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Uk Taxpayer May Be Forced To Take On Nuclear Risk After Insurers Refuse To Offer Cover

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http://business.timesonline.co.uk/tol/busi...icle6826650.ece

Taxpayers could be forced to provide commercial insurance cover to the nuclear industry to safeguard plans being considered by ministers to build a fleet of new reactors in Britain.

Private insurers are refusing to offer energy companies full coverage against the risk of a Chernobyl-style nuclear accident, forcing the Government to consider stepping in itself to act as an “insurer of last resortâ€.

The Department of Energy and Climate Change confirmed that PricewaterhouseCoopers, the audit firm, had been appointed to draw up recommendations setting out how the Government could do this.

Simon Hobday, a lawyer for Pinsent Masons specialising in the nuclear industry, said that the situation had arisen because of rules contained in an international agreement signed by the UK in 2004. These will force operators of nuclear power plants to broaden the type of insurance cover they have in place against the threat of a nuclear leak.

The new rules, which were originally due to take effect in 2006 but have been repeatedly delayed, have far-reaching implications for the industry and have led to fresh uncertainty over the cost of building and operating new reactors, Mr Hobday said.

The operators of Britain’s eight existing nuclear power stations are obliged by law to have insurance cover against the risk of a nuclear accident worth up to £140 million per site.

This must cover any claim for loss of life, personal injury and damage to or loss of property for up to ten years from the date an incident takes place.But under the new rules, the requirements will become far stricter — and more costly. Energy companies will have to increase the amount of cover they have in place, to €700 million (£620 million) per site, while the time frame for claims will be extended from ten to 30 years.

New types of cover will also be required, including protection against “economic losses†resulting from an accident, damage to the environment, and loss of use and enjoyment of the environment, as well as the cost of preventing contamination of new areas.

Once more the free market works again.

If it fails just get the taxpayer to stump up the cash.

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Shouldn't oil companies also be made to take out insurance in case their product accidentally destroys civilization?

Sounds fair...

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Guest DissipatedYouthIsValuable

I think it's only right that the anti-public sector screechers should vehemently oppose this shunning of a private solution.

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Aren't most of our nuclear power stations now owned by the French state? So we as taxpayers here will be 'insuring' a French nationalised business.

More evidence of Britain being a 'can't do' culture.

Edited by blankster

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Only £620 million per site?! That would be a drop in the ocean compared to the cost of clearing up a major nuclear disaster close to a big centre of population. Being really cheerful for a moment, if a Chernobyl-scale accident happened at Dungeness and a radioactive cloud rendered a big part of Kent and Greater London uninhabitable, would the financial cost of that be limited to £620 million? £620 billion, possibly...

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Guest DissipatedYouthIsValuable
Only £620 million per site?! That would be a drop in the ocean compared to the cost of clearing up a major nuclear disaster close to a big centre of population. Being really cheerful for a moment, if a Chernobyl-scale accident happened at Dungeness and a radioactive cloud rendered a big part of Kent and Greater London uninhabitable, would the financial cost of that be limited to £620 million? £620 billion, possibly...

London and Kent?

It's quite possible that nothing of value would be lost.

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Only £620 million per site?! That would be a drop in the ocean compared to the cost of clearing up a major nuclear disaster close to a big centre of population. Being really cheerful for a moment, if a Chernobyl-scale accident happened at Dungeness and a radioactive cloud rendered a big part of Kent and Greater London uninhabitable, would the financial cost of that be limited to £620 million? £620 billion, possibly...

<silver lining>

Well, it would be a solution to the problem of high house prices in the South East.

</silver lining>

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Only £620 million per site?! That would be a drop in the ocean compared to the cost of clearing up a major nuclear disaster close to a big centre of population. Being really cheerful for a moment, if a Chernobyl-scale accident happened at Dungeness and a radioactive cloud rendered a big part of Kent and Greater London uninhabitable, would the financial cost of that be limited to £620 million? £620 billion, possibly...

1) The UK reactors can not explode. In the worst case (quite unprobable) the core can melt through the concrete containment block ...

2) The Chernobyl disaster was caused by a one man decision (based on the political order he received from Moscow) to switch off all 6 safety circuits (one with pliers!!!). The first design change the Russians did after the accident was that the safety circuits can NOT be switched off ...

3) Nuclear electric generation kills much less people per kW than coal electric generation. Coal power plants also release radioactive particles to atmosphere. Nuclear do not ...

Edited by damian frach

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I look forward to the postings from the I-hate-windmills-cos-they're-subsidised crowd.

why are they subsidised for last 15 years if they are so great??? does not make sense ...

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Is this really a story?

Insurance companies are not willing to take the risk at a premium that makes it an economically attractive proposition for the firms. So either a) government intervention if it decides it is required for the greater good of society B) remove the requirement for insurance.

