Skip to main content

The high price to pay for UK's nuclear renaissance

WITH 60% of the UK’s 100GW of electricity capacity due to come off line in the next decade the Government is anxiously pressing for new capacity to fill the gap.

The Energy Bill sets in place subsidies to support renewables technologies, such as offshore and onshore wind, to help with the transition from fossil fuels to a low carbon network.

But at this point in the game there is no hope of renewable technologies filling the looming energy gap – with significant breakthroughs in energy storage still some way off.

Hence the Government’s delight at securing the deal with EDF for a new nuclear power station at Hinkley Point, Somerset, which will generate 7% of the UK’s capacity when fully operational by 2020.

Nuclear power is a low carbon energy source and unlike intermittent renewables, such as solar and wind, is a reliable base-load option.

It therefore ticks two of the three boxes of what many in the industry like to call the ‘energy trilemma’ - it supports the UK’s energy security and is low carbon.

Whether it ticks the third box of affordability is open to conjecture.

The strike price deal of £92.50 per MW/h (megawatt hour) for 35 years is far below that of offshore wind at £155 per MW/h and if EDF embarks on a second reactor in Suffolk this price will fall to below £90 per MW/h.

But with wholesale market electricity prices between £40 and £50 per MW/h it will cost the hard-pressed bill payer in the long-run.

The Government flimsily argues that by 2030 the deal will save bill payers money, but this is based on assumptions that energy bills will continue to rise as we move from fossil fuels to low carbon power sources.

In fact by arguing the deal will save bill payers in the long term the energy department is effectively saying it expects energy bills to move north towards the £90 per MW/h EDF strike price by 2030 – which is a sobering thought for all.

While EDF has said it will put money to one side to pay for decommissioning and waste disposal, cost overruns are a feature of the nuclear industry.

Earlier this year Hinkley was estimated to cost £14 billion, but this week’s announcement has seen that already rise to £16 billion.

EDF and its construction partner fellow French Government owned company Areva are currently involved in two new nuclear builds in France and Finland, which are both behind schedule and costing more than anticipated.

At Flamanville in France the cost of a single European Pressurised Reactor (EPR) has tripled after four years delay to 8.5 billion euros.

The Finnish project using the same EPR is seven years late.

The UK Government has pledged to provide a loan guarantee for £10 billion of the Hinkley construction costs, exposing the taxpayer to potential liabilities should the project stall or fail.

With other consortia looking to build new nuclear plants in the UK the Government will hope this week’s announcement will re-start an industry which has lay dormant in the UK for a generation.


It is hoping resulting economies of scale may force prices down - but at a time of rising energy prices it is unlikely a UK nuclear renaissance will come cheaply for hard-pressed domestic and commercial bill-payers.

Ends

Comments

Post a Comment

Popular posts from this blog

Blaming CO2 Is The Analog Response To Climate Change

  OVER 125 years ago Swedish scientist Svante Arrhenius fingered carbon dioxide role for its role in warming the planet. At the time it was seen as a good thing - after all it’s the cold that kills - but over the ensuing decades there’ve been a few revisions to how this additional CO2 is perceived. It is now the sinister suspect behind 200 years of global warming and is demonised in a way the witches were in the 16th and 17th centuries. Just as the witches were castigated for spoiling crops, and inducing bad weather, CO2’s fingerprint is now apparently detectable on almost any climatic event.   Such is the man-made warming mania that for the last five years the green stenographers in the BBC and mainstream media have neglected their duty of impartiality to the British people by claiming climate science is settled (1). But, surely it is not unreasonable to question how, and why, this trace gas, at a mere 0.04%, or 400 parts per million (ppm) of the atmosphere - and es...
Post a Comment
Read more

Energy Security On The Brink - As Green Lobby Takes Cover

NEW Climate Change Committee boss Emma Pinchbeck wants policy costs taken out of UK energy bills in a cynical bid to hide from the public the soaring costs of supporting renewables. This is just the latest legerdemain from the climate ‘crisis’ crowd who mindlessly orate that energy will become greener and cheaper under their watch. Nothing could be further from the truth. Our energy bills are now the highest in Europe (1) and our energy security more fragile than at any time since the beginning of the fossil fuel era. This is purely a result of their slavish adherence to the Net Zero lunacy. Last week the media widely reported how the UK was paying gas-fired power plants some £2m an hour to fire-up and support the peak evening UK demand period (2). This followed Pinchbeck trumpeting on Radio 4 how wind had the largest share of UK electricity generation ever recorded in 2024, even more than gas. The preference given to the so-called renewables in the hierarchy of energy supply is the so...
Post a Comment
Read more

Labour’s Growing Pains Causing Rifts In The Eco-Activist Class

FOR decades the hectoring Malthusian quangos, eco-activists, politicians, charities, and left-wing managerial class have placed protecting the environment ahead of development. But, we are now witnessing these eco-activists turning in on themselves, as the Labour Government presses ahead with plans to industrialise the countryside. And, with billions of pounds of unreliable energy infrastructure set to doorstep many unspoilt views, it’s going to be enjoyable watching them squirm as their green virtue-signalling collides with reality. The UK’s largest solar development, which will come on-line next year, is a case in point. Currently under construction the 860-acre Cleve Hill development engulfs the Graveney salt marshes, near Faversham in Kent. Green Thumb, Eco-Finger Its 560,000 solar panels, some on steel plinths the height of a double decker bus, are surrounded by a nature reserve and home to many, native wetland bird species.   Whilst this is the type of ‘green’ energy developm...
Post a Comment
Read more