Since its inception, critics of nuclear power have concentrated on the industry's lamentable safety record, its growing and deadly radiological legacy for future generations and its links to military development and maintenance of nuclear weapons.
But the fraud at the heart of the economic case for nuclear power has received less attention. The murky world of nuclear economics reveals how an inherently unreliable and unsafe range of military-born technologies have been sold to the public on the basis of ideologically driven fantasies of strategic energy security and creative accountancy. From the start there has never been any intention to take account in any nuclear energy programme of the calculation, let alone funding, of the long-term decommissioning and waste management costs. As a result the market has never been able to deliver nuclear power and the state has always had to underpin and subsidise the nuclear power industry.
After the defeat of the miners in 1985, Margaret Thatcher was confident that the way was open for the wholesale "liberation" of energy markets through the privatisation of the gas, electricity and coal industries. The centrepiece of this "brave new world" was to be a massive renaissance of the UK nuclear energy industry.
A key figure was Walter Marshall, who as chairman of the Central Electricity Generating Board had personally assured Thatcher that the power stations would stay open in defiance of the "bully boys" of the National Union of Mineworkers throughout the strike.
Marshall was also a fanatical nuclear champion who conspired with the nuclear plant companies to keep the true cost of nuclear power secret.
But by the mid-1980s the UK nuclear industry was, according to the Financial Times, a "basket case; a mish-mash of unreliable reactor designs, perpetually underperforming and superannuated on endless subsidies to the detriment of the consumer and cleaner and safer energy technologies".
One sign of this was that (despite Marshall's assurances) nuclear failed miserably during the Miners' Strike. Though it accounted for around 20 percent of total UK energy capacity, and was allowed to suspend normal operating procedures, nuclear still only managed to provide 11 percent of UK power throughout the strike. Contrary to popular belief, it was heavy fuel oil that filled the power gap.
Marshall argued that these problems, however, were a result of the suffocating influence of the state ownership of the UK electricity supply industry. He claimed this had led to a culture of caution and hesitation, the outcome of which had been a first generation of Magnox reactors with no uniformity of design and a hopelessly low power output.
These had been followed by a new reactor series, the over-complex AGRs, a uniquely British gas-cooled system. But the repeated failure of the AGRs to perform to specification combined with dismal reliability reinforced the myth that there was nothing about nuclear power that a good dose of market forces and the more tested Pressurised Water Reactor (PWR) design couldn't put right.
Supporters of energy privatisation pointed to France where nearly 80 percent of electricity was generated from a largely PWR stock of reactors. They conveniently omitted the fact that the French nuclear effort was a wholly state-owned operation. But by 1989, the eve of electricity privatisation, the nuclear cat was out of the bag as a picture of the real costs of nuclear power had been revealed by industry whistle-blowers and nervous market analysts.
The government was forced to separate nuclear from the energy privatisation process. But such was the abiding fantasy that nuclear power would one day come good, the industry was to be divided into different units. British Nuclear Fuels Ltd at Sellafield was to continue as a state-owned fuel producer, reprocessor and waste management company. Magnox Ltd was to become the state-owned operator of the ageing Magnox reactors, while British Energy would assume responsibility for the seven AGR stations as well as the new PWR reactor at Sizewell B.
It also assumed that the future costs of decommissioning nuclear plants and long-term waste management would be underwritten by the Treasury. The sorry tale of the economics of nuclear power was summed up by the reply made by one energy industry broker when asked by the Financial Times about how he would approach the privatisation of the nuclear industry: "Not even with a ****ing bargepole, nor for all the tea in China!"
The nuclear industry and its PR machine have never been wanting when it comes to selling nuclear power as safe, peaceful and economical. But evidence to an inquiry into the Hinkley Point C plant and to a later House of Commons energy select committee showed that nuclear electricity from a PWR would be four times as expensive as coal and at least twice the cost of available renewable sources.