There is a lot of public vs. private anger here. One cant exist without the other so some of you ladies need to get a grip.

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1) The UK reactors can not explode. In the worst case (quite unprobable) the core can melt through the concrete containment block ...

2) The Chernobyl disaster was caused by a one man decision (based on the political order he received from Moscow) to switch off all 6 safety circuits (one with pliers!!!). The first design change the Russians did after the accident was that the safety circuits can NOT be switched off ...

3) Nuclear electric generation kills much less people per kW than coal electric generation. Coal power plants also release radioactive particles to atmosphere. Nuclear do not ...

Points taken. However, mine was not to get into a slanging match over the likelihood or otherwise of a disaster that incurs a comparable economic cost to that of Chernobyl taking place in the UK. I was simply assuming for argument's sake that the risk exists - even if, as you argue, that risk is a lot lower than in Russia - and then starting to think about the insurance implications.

I do quite a bit of freelance consultancy work advising archives and libraries how to preserve and look after their collections. A question I am frequently asked to answer is that of whether curators should insure their collections, and if so for how much. That answer usually starts by explaining that all a cheque from an insurer can do is to enable you to replace something that you lost. If you have a collection of c17 manuscripts or oral history recordings made in the 1930s, you cannot replace the originals. It's physically impossible. Copies can be made of both, and any responsible curator will do that and keep the copies in a geographically separate location. You can insure the copies, and for how much is an easy sum: you just work out the cost of making new ones from the originals. What you can't do is to replace the originals. Rather than trying, your best bet is to spend the money on atmospherically controlled storage, a Halon fire suppression system, better security, the staffing needed to operate a stricter preservation regime or whatever. Very few insurers will even attempt a hypothetical guess at the long-term monetary cost of losing original records, and the few that do will charge you such a rip-off premium that unless they have significant IP value (very rare), it's really not worth it.

My guess is that, basically, the same applies to insuring against a major nuclear accident. If it rendered London uninhabitable, you could not simply rebuild London, or recover from the disaster in the way that you could and for the cost of, say, rebuilding a tube tunnel after Muslims blow it up. Therefore, I suspect that even talking about insurance in such situations is a non sequitur, which is why the commercial insurance industry won't go there.

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2) The Chernobyl disaster was caused by a one man decision (based on the political order he received from Moscow) to switch off all 6 safety circuits (one with pliers!!!). The first design change the Russians did after the accident was that the safety circuits can NOT be switched off ...

You've made that up haven't you???? :blink::blink:

Why was he ordered to do that? Generate more electricity? Did the person giving the order get promoted?

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why are they subsidised for last 15 years if they are so great??? does not make sense ...

My post was a dig at certain pro-nuclear posters on this forum who strongly condemn the subsidies given to windmills, and then just as strongly claim that nuke power does not get any subsidies... even when confronted with clear evidence to the contrary (such as the article posted by the OP) :P

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1) The UK reactors can not explode. In the worst case (quite unprobable) the core can melt through the concrete containment block ...

Claiming that you can design a machine that will never fail catastrophically is as daft as claiming that you can design a perpetual motion machine.

You can design it so as to reduce the risk to a very low level. But never say never.

2) The Chernobyl disaster was caused by a one man decision (based on the political order he received from Moscow) to switch off all 6 safety circuits (one with pliers!!!). The first design change the Russians did after the accident was that the safety circuits can NOT be switched off ...

Erm, how do you design a safety circuit that can never be switched off? Do you use your perpetual motion machine to power it?

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Only £620 million per site?! That would be a drop in the ocean compared to the cost of clearing up a major nuclear disaster close to a big centre of population. Being really cheerful for a moment, if a Chernobyl-scale accident happened at Dungeness and a radioactive cloud rendered a big part of Kent and Greater London uninhabitable, would the financial cost of that be limited to £620 million? £620 billion, possibly...

It is the price multiplied by the chance. Say the chance of a failure is 0.1% then £600m is really covering the possibility of £600B.

The problem with all this is that some ministers are ******ing with the free market. They don’t like nuclear so ask it to jump many more hoops than it needs.

“and loss of use and enjoyment of the environmentâ€

why should nuclear pay for this let alone the definition which could be anything.

you cant go near a wind turbine in icy weather so we should tax them on loss of enjoyment of the land when there is ice.

On top of all this, these stupid laws are forcing nuclear to become bigger and bigger and bigger. If you build a 250 MW reactor you pay almost the same fees as a 2000 MW reactor.

The problem with that is it pushes up costs even more. Smaller nuclear plants could be built very cheap on assembly lines and shipped to the destination but the laws make smaller plants uneconomical.

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Is this really a story?

