The UK’s energy policy is already, for want of a better word, a shambles. Yet this week’s mammoth loss by key nuclear partner Toshiba has thrown it into further disarray. The Japanese conglomerate’s $6.3bn write-down of its US nuclear division and proclamation that it would reassess overseas projects leaves the new reactor project in Moorside, Cumbria – in which it is a key partner – at risk of collapse. That adds to fears that EDF’s financial troubles and French political uncertainty mean it will not, despite regular assurances, be able to deliver at the flagship Hinkley Point project, and that security fears over Chinese involvement in Britain’s power infrastructure could derail plans for a new reactor at Bradwell in Essex.
This latter site is, as it happens, a mere stone’s throw from my home, and despite the misgivings of some government advisers I suspect necessity may win the day – in fact, it would not surprise me if this project moves quickly up the priority list. The troubles at Toshiba and EDF have led some to suggest that only China now has the will, cash and capability to deliver on the nuclear renaissance that only a few short years ago many saw as the answer to the world’s energy and climate crunch. Since Britain switched on its last reactor in 1995, over 30 have been built in China, with a further 13 under construction there – even France, European’s cheerleader for nuclear power, has only built four in that time. If large nuclear projects are indeed the answer to the UK’s energy needs, the Cameron/Osborne government’s Chinese overtures now look very sensible.
Yet even with Chinese support, Britain’s ability to deliver such major infrastructure upgrades is by no means a certainty – a mess of political and local interests assure that reaching the required democratic consensus is often a laborious process that takes many years. Indeed, it is the local interests that are often the most difficult to overcome, a fact witnessed not just in persistent opposition to large infrastructure projects such as new nuclear or high-speed railway and airport expansion, but also in widespread opposition to housing expansion: the scourge of so-called ‘Nimby-ism’. While opposition to a new nuclear plant has gathered little momentum in my district, new garden suburbs have been years in planning and frequently confronted by vociferous local objections. Read the local paper, in fact, and there hardly seems to be a development – large or small – that does not attract local ire that all too often results in rejection at the planning stage. It seems unlikely that the government’s recent housing white paper will do much to break this deadlock.
It is often suggested that the attraction of shares in housebuilders and construction groups is that they are soon to be major beneficiaries of the existing shortcomings of Britain’s transport, housing and energy infrastructure. The reality is that progress is likely to be slow and expensive – investors should manage their expectations accordingly.