U.K.'s energy industry on the verge of collapse?

The United Kingdom’s energy industry risks collapse if the government isn’t able to come to terms with EDF Energy on the price-point for electricity from the planned £14 billion nuclear power plant at Hinkley Point.

According to Lord Hutton, chairmen of the Nuclear Industry Association, the strained negotiations could scare future investors away from other energy projects. "If a deal cannot be struck for new nuclear, can it be struck for offshore wind or carbon capture and storage?"

If negotiations do collapse, the future of EDF’s influence in Britain would be uncertain. Currently, EDF controls eight nuclear power plants, employs over 20,000 people and handles 5.7 million customer accounts across the U.K. But these existing plants are projected to stop generating electricity within the next ten years. What then?

Lord Hutton is meeting with senior executives of the French-owned EDF, as well as U.K.’s Energy secretary, Stephen Lovegrove, and Treasury minister, Lord Deighton. The negotiations center on a guaranteed price-point for electricity over the next 30 years – a price which the government plans to subsidize through an energy tax.

However, the two sides appear far apart on the operating costs for the power plant, and the return rate EDF is entitled to. Hutton estimates that roughly £3 billion could but cut from construction costs due to the previous design and development of U.K.’s other nuclear facilities. “Time is of the essence,” he stressed. “EDF Energy has spent £1 billion already and the project is at present costing the company £1 million a day.” (That’s over £100 million EDF’s spent since they missed their December deadline to get the deal done!)

Last week, CEO of EDF Henri Proglio was quoted as saying he expects the two sides to come to an agreement “within a month.” This after EDF missed their March deadline, too.

Critics of the deal with EDF say any agreement will enslave consumers for years to come, forcing them to pay billions of pounds to the French. They also cite recent progress in the natural gas industry as, potentially, a more affordable long-term solution.

Yet nuclear and natural gas are both CARBON-EMITTING sources of energy. If either becomes the predominant industry in the U.K., it will only be contributing to the spiraling effects of global warming.

“Left to its own devices, the market would not choose to invest in capital intensive low-carbon infrastructure,” said Hutton. “This would lead us to a precarious, high-carbon future increasingly dependent on imported gas. This would be absolutely the wrong direction for us to take and is why we must not lose sight of this in the current negotiations.”

He’s right. Just because we’ve relied on fossil fuels since the Industrial Revolution doesn’t mean we should be forced to give-in to the unreasonable demands of greedy corporate executives. The free market should be exactly that – free. People should be free to choose their own energy providers. They should be fear-free to invest in innovative new technology.

Technology like the SH-box by NRGLab. Learn more by visiting nrglab.asia, before the energy crises reaches you and your home.