Insurance companies are not willing to take the risk at a premium that makes it an economically attractive proposition for the firms. So either a) government intervention if it decides it is required for the greater good of society B) remove the requirement for insurance.

There is a lot of public vs. private anger here. One cant exist without the other so some of you ladies need to get a grip.

The private sector cannot insure something like this even if they wanted to.

I believe insurance laws would want them to set aside a certain amount of capital for if and when there is a claim. If one of these went nuclear everyone and his dog will be claiming even if their problems were not caused by the nuclear fault (ie slip up and break your nee, yep it was that dam nuclear plants fault).

Anyway, assuming a figure of £500B claim the insurance companies might need to set aside say £50B. Well that is too much money for even the biggest insurers.

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You've made that up haven't you???? :blink::blink:

Why was he ordered to do that? Generate more electricity? Did the person giving the order get promoted?

No, they had to prove that the plant will work without any external electric power or generators in the case of NATO attack on Russia ....

Based on that the test had to be run in the low reactor energy mode. The designers knew about the unstability of the reactor design in the low mode. Therefore the safety systems would switch off the reactor completely. To finish the test they had to switch the safety systems off ....

I think he died in the jail ...

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Nuclear pays lots of fees and needs to purchase licences and all sorts. Overall they pay a lot more than fossil fuel plans and a hell of a lot more than windmills.

In fact lots of the laws screw nuclear. One is licence fees per reactor/plant which forces designers to build plants that are very big.

This story is just another one highlighting how nuclear is screwed over other sources.

Anyway the politicians have decided we will get some more nuclear but we are going to shift to gas heavy generation. There is no free market, just a market decided by ministers and law makers.

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The private sector cannot insure something like this even if they wanted to.

I believe insurance laws would want them to set aside a certain amount of capital for if and when there is a claim. If one of these went nuclear everyone and his dog will be claiming even if their problems were not caused by the nuclear fault (ie slip up and break your nee, yep it was that dam nuclear plants fault).

Anyway, assuming a figure of £500B claim the insurance companies might need to set aside say £50B. Well that is too much money for even the biggest insurers.

my life policy with Legal&General excludes radiactive disasters and wars ...

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Claiming that you can design a machine that will never fail catastrophically is as daft as claiming that you can design a perpetual motion machine.

You can design it so as to reduce the risk to a very low level. But never say never.

Erm, how do you design a safety circuit that can never be switched off? Do you use your perpetual motion machine to power it?

You can design faultless machines as long as they use physical properties as safety mechanisms.

One such idea is to use nuclear reactors with materials that expand with heat. So if something goes wrong and the nuclear core starts overheating. That heat expands the core, which stops it going critical. There is indeed no way that would fail unless god decides to change the laws of physics midway.

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Claiming that you can design a machine that will never fail catastrophically is as daft as claiming that you can design a perpetual motion machine.

You can design it so as to reduce the risk to a very low level. But never say never.

Erm, how do you design a safety circuit that can never be switched off? Do you use your perpetual motion machine to power it?

1) If you read my quote properly you will find that the reactor can fail (core meltdown), but the pressurised water reactor designs can not explode like Chernobyl's graphite one. It is physically impossible. You will get a Nobel prize if you prove the opposite ...

2) Have you heard about the dead-man switch in the train engine? If you do not press it every 60 seconds the engine will stop. If you remove it the engine will stop. If it does not work the engine will stop.

In the reactors they use e.g. gravitation. If there is no power or the safety is off, no electricity will hold the regulation polls, the polls will fall to the reactor and the reactor will stop. Till you pull the polls from the reactor the reactor will never start up ...

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You can design faultless machines as long as they use physical properties as safety mechanisms.

One such idea is to use nuclear reactors with materials that expand with heat. So if something goes wrong and the nuclear core starts overheating. That heat expands the core, which stops it going critical. There is indeed no way that would fail unless god decides to change the laws of physics midway.

Going critical is not the only way a nuclear reactor can fail. E.g. some dimwit opens a valve and floods the local river with radioactive waste.

There are 1000s of weak spots in any power station (nuclear or otherwise). To claim that you can protect every one of them against any potential failure mode is just plain daft.

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Going critical is not the only way a nuclear reactor can fail. E.g. some dimwit opens a valve and floods the local river with radioactive waste.

There are 1000s of weak spots in any power station (nuclear or otherwise). To claim that you can protect every one of them against any potential failure mode is just plain daft.

A total of 27,800 people were killed or seriously injured on Great Britain's roads on weekdays during 2002.

Extrapolate worldwide and you get nearly 1.5 million deaths or seriously injured per year due to cars.

How many people have ever been killed by nuclear reactors?

Nuclear is an acceptable risk.

Edited by cells

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