The endgame for the UK’s new reactor project at Hinkley Point is nearing. A Chinese state visit to the UK in October may be the make-or-break point for the project to get the go-ahead. As that moment approaches, we give five reasons not to build the plant. This is an excerpt from our EU Power Weekly, which is available to our BNEF EMEA and BNEF All clients. Last week, French energy giant EDF announced delays to two key new reactor projects. Firstly, Flamanville 3 in France will only come online in 2018, six years behind the initial plan and three times over budget. Also, Hinkley Point C in the UK will not be completed by 2023 due to delays in reaching a final investment decision. This adds to the uncertainty around the 3.2GW reactor project. Here are five reasons not to build Hinkley: It is extremely difficult to build; It is very expensive; It may not be necessary; Hinkley won’t play nice with wind and solar; It is a cost for future generations.
Bloomberg 13th Sept 2015 read more »
Letter Chief Executive Renewable Generation: The FT’s leader (“UK should think again about Hinkley Point”, September 10) makes a strong case for scrapping a project which has already been dubbed a “white elephant”. The delays and high cost of energy production at Hinkley Point C also raise wider questions about the government’s energy priorities and its determination to prevent onshore wind being part of the energy mix going forward. Onshore wind is the cheapest form of renewable energy and considerably cheaper than new nuclear. The government’s own figures show that the agreed price for every unit of onshore wind energy at around £80/MWh in the 2015 contract for difference auctions is substantially less than the CFD price agreed for the cost of every identical unit of energy coming from Hinkley Point C at £92/MWh. What’s more, the CFD period for new nuclear support is for 35 years compared with only 15 for onshore wind, making new nuclear substantially more expensive over the longer term. When it comes to energy policy, political expediency is taking precedence over energy solutions that will actually keep costs down for consumers and meet our environmental targets. While the government is being led on a merry dance by the negotiations between the EDF Energy and its Chinese investors over if, when and at what cost it will deliver Hinkley Point C, a homegrown energy supply, largely developed by British companies, is being cut out of the UK’s future energy policy, thanks to the government’s decision to close the renewable obligation early and halt the CFD auction process for renewables. Surely the growing uncertainty over the future of Hinkley Point C, and the unnecessarily high cost of the energy it will produce, underlines the need to have an energy policy that can provide energy security through a broader range of reliable production methods? That must include support for the cheapest large-scale low-carbon power source: onshore wind.
FT 13th Sept 2015 read more »
Can Andrea Leadsom use her authority to force a better bargain for energy consumers by negotiating a new and improved deal with the owners of the long-planned and much-postponed Hinkley Point nuclear power station. Above all, what is needed is complete transparency. At the moment the question of whether and when Hinkley will be built is clouded in smoke blown from one direction or another. Some of the green lobby would like to stop all nuclear development, and want to see the delay as a sign that the project is being abandoned. Others believe that there is a dangerous degree of reluctance on the part of EDF, the French owners of the Hinkley site, to expose their own balance sheet and see some signs that they have lost confidence in the European pressurised reactor (EPR) as a viable technology. The immediate focal point is the visit of President Xi Jingping of China at the beginning of October. Some in the government want the Chinese to fund up to 40 per cent of the costs and hope for a grand signing ceremony. Others think the Chinese would be mad to sign a deal until the EPR has actually been shown to work, and a select but influential few are wary that, as part of the deal, the Chinese will be given access to strategic national infrastructure with a promise that they can own and operate their own new nuclear station at Bradwell in Essex. In the absence of an effective opposition party it is important for the government not to become trapped by sticking to past commitments, however well intentioned, even when the facts have changed. Hinkley Point is close to being another version of Kid’s Company – the charity designed to help disadvantaged children that was given more and more money against civil service advice that the organisation could not cope. The ministers who approved the funding could not bear to accept that a mistake had been made. The renegotiations should themselves be transparent. If the French government (and I don’t doubt the Chinese) know what is going on, why shouldn’t consumers in Britain? On the UK side, the negotiating team should include professionals who understand the complexities and can protect the consumer without feeling career pressure from within the government to do a deal at any price. The terms have to include clear and unchanging specifications for the project, heavy penalties for delays and cost overruns and a sharing of all the benefits of success.
FT 14th Sept 2015 read more »
Letter East of England Energy Group: The country needs nuclear and it needs it now (FT View, September 10). Hinkley Point C will help deliver secure low-carbon energy at an affordable price for consumers. It is new nuclear which delivers the energy the UK needs to secure its future and to keep the lights on.
