Thursday, August 04, 2011

MP letter re Nuclear Third Party Insurance

John Penrose MP
House of Commons
London SW1A 0AA


Dear John

Nuclear Third-party Liability

Thank you for your letter of 14th July.  The £140 million cap on operators’ liability has, remarkably, been unchanged since 1996, so it is timely that the Paris and Brussels conventions should be reviewed later this year.

The fact is that £140 million would amount to a small fraction of the full costs of a major release of radiation, including such factors as health costs, lifetime upkeep of damaged foetuses, loss of livelihood, ground denial &c.

A recent study by Versicherungsforen Leipzig GmbH, summarised here , arrives at the conclusion that full third party liability insurance would increase the cost of nuclear generated electricity by (net) 0.14 €/kWh up to € 2.36/kWh (100 year premium accumulation period). In sterling, that is £0.12 – £2.04.

The latest cost assessment for HMG by Mott McDonald (June 2010) gives nuclear electricity a cost of about £0.10 /kWh. Therefore the cost of nuclear electricity would increase by a factor of between 2 and 20.

Despite this significant impact on the price, the nuclear industry can no longer be bailed out of its responsibilities at taxpayers' expense. It has received, and continues to receive a number of hidden subsidies which I will not go into now, but I very much hope that you will agree that irrespective of any other merits or demerits of the case for nuclear power, it is only right and just that nuclear power station operators should carry full third party insurance cover.

I do not need to remind you that our constituency lies only 20 miles from Hinkley NPS, and therefore this is not an abstract matter of interest only to actuaries, but a matter that could make a significant economic difference to all your constituents in the event (which God forbid) of a major release from Hinkley.
I am very grateful, as ever, for your trouble in answering this letter giving your personal views, and also, if you would, for forwarding it to the relevant Minister.

Sincerely

Richard

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