Dave Elliott: An article by Rachel Morison relayed by Bloomberg notes that, due mainly to gas price rises, ‘wholesale electricity prices have pushed above 100 pounds ($139) per megawatt-hour for the first time since 2008. That’s higher than the guaranteed rate the government agreed Electricite de France SA would get for the power produced from the Hinkley Point C nuclear plant being built in southwest England’. So Hinkley is no longer an expensive energy option! But the £92.5/MWh Contract for a Difference (CfD) strike price that Hinkley was given in 2013 is inflation index linked, so it would now be around £112/MWh, well above the £105/MWh the Bloomberg article quotes. Sizewell C will probably be funded not by a CfD but under a RAB consumer tax approach (see below), not least since off-shore wind projects are doing so much better under the CfD system. So despite the fancy number crunching in the Bloomberg article, nuclear still looks to be in trouble. A report from Scottish and Southern Electricity noted that, the huge expansion of increasingly low cost wind power was likely to push wholesale electricity prices so low on windy days that most wind farms would be unable to cover their operating costs from selling power. Odd things competitive markets- with this so-called ‘market cannibalization’ being a perverse result of economic success. The nuclear industry is not exactly faced with that problem- its faced with high costs and an uncertain financial future.
Renew Extra 11th Sept 2021 read more »