FT 13th Sept 2015 read more »
Tom Burke: John Hutton is Chairman of the Nuclear Industries Association. On September 24th he told the Radio 4 Today audience that “The nuclear programme is going to be built without any state funding at all”. Sitting next to him in the studio I nearly fell off my chair. I am used to politicians being casual with the truth. Even so, this surprised me. Was Lord Hutton really telling an outrageous lie, had he made a slip of the tongue or was it possible that he really believed what he was saying? He is an experienced man. As well as serving in Labour Cabinets, he was the MP for Sellafield and served on the board of an American nuclear company. He is clearly familiar with the economics of nuclear power. A slip of the tongue is unlikely. Furthermore, his Association’s Chief Executive, Keith Parker took a similar view in a letter to the Independent the same week. He wrote “It [Hinkley Point] will be built without taxpayer funding”. It is clearly good for the Chairman and Chief Executive of any organisation to agree with each other. It is, however, not so good for both of them to repeat the same falsehood. It is possible that they were both doing so deliberately. But the risk to their industry of its leading figures being caught telling a lie in public is significant. It is more likely that they really do believe what they are saying. So how did they manage to delude themselves. The answer lies in their use of two words: ’state’ and ‘taxpayer’. What exactly constitutes ‘state’ funding? If it means taking £16 billion out of the budget and buying Hinkley from EDF then Hutton’s statement is correct. This is not what the Government is proposing. If however it means the state is giving EDF a guaranteed price for all of its electricity for 35 years, a guarantee on the loans to finance the construction of Hinkley as well as capping both its insurance and waste management liabilities then it is wrong. This is exactly what the Government is proposing.
Tom Burke 13th Sept 2015 read more »
Electricity from proposed new nuclear stations in the UK will be more expensive than from any other nuclear reactors in the world, yet the government is pressing ahead with its plan to build 11 new installations, despite mounting criticism. This contrasts sharply with Germany’s policy of phasing out nuclear power altogether − and experts in nuclear policy now see a possible explanation in the fact that Britain is a nuclear weapons state, while Germany has no wish to be one. The UK’s approach also differs from that of France, which is investing heavily in renewables to cut its reliance on the atom. All three countries say their policies are based on the need to reduce greenhouse gases. Renewables have already created more jobs and wealth in Germany than nuclear power, while Britain is cutting back drastically on support for solar power and on-shore wind in favour of nuclear stations designed and built by companies from France, China, Japan and the US. Academics have been examining Britain’s secretive decision-making processes to try to discover why two economies as similar as Germany’s and the UK’s − both countries wanting to reduce fossil fuel use in order to cut greenhouse gas emissions − should take such divergent decisions. Britain has much better renewable resources, yet has decided to opt for nuclear power, even though it is more expensive than on-shore wind or solar. Phil Johnstone and Andy Stirling, University of Sussex research experts in the nuclear policy area, have put forward the suggestion that the UK needs to continue to build and run civilian nuclear power stations to maintain enough nuclear expertise in the country to run its nuclear submarines independently, and so keep its status as a nuclear weapons state.
Climate News Network 13th Sept 2015 read more »
EEF, one of Britain’s leading employers’ groups, has urged the government to scrap the carbon price floor and other green taxes, following on from a series of ministerial moves to slash subsidies on wind and solar schemes. The demand for more cuts comes as a high profile green crowdfunding scheme, the Trillion Fund, said it would no longer be loaning money to renewable energy projects because the government had “rocked investor confidence”. EEF said ministers should move away from green taxes that penalise businesses, such as the carbon price floor and the carbon reduction commitment, and instead use tax incentives to reduce CO2. The calls are made in a report titled The Low Carbon Economy – From Stick to Carrot, which forms part of the manufacturing organisation’s response to a review of carbon taxes unveiled by George Osborne in the budget statement.
Guardian 14th Sept 2015 read more »
Telegraph 14th Sept 2015 read more »
On our behalf, Cumbria Trust director Rod Donington-Smith has submitted a response to DECC’s Call For Evidence. Other responses submitted to DECC and copied to us so far, are from former Cumbria County Council leader Eddie Martin and Gosforth and Ponsonby Parish Council.
Cumbria Trust 14th Sept 2015 read more »
Preliminary exploration surveys for raw uranium in Iran are progressing well but it is too early to announce any discoveries, the spokesman for the Atomic Energy Agency of Iran (AEOI) was quoted as saying on Sunday.
Reuters 13th Sept 2015 read more »
South Africans who are worried about the controversial and expensive nuclear deal being shoved down their throats have received support from an unexpected quarter. Fikile Majola, ANC MP and chairperson of Parliament’s portfolio committee on energy, has turned out to be a champion for transparency in the nuclear deal.In a frank interview with City Press, Majola said it would be foolhardy of Parliament to rubber-stamp government’s controversial nuclear deal if it turns out to be unaffordable or to South Africa’s detriment.
News24 13th Sept 2015 read more »
Labour backbencher Diane Abbott has warned that Labour MPs who have a “passionate commitment” to nuclear weapons will be out of step with the party under Jeremy Corbyn, but dismissed suggestions the party’s new leader would take Britain out of the EU or Nato.
ITV 13th Sept 2015 read more »
Renewables – offshore wind
A £5 billion project to build a wind farm off the Yorkshire coast could be abandoned because the government has failed to make a commitment of support after 2020, the world’s biggest offshore wind developer has warned. Brent Cheshire, the UK managing director of Dong Energy, said that plans to construct Hornsea 2 and 3 almost 200 kilometres off the Humber estuary were in serious doubt. “The question is what money is available after 2020,” he said. “We don’t know where the government’s thinking is at the moment. We need that visibility or otherwise this will falter very badly.”
Times 14th Sept 2015 read more »
The slowdown in global warming is likely to end within two years as the Earth’s climate system undergoes a radical shift that could push temperatures to record highs this year and next, according to the Met Office. The findings will demolish claims by climate sceptics that the slowdown in the rate of global warming over the past 17 years proves that scientists’ concerns are exaggerated.
Independent 14th Sept 2015 read more »