Centrica's exit isn't as big a deal as you think

Centrica withdrew from new UK nuclear projects.

Yesterday Centrica announced it would not take a 20 per cent share in the new nuclear power plant planned for Hinkley Point in Somerset. It was the minority partner with EDF, and leaves the France-based utility holding the entire (potentially £6 bn) can.

Centrica pulled out because of uncertainty on cost and schedule. No doubt its decision is a blow for the project to build a 1650 MW EPR pressurised water reactor—for which, by the way, EDF has not made a final investment decision. But there still are lots of reasons to hope that the project will still go ahead.

First, the current adverse market conditions favour nationalised utilities (or vendors) like EDF for nuclear new-build; whether it is Russia in India, Turkey, Belarus or China, or South Korea in the UAE, state-owned developers have the deepest pockets. They need them: unlike gas or coal, nuclear power plants demand most of their costs up front.

And those vendors that are not state-owned but wish to pursue nuclear new-build have had to act like it. In 2011, GE Hitachi proposed being a major investor in a new reactor for Lithuania (although those plans have probably been shot down by a referendum). Its corporate cousin Hitachi has recently come to the UK and is underwriting its pre-construction safety assessment (for now) as the new owner of nuclear new-build venture Horizon, after Germany-based utilities e.on and RWE sold out. They were beset by problems at home: after Fukushima, the German government quickly arranged a phase-out of all nuclear power plants. Over the next decade, their once-profitable assets will have to be written off.

One nuclear new-build vendor who has so far not pledged to take a share of a new-build project is France’s AREVA (79 per cent owned by the French state). However, its role as the principal contractor (with Siemens) for Finland’s Olkiluoto 3 has become tantamount to the same thing. To land the contract for the first non-France EPR, AREVA agreed with client TVO on a fixed-price contract. Subsequent delays and cost overruns have led to litigation with billions at stake.

Second, EDF’s purchase of British Energy in 2008 really only makes sense in the context of the opportunity for new-build. Seven of the eight nuclear power plants it bought at the time were based on obsolete technology whose potential for long-term operation was iffy (although their lifetimes will be extended by seven years in general). Those assets were not worth the £12.5 bn purchase cost. What was worth paying for, according to this idea, was lots of potential for new-build sites. Backing out now would harm the company’s future prospects.

Third, the UK branch of EDF, EDF Energy, has had a good 12 months. Its performance in 2012 was the best for seven years, which means not only cash in the bank but also a hopeful step away from technical faults that have hurt recent performance. Commercial production of the first units of its new 1300 natural gas plant in West Burton, Nottinghamshire started in 2012 and the rest are due to come online later this year. When Centrica joined EDF in new-build, it also put in a 20 per cent stake in EDF Energy’s operating nuclear power fleet. It has not announced plans to pull out of that investment.

The most important development for EDF’s new nuclear ambitions was that its nuclear reactor design was finally approved by the regulator at the end of 2012. Although it will still have to apply for a nuclear construction permit, obtaining design approval has broken the back of one of the biggest sources of nuclear new-build investment risk: the uncertainty caused by regulatory scrutiny. As of right now, the EPR reactor is the only modern nuclear power plant design that can be built in the UK. The Westinghouse AP1000 reactor is next in line; it is waiting for a customer to  finish the review process.

Will Dalrymple is editor of Nuclear Engineering International

Photograph: Getty Images
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The good, the bad, and the meaningless: Jeremy Corbyn’s “digital democracy” decoded

The Labour leader has promised to “democratise the internet” but which parts of his manifesto would actually work?

Jeremy Corbyn has promised to “democratise the internet”, speaking this morning at the launch of his eight-point digital manifesto at Newspeak House in east London.

“Labour under my leadership will utilise the advances of digital technology to mobilise the most visible general election campaign ever,” said Corbyn, in a clip you might have watched via a livestream on his Facebook page, before it crashed.

His manifesto sets out how Labour hopes to democratise the internet so that “no one and no community is left behind”. Unfortunately, some of the terminology used isn’t so universal. In a bid to leave no one behind, we thought we’d decode the manifesto here.

The good

Universal Service Network

It’s hard to argue with Corbyn’s first and largest proposal – that high speed broadband should be accessible across the country. According to the Labour leader, this would cost £25bn to implement and would be funded by his proposed National Investment Bank, “at minimal cost to the taxpayer”.

Although this is good idea, it isn’t a new one. The Conservatives already announced plans for a similar Universal Service Obligation (USO) in March, whereby everyone has a legal right to request download speeds of at least 10Mbps. A report published by Ofcom last week shows the government faces resistance from internet service providers who don’t want to pick up the extra costs.

The People’s Charter of Digital Liberties

Corbyn’s second most eye-catching suggestion, a digital bill of rights, is a win for anyone wary of Theresa May’s Snoopers Charter. He promises to protect personal privacy and “[enhance] the on-line rights of every individual”.

Platform Cooperatives

Corbyn hopes to “foster the cooperative ownership of digital platforms for distributing labour and selling services”, which essentially means he wants services like Airbnb, Deliveroo, and Uber to be community-run (or, if you want to go there, nationalised). The National Investment Bank would fund these websites and apps, which in turn would allow greater regulations of employment contracts. It’s quite a utopian vision and it's easy to be cynical about how this could work in practice, but were it to work, it could arguably transform the entire economy. 

The bad

Digital Citizen Passport

“We will develop a voluntary scheme that provides British citizens with a secure and portable identity for their on-line activities,” claims the manifesto, explaining this can be used to interact with public services like health, welfare, education and housing. Without even considering any potential security or privacy issues, the largest criticism of this proposal is that it already exists, as Gov.uk’s Verify.

Programming For Everyone

By encouraging publicly funded software and hardware to be released under an Open Source License, Corbyn dreams of a world where everyone can share code and learn from one another. Unfortunately, this opens up multiple privacy and security concerns, and Corbyn's other suggestions for teaching code also already exist, as the EU’s All You Need Is (C<3de) programme. 

The meaningless

Open Knowledge Library

At first glance, Corbyn’s proposal for a “free-to-use on-line hub of learning resources for the National Education Service” is undeniably a good idea. The problem is that the idea ends there, with no real discussion of what it is and how it will work. At present, it simply sounds like a publicly-funded version of resources that are already available (Wikipedia, anyone?).

Community Media Freedom

The entirety of this policy basically boils down to “free speech, yo”, which is, unarguably, fantastic. Unfortunately, the manifesto offers little in the way of explaining how its goals, such as stopping the “manipulation of software algorithms for private gain”, will actually be achieved.

Massive Multi-Person On-line Deliberation

Corbyn’s plan to “organise online . . . meetings for individuals and communities to deliberate about pressing political issues and participate in devising new legislation” is Twitter. It’s just Twitter.

The extras

Outside of this eight-point manifesto, here are some other things we learned today about Labour’s digital plans:

  • According to Corbyn, some MPs don’t turn on their computers because they do not know how to, which, honestly, shall we deal with that first?
  • Team Corbyn hopes that technology – and the visibility it allows – will be Labour’s "path to victory", which is nice, but what he really means is: memes.
  • Corbyn reveals he has an “open mind” about nationalising the broadband network.
  • Corbyn calls online abuse appalling and says that Labour is chasing down offensive material.
  • A team of coders called Coders for Corbyn have released some digital tools to show your support for the leader. Yes, the Corbyn emoji  Jeremoji  is about to be a thing.
  • The entire manifesto features “online” written as “on-line” and really, that is the real issue here.

Amelia Tait is a technology and digital culture writer at the New Statesman.