The nuclear lobby responded by arguing that as a carbon-free source of electrical power, nuclear was a risk worth taking and, what's more, as the industry continued to learn from past errors, subsequent reactor designs would be safer.
And it is within this context of genuine concerns on global warming and long-term energy security that nuclear power is trying to make a comeback as your leaner and greener source of reliable power. But it is an argument that has yet to win over support from recession-racked and risk-averse investment banks and brokers. For their part, the Tories have never departed from their nuclear fantasy - something fuelled by a tribal fear of the miners and a dream of controlling sources of energy with no heed to working class power in the form of militant unions.
But when it comes to funding such extravagances, the economic realities and market disinclination for risk clash with the fact that everywhere in the world where nuclear reactors operate, the state, as banker of last resort and as the guarantor of endless subsidies, has to be prepared to ride shotgun forever.
Ever since the self-inflicted market failure of the early 1990s governments - whether Tory, Labour or the current Tory-Liberal coalition - have been determined to help the nuclear industry not only survive, but also reinvent itself.
A levy was imposed on coal and gas stations to subsidise the uneconomic nuclear plants, known as the Non-Fossil Fuel Obligation. Eventually this fell foul of the EU competition directives on energy subsidies and so the levy is being phased out. Yet even when the nuclear industry was in receipt of a direct subsidy, and with all its liabilities covered by the taxpayer and with a guaranteed share of the UK power market, the industry consistently failed to attract private investment.
Before the last election the Labour government, anticipating a forthcoming power capacity gap and accepting the "green" message of the nuclear lobby, set up a review that concluded that nuclear had "a vital role to play in helping the UK achieve its carbon emissions targets in line with international protocols". The nuclear industry had got its long awaited second chance.
The core of this wholly specious argument is that although nuclear power is expensive and carries with it quite indeterminate risks and liabilities, these are prices worth paying in order for the UK to meet its environmental obligations.
For the incoming Tory-Liberal coalition in June 2010 this was music to their ears. The merest sniff at the chance of a role in government saw Chris Huhne dump over 20 years of Lib Dem opposition to nuclear power and the new coalition wasted no time in seeking bidders to form prospective consortia to build and operate a new wave of reactors.
It's worth reminding ourselves of the present sorry state of the UK nuclear industry. The current operational picture is shown in the table above.
As can be seen from the table 6,565 MW of nuclear capacity is due to close within the next eight years and by 2024 there will only be a single PWR generating a mere 1,191 MW into the system - about 6 percent of the UK's total power requirement. By any measure, this is evidence of an industry in decline and a mere shadow of the nuclear brave new world that Marshall and Thatcher heralded in the early 1980s.
But by the time the AGR closures are under way, the capacity gap in the UK system will be on the way to becoming a chasm. Estimates from the National Grid Company suggest that in order to meet base load energy requirements by 2030 there needs to be the equivalent of 4,000 MW of capacity built and commissioned every year for the next decade. This is due to a combination of older plant retirements and nuclear closures as well as the phasing out of coal due to environmental factors where, due to tightening regulations, the 21,000 MW newly refurbished coal stations are due to retire by 2026.
What the architects of the UK's almost uniquely inept attempt at electricity privatisation had failed to take into account was the inevitable tendency for investment to flow into short-term/low-risk and less capital-intensive projects that offered the highest rate of return. And in a climate of EU deregulation of the gas markets any available "smart" money was going to go on cheaper gas turbine stations.
The result is the UK is now within three years of being dependent on gas supplies from Russia and Central Asia for some 75 percent of its needs. In the immediate term the premature depletion of UK gas reserves, plus the rising cost of imported gas, means that the price of gas-fired energy generation is due to rise to around four times the declared cost when the big contracts were struck ten years ago.
