Hinkley/Energy Policy

Matt Ridley: Almost nobody wants Hinkley to go ahead. The public have paid the price for years of missteps: it’s time to scrap Hinkley Point C and support the shale revolution. Shortly before parliament broke up this month, there was a debate on a Lords select committee report on electricity policy that was remarkable for its hard-hitting conclusions. The speakers, and signatories of the report, included a former Labour chancellor, Tory energy secretary, Tory Scottish secretary, cabinet secretary, ambassador to the European Union and Treasury permanent secretary, as well as a bishop, an economics professor, a Labour media tycoon and a Lib Dem who was shortlisted for governor of the Bank of England. Genuine heavyweights, in short. They were in general agreement: energy policy is a mess, decarbonisation has been pursued at the expense of affordability and, in particular, the nuclear plant at Hinkley Point C in Somerset is an expensive disaster. Their report came out before the devastating National Audit Office report on Hinkley, which said the government had “locked consumers into a risky and expensive project [and] did not consider sufficiently the risks and costs to the consumer”. Hinkley is but the worst example of a nationalised energy policy of picking losers. The diesel fiasco is another. The wind industry, with its hefty subsidies paid from the poor to the rich to produce unreliable power, is a third. The biomass mess (high carbon, high cost and environmental damage) is a fourth. Almost nobody wants Hinkley to go ahead, apart from the contractors who get to build it. EDF and Areva, the French owner and developer, are in trouble over the only two comparable reactors in Europe. The one at Flamanville is still to start working, many years behind schedule. The French unions want Hinkley cancelled. Lord Howell of Guildford, the former energy secretary, wisely pointed out in the Lords that the key player is China, a partner in the project. Rather than cost, the government’s excuse for revisiting Hinkley last year was partly worries about security. This was a silly worry and bad diplomacy. However, it is not clear China wants to go ahead, and subtle negotiation could tease this out. The great prize for China was regulatory approval through Britain’s gold-standard “generic design assessment” process, which could unlock foreign markets and give a green light for a Chinese-built reactor at Bradwell in Essex. But Lord Howell says the Chinese increasingly realise that the Hinkley design is a dead end, as costs escalate and delays grow. And they know that the future for nuclear power must lie in smaller, modular units, mass-manufactured like cars rather than assembled from scratch like Egyptian pyramids. Their “Nimble Dragon” design could slot into both the Hinkley and Bradwell sites, perhaps beside the larger Hualong design. Cancellation would cost some £20 billion. But if the initiative comes from Beijing it is just possible that some new arrangement could be salvaged from the certain wreckage of the EDF scheme, without seriously damaging both livelihoods and our relations with China.

Times 31st July 2017 read more »

Share

Published: 31 July 2017