While companies are open to investing in new nuclear power stations, the taxpayer must bear the majority of the risk. KPMG’s research platform has shown this to be true in a recent report. Follow the MoneyWrite about Thursday. This includes compensation and unanticipated financial setbacks if politicians abandon nuclear energy.
Many political parties consider nuclear energy an important tool in achieving climate goals. This is because a nuclear power station can be built in at least ten to ten years. This would mean that such power plants would not be able to contribute to the goal of emitting 49 per cent less CO2 by 2030.
It is also extremely expensive to build a nuclear power station. It costs between 7 to 13 billion euros to build one plant, according to researchers.
Many parties, including VVD, PVV and FVD, don’t want to abandon the option. They see value in more Dutch nuclear energy. Therefore, the VVD conducted an investigation to determine whether the business community was willing to invest in nuclear power plants.
This willingness is evident. However, the government is the most vulnerable, according to banks, pension funds and energy companies. Large construction projects often turn out to cost more than originally thought. The same danger lurks at nuclear power stations.
This can be seen in similar projects overseas, where costs have risen dramatically. This was the case in Finland, France, and the United Kingdom. This is why investors would not wish to pay such high costs for Dutch projects. A large portion of the construction costs would be covered by the State in any event.
Compensation for a Changed Policy
In some cases, the cabinet might change its mind following elections, or want the power plants to close early. Companies may want to negotiate in advance with the government about compensation.
This may be due to the fact that the cabinet decided to shut down coal-fired power plants. Since then, operators have taken legal action against the cabinet and are seeking compensation. This is what potential investors and operators of nuclear power stations want to avoid.
According to researchers, companies can only invest in nuclear energy if there is sufficient social support as well as a stable and consistent political policy. The report states that private financing is not possible if one or more of these conditions are not met.
Also, government pays the dismantling costs
The taxpayer and government should pay for the processing of radioactive material, any additional safety requirements, and for dismantling the power stations. These costs could amount to hundreds of millions of Euros per nuclear power plant. Follow the Money. These construction costs add to many billions.
According to the research platform, it is natural that investors would ask for government guarantees. It does however pose a problem for the future arrival of nuclear power plants.