As a consequence, gas stations bidding power into the electricity trading price system from 2016 onwards are going to be displaced by the modified coal stations for base load supply on the grounds of excessive fuel cost. Those gas stations tied into the high-cost later gas contracts will have to settle for operating at lower load factors (and hence lower revenues), accept a lower income load-following role or alternatively be retired from the system.
At the same time the gas station operators may decide to divert their gas away from high-risk power generation and instead opt to sell their contracted gas into the domestic consumer market where demand is assured and the customers are both captive and provided with scant protection from a toothless regulator.
Nuclear power's new dawn
After an initial flurry of interest the only serious bidders to build and operate new nuclear reactors turned out to be E.ON/RWE, a German company, and two French companies, one state-owned, EDF/Areva, and one part state-owned, GDF Suez.
In early April this year the E.ON/RWE bid was withdrawn with "insufficient incentives" being cited as the reason. A few days later, the GDF Suez bid was also withdrawn.
In response to yet another energy market failure, the government is again looking to create some kind of carbon pricing and trading scheme to woo would-be nuclear players back into a rigged and distorted UK energy casino.
The latest attempt to install a subsidy advantage for nuclear power would be through allowing forward contracts for nuclear stations based on so-called "contracts for difference" which would be intended to act as a price guarantee. A leaked Department of Energy and Climate Change document showed that this would be through allowing the electricity regulator to permit power prices to creep up to a level whereby the nuclear stations would be trading in high-cost electricity "under the radar" of higher bills ostensibly made higher by the overall rising cost of "green" energy.
Another nuclear subsidy ploy came to light in January when it was revealed that the UK government was planning to cap accident insurance liabilities for new nuclear operators in order to ensure that the currently quoted premiums did not "unfairly" impinge on "an otherwise competitive price of nuclear electricity". It had been estimated from quotations by leading insurance analysts that the operational risks arising from loss of power sales alone arising from a "containable" mishap would demand premiums "that would more than double the price of nuclear power".
The cap on liabilities would be set at $1.7 billion, even after Fukishima. Contrast this to BP's claims set-aside of $41 billion for payouts following the Gulf of Mexico disaster.
As with the "contracts for difference" scam, this latest insurance fiddle is probably in the first instance to be considered unlawful by the EU commission. And across Europe nuclear power is in retreat. Since the disaster at the Japanese nuclear plant in Fukushima, both Germany and Italy have announced their intentions to phase out their existing plants and cancel future planned reactor construction. The new French president, François Hollande, has declared his intention to hold an immediate national referendum on the future of France's nuclear programme.
It must be with a sense of bitter irony that the Tories can look back on over 20 years of cumulative energy policy which promised that the market would be a trusted servant and the "customer would be king" and consider the results: the total failure of competition and diversity of supply; the near total demise of the nuclear industry along with the demonstration that nuclear power cannot stand the market test and has to be subsidised. Added to this has been the virtual extinction of the most economic and technically advanced coal industry in Europe and the near depletion of UK gas reserves through the "dash for gas" for power generation.
This has left the UK with an almost total dependency on fuel imports and a growing generating capacity gap that now threatens long-term security and affordability of supply. And finally, of course, there has been a total failure of utility regulation and protection of consumer interests, resulting in higher prices and a doubling of households known to be in energy poverty.
An equally bitter irony will be that in the future when the lights do begin to go out, the political establishment will have only a slavish and ideological fixation with the market to blame rather than the long-gone National Union of Mineworkers.
And in a way the dismal episode of the fortunes of energy privatisation show reflects the current state of British capitalism. The ideological obsession with the market now ensures that capital investment in the physical and social infrastructure is near impossible without the surrendering of all previously statutory responsibilities and with the gilt-edged promise that the only duties are the remuneration of the shareholders and the maximisation of profit.
We can see the unfitness of capitalism to be entrusted with the responsible provision of energy even at the scale of one economically advanced, medium-sized nation state. As such it represents in microcosm the unfitness of capitalism to service the most basic long-term energy requirements of a modern society.