Hinkley – Extremely bad value for consumers

Evidence has poured into the European Commission as it investigates whether the deal with EDF on Hinkley Point C breaks EU competition rules. Many objectors,   who made submissions by 7th April, claim that the contract will wreck Europe’s chance of building up renewable energies to avert the worst impacts of climate change.

In a damning and succinct demolition of the UK Government’s case in favour of state-aid for Hinkley C, Friends of the Earth (FOE) show how the Department of Energy and Climate Change’s (DECC’s) central projections assumes a tailing off in the growth of renewables after 2020. Such projections are out of step with reality around the world as installation of wind power and solar power accelerates and nuclear electricity production actually falls. The UK Government clearly favours nuclear over renewables as it commits the consumer to paying massive bills for Hinkley C (from 2023) but has no plans for any premium prices for renewables after 2020. It seems the Government doesn’t expect renewable costs to fall, but does expect that nuclear costs will!

FOE dismisses the notion that offering the Hinkley C developers £92.50/MWh over 35 years with a £10 billion loan guarantee, could be justified on environmental grounds. They say the deal ‘represents extremely bad value for UK citizens‘ because the cost of various renewable energy technologies will be far cheaper with costs falling fast by the time that Hinkley C is deployed.

FoE says while it supports interventions in the electricity market to drive decarbonisation, nuclear power has problems with nuclear waste for which there is no robust plan for safe management over the timescales required, along with other risks and impacts, which are unnecessary because there are multiple other pathways to decarbonisation, at similar or lower cost.

FoE argues that the amount of new-build renewables plus nuclear will be limited by the Treasury’s Levy Control Framework (LCF). If Hinkley is built, then from 2023 (or later) it will be competing directly with renewable generation for a limited pot of subsidy. DECC’s own analysis shows there are multiple routes to decarbonisation, so we could meet the same objectives with more renewables and less nuclear, but DECC’s central projection for electricity generation to 2030 assumes a tailing off in growth in renewables after 2020, and a rapid growth in nuclear post 2025. Yet it would be more realistic to assume continued growth in UK renewables capacity on a similar or faster growth trajectory, given the falling costs of the main renewable technologies.

For more on this see nuClear News No.61 and the joint submission by Nuclear Free Local Authorities, Cities for a Nuclear Free Europe and Stop Hinkley to the European Commission. 


Published: 23 April 2014