In response to questions about specific sections of the draft electricity market reform bill, a DECC spokeswoman said in April: "We have committed to laying before Parliament and publishing the terms of any contract including the strike price and reference price. Some limited terms, however, may not be made public for reasons of confidentiality or commercial sensitivity."
When I asked in an about these clauses, Ed Davey has also alluded to their existence. "You're tempting me to tell you about negotiations which are commercially sensitive and which I've not told anyone else about," he replied.
This nuclear deal, however, is anything but commercially sensitive. Vast sums of the taxpayer's money that is being ploughed into this power plant. The government should be called on to release the full terms of the contract it has made, including any secret plans to increase funding for a project as large and as risky as this.