Nuclear diligence is due
It was announced yesterday that leading UK steel company Sheffield Forgemasters International Ltd (SFIL) are to be loaned £80 million by the British government to ‘install the country's first 15,000 tonne forging press to make ultra-large nuclear components’
We could ask why SFIL is borrowing from the government and not a commercial lender, but if we start looking at the nuclear industry’s inability to exist without cheap cash from it government sugar daddies we’ll be here all day.
Instead we’ll focus on SFIL’s excitement at the deal. That’s a lot of money we’re talking about and will, apparently, put the company ‘in pole-position to capitalise on huge international demand for safety critical forgings’.
There is, however, a slight problem. Right at the bottom of SFIL’s joyous press release we get…
Today's announcement is subject to final due diligence which will be carried out over the coming weeks.
Funny they should mention due diligence (that is, the investigation of a business before a contract is signed). Just last week, Craig A Severance, editor and founder of Energy Economy Online, outlined in a presentation to the GPPi - Global Public Policy institute Nuclear Conference the five core questions that the due diligence process should ask…
1. Does the proposal actually meet customer needs?2. Can the company afford the project?
3. Are Cost Projections Reliable?
4. Assessment of the Competition
5. Are Revenue Projections Reliable?
Guess what? According to Mr Severance, ‘new nuclear power does not meet any of the five tests’.
So, with the core questions of due diligence laid down so clearly, we can now expect them to be addressed by the due diligence of SFIL’s forging press project and others like it, can’t we? What are we saying? Nuclear power hasn’t survived for 60 years by abiding by the standards applied to normal businesses. As Mr Severance says, ‘new nuclear power likely cannot succeed as a business proposal and thus would require massive government support’.


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