‘The reactor at Hinkley, as well as being the first of its kind in the
UK, will also be the last of its kind, and any future build will be a new
design. I cannot believe that independent due diligence would give this project
the green light as it stands. The decision has been strongly influenced by
political opportunism and fear of loss of face.’ So said pro-nuclear stalwart
Prof. Ian Fells, in the Times 19/9/16.
Concerns about annoying China, by spurning their offer of £6bn
in inward investment in the project, were certainly there, but so were concerns
about giving China more control over the UK energy system. However former
energy minister Lord Howell said that, rather than worrying about whether China
will be a good nuclear partner, we should worry about EDF: ‘The real risks are that EDF's financial affairs are wobbly, its
supplier's affairs are wobbly, the design has never yet worked anywhere, it's a
design that's unproven. And we are going to be really in unknown territory as
we build this thing.’ www.greenpeace.org.uk/media/press-releases/public-support-hinkley-new-low-20160913
www.bbc.co.uk/news/live/business-37320034
www.bbc.co.uk/news/live/business-37320034
There are of course protections in case of
financial problems, including contract cut off deadlines, and under the
renegotiated agreement, should it go bust, ‘the
government will be able to prevent the sale of EDF’s controlling stake prior to
the completion of construction’.
Moreover, the legal framework means the government can intervene
in the sale of EDF's stake once (if!) Hinkley is operational. There’s still the Austrian legal objection to be heard and the results
of the forging quality tests on Areva’s steel containment, but for now EDF is
obviously happy. So its next EPR project, at Sizewell, may soon be up for
consideration, along with the other UK projects- Wyfa and Olbury (Hitachi
ABWR), Moorside (Westinghouse AP1000) & Bradwell (a Chinese reactor). We
will be hearing more about that: www.bloomberg.com/news/articles/2016-09-30/china-to-submit-homegrown-nuclear-reactor-design-for-u-k-review.
Meanwhile though, the Guardian’s nuclear
evangelist George Monbiot, who opposed Hinkley as an expensive distraction,
sang the praises of ‘small modular reactors that use
nuclear waste as fuel’: the integral fast reactor variant ‘could
supply all the UK’s energy needs for 500 years by consuming the nuclear waste
stockpile.’www.theguardian.com/commentisfree/2016/sep/15/nuclear-power-no-hinkley-point-yes-atomic-energy
A bit fantastical- with many cost,
safety and security unknowns and risks. Even the pro nuclear ETI said that SMRs
wont be available, at best, until 2030: www.eti.co.uk/small-modular-reactors-could-be-operating-in-the-uk-by-2030-according-to-a-new-eti-report/ And for now, dazzled by the
promise of jobs, the TUC and GMB, along with the
government, seem delighted to build conventional large plants,
starting with Hinkley!
www.theguardian.com/commentisfree/2016/sep/16/hinkley-point-good-enws-workers-economy-not-stop
I will be coming back to the union’s position in my next post, but it
does seem very short sighted. Renewables
can also create jobs and they are much faster to deploy, in weeks or months for
PV and wind, not up to a decade, as with large nuclear projects. And, quite apart from the unique safety, security and waste management worries with nuclear, it’s expensive. Indeed,
as even the government now admits, more expensive than some renewables.
In its three
page ‘Value for Money’ assessment in relation to the Hinkley project, the
government says its £92.50/MWh strike price is ‘above
the comparable cost range of large-scale solar Photovoltaics (PV) (£65-92/MWh)
and onshore wind (£49-90/MWh)’. However, it claims that ‘in
order for large-scale solar and onshore wind to produce the same amount of
electricity provided by HPC, there would be significant upgrades to the grid
required (such as connection and planning costs) as well as increased costs to
keep the system in balance’.
Well
yes, balancing might add 10-15% to the cost, on the basis of CCC estimates by
Imperial College: www.theccc.org.uk/publication/system-integration-costs-for-alternative-low-carbon-generation-technologies-policy-implications/
Moreover, grids and balancing have
to be upgraded anyway since we plan to use more renewables, offshore wind
especially, even with Hinkley on line. The
government says that Hinkley comes out at ‘towards the bottom of the comparable cost range of offshore wind
(£81-132/MWh)’ but that may now be dated- offshore projects are going ahead for 2020 at
~ £54/MWh off Denmark. Even with grid costs added that would still beat
Hinkley, and who know what offshore wind costs will be by 2025 when Hinkley might start up- 20-30% cost falls have been predicted. http://newscenter.lbl.gov/2016/09/13/experts-anticipate-significant-continued-reductions-wind-energy-costs/
There could also be
some extra unexpected nuclear costs. The large cost of dealing with nuclear
waste and eventual plant decommissioning (put at £5.9-7.2bn) is meant to be covered
by the CfD strike price, with contingency extras added in to the legal agreement.
Insurance cost similarly. But who knows if these provisions will be sufficient-
all previous clean up cost estimates have proved wrong: www.theguardian.com/environment/2016/sep/30/hinkley-point-c-developers-face-72bn-cleanup-bill-at-end-of-nuclear-plants-
As for fossil fuel
alternatives, the government says that Hinkley
comes out at ‘towards the top of the comparable cost range of gas Combined Cycle Gas
Turbines (CCGT) (£47-96/MWh)’ but ‘towards
the bottom of the comparable cost range of first-of-a-kind commercial carbon
capture and storage (£77-249/MWh) for delivery in 2025’. It has dumped CCS
for now, but it is still keen on CCGT, presumably using shale gas, increased
emissions not withstanding.
However, perhaps a little deviously, it argues that Hinkley offers extra value
by ‘avoiding the
costs of replacing the gas fleet and avoiding the rising carbon costs of gas
generation post-2050’ and also by
unlocking the
option of ‘further new nuclear’. But
renewables could avoid all of that, arguably at lower cost. Certainly by 2050
and probably by the time Hinkley might run. Or any SMR’s: if, as it seems, the
earliest for them is 2030, by then
renewables could be clearly dominant, if not before.
That
is clearly not how the government sees it. On Hinkley, it puts the total cost
over its whole 35-year index-linked CfD at £11-21bn (2012 prices, discounted to
2012), although the NAO say there is likely to be a £30bn top up: www.nao.org.uk/report/nuclear-power-in-the-uk. But sticking with the
governments lower figures, the NAO says: ‘Our
most realistic projections mean that around £12 from energy bills will go
towards supporting the plant in 2030’. Whereas, if Hinkley ‘is delayed by
three years and offshore wind and Carbon Capture and Storage (CCS) are needed
to fill the gap, it would lead to a £24 annual increase on household
electricity bills on average from 2026 to 2030 (2012 prices). Similarly, if
onshore wind and large- scale solar PV were to fill the gap, consumer bills
would increase annually by £21. Gas plant coming on to fill the gap would see
bills £6 cheaper per year, but this would undermine the UK’s ability to meet
legally binding decarbonisation targets’. http://www.sciencedirect.com/science/article/pii/S0960148115303001
Greenpeace said ‘The
numbers speak for themselves. In the unlikely event Hinkley is working sometime
in the second half of the next decade, renewable energy will be much cheaper,
yet British consumers will still be forced to pay over the odds for nuclear
power’. It’s hard not to agree. Though that doesn’t explain why the
government is still pushing for it- something I will look at in my next post in
this series.
The government’s Value for
Money analysis is at: www.gov.uk/government/uploads/system/uploads/attachment_data/file/556917/3_-_Value_for_Money_Assessment.pdf
