Posts Tagged Hinkley

Hinkley Point to go ahead

Posted by Suzanna Hinson on September 15th, 2016

The controversial Hinkley point C in Somerset has finally been given the go-ahead by the government. The Department for Business, Energy and Industrial Strategy said,[1]

“the Government has decided to proceed with the first new nuclear power station for a generation. However, ministers will impose a new legal framework for future foreign investment in Britain’s critical infrastructure, which will include nuclear energy and apply after Hinkley.”

The decision in July by Prime Minister Teresa May to stall and review the £18 billion project, planned to produce 7% of UK electricity, shocked the industry. The ensuing debate was weighty and is unlikely to subside as the “white elephant” project goes through its expected 10-year construction.

The questions and concerns over the project are wide ranging. The strike price is high, and many are worried about being committed to expensive energy for many years, whilst other options get increasingly cheaper. There are also concerns over the foreign investment, particularly that of the Chinese. New Nuclear Watch Europe dismissed this security issue in their recent guest blog for Weinberg Next Nuclear.[2] The government’s “new legal framework” supposedly addresses some of the financial and security concerns though the opposition has called it “window dressing”.[3] Perhaps the main concern is the technology. The European Pressurised Reactor, planned for Hinkley, has encountered extensive problems where it has been built in France and Finland and to a lesser extent in China. It has not yet been delivered on time or on budget anywhere.

In response to the news, Weinberg Next Nuclear’s director Stephen Tindale said,

“The EPR is not the most promising reactor design – very complex and so very expensive. But now that the Government has decided to go with the EDF proposal, I hope Hinkley Point C is built as quickly as possible, without major problems and without going significantly over budget. And Secretary of State for Business, Energy and Industrial strategy Greg Clark can now turn his attention to other nuclear projects: those at Wylfa and Moorside, the Small Modular Reactor competition and some advanced nuclear reactors to use spent fuel and plutonium as fuel.” 

Weinberg Next Nuclear previously reported and wrote to Greg Clarke, that there are more promising nuclear technology options than Hinkley. However we also strongly believe that new nuclear is necessary to mitigate the energy and climate crises. As such, we now hope Hinkley’s progress goes as smoothly as possible to provide much needed low carbon electricity, whilst advanced nuclear options continue to be pursued to ensure the UK has a bright nuclear future.

 

[1] https://www.gov.uk/government/news/government-confirms-hinkley-point-c-project-following-new-agreement-in-principle-with-edf

[2] http://www.the-weinberg-foundation.org/2016/09/07/theresa-may-has-nothing-to-fear-from-foreign-investment-in-nuclear-a-guest-blog-by-tim-yeo/

[3] https://www.theguardian.com/uk-news/2016/sep/15/hinkley-point-c-nuclear-power-station-gets-go-ahead

Theresa May has nothing to fear from foreign investment in nuclear. Here’s why…

New Nuclear Watch Europe (NNWE) was established under my chairmanship at the end of 2014. Its purpose is the promotion of new nuclear capacity across Europe and further afield.

As such, although an industry funded body, NNWE is not a trade body but more a campaigning organisation. Our philosophy and core principles are described in more detail on our website: www.newnuclearwatch.eu.

Our starting point is that tackling the challenge of climate change requires almost total decarbonisation of the electricity industry by the middle of this century. That goal can only be achieved with a substantial contribution from the nuclear industry. Nuclear power is therefore an important element in the energy mix in many countries.

However, in addition to being a reliable, low carbon and very safe source of electricity, nuclear must also show governments, taxpayers and consumers that it offers good value for money. This is necessary because of current unusually low gas prices and falling costs in renewable technologies such as solar and wind power.

In Britain, controversy has surrounded the high strike price which the Government has agreed for Hinkley Point C (HPC). What appeared a reasonable deal during negotiations four years ago, when the cost of alternative sources of electricity was much higher, looks less competitive now.

In addition, EDF’s continuing technical problems with the EPR have created doubts about when, or even whether, HPC will actually come on stream. Against this background, NNWE has argued strongly for consideration to be given to alternative cheaper nuclear technologies.

However, any fresh setback at HPC will be seized on by opponents of nuclear as evidence of the industry’s inability to deliver new capacity. We have therefore supported the project, even though the value of the baseload power it can provide will be less if further technical delays occur. We have suggested that a reduction in the price should be sought if HPC is not in production by 2025.

Nuclear will certainly have been high on the agenda for the bilateral meeting between President Xi Jinping and Prime Minister Theresa May last weekend in the margins of the G20 summit in the lovely old eastern Chinese city of Hangzhou.

Various explanations of the last minute intervention by the Prime Minister to review the HPC agreement have been advanced in the last few weeks. One of the most common – though least rational – advanced by some people who ought to know better is that foreign ownership of a nuclear power station exposes British consumers to the risk of blackouts.

There are two serious flaws in this theory. The first is the inability of its proponents to explain the circumstances in which it would be in the interests of China, or any other foreign owner, to shut down a nuclear plant on whose construction they had just spent billions.

Nuclear power is more capital intensive than almost any other form of energy. All of the huge investment required has to be made upfront during the construction period. This means that almost a decade passes before any return at all is earned on these massive capital outlays, and a second decade will go by before the project produces a net surplus.

A malignly motivated plant shutdown would therefore be financially catastrophic for any foreign investor. Equally important in this case, it would destroy any possibility of future Chinese investment in infrastructure assets in western countries, effectively closing the door on profitable opportunities in many of the world’s most attractive markets.

Furthermore, no commercial objection could be raised to including in the contract a provision that if the generation of electricity from a nuclear plant is halted by the owners for political rather than operational reasons, the reactor could be taken over by the British government without compensation being paid.

The second flaw in the theory is the ineffectiveness of action to stop electricity production. Although the loss of as much as seven percent of the nation’s supply would be uncomfortable and strain capacity for a while, it would not paralyse the economy as effectively as interference in some other foreign controlled infrastructure would.

For a start, other generators would increase their output. Additionally, by the late 2020s, the earliest possible completion date for Bradwell, the nuclear plant which China hopes to control, the capacity of interconnectors to import electricity from continental Europe will be much greater. National Grid could also ensure that the burden of any shortages was shared by consumers nationwide.

Contrast this with the devastation which would result from a closure of, for example, UK Power Networks. This company delivers electricity to the premises of millions of users in southeast England including the whole of London.

Few people have heard of this crucial infrastructure company. It rarely receives attention from the popular media because it does not send bills directly to domestic consumers. Its ownership by a company based in Hong Kong has been accepted for years, without a murmur of protest from the people now clamouring to block Chinese investment in Hinkley.

Yet at the flick of a switch UKPN could impose a total blackout on London. This would inflict far more devastating consequences than the loss of a single nuclear plant could ever achieve. The economic damage alone would be incalculable and there wouldn’t even be a minority British shareholder to protest.

This is not intended to raise any alarms. In my view it is inconceivable that UKPN would ever act in such a harmful and irrational way because it has much more to lose than to gain. But the same arguments apply to other foreign investors too.

So when the Prime Minister discusses these issues with her counterparts, let her concentrate on real concerns such as cyber security, completion date guarantees and proportions of localised supply chain work. These are legitimate subjects for negotiation. Fanciful notions of malign plant shutdowns are not.

The importance of settling the Hinkley question swiftly goes much wider than nuclear, wider even than the whole energy sector. Until the present uncertainty is resolved, every infrastructure investment in Britain is affected because all investors hate uncertainty.

The inevitable consequence is that prospective investors will seek higher returns from any investment they make in Britain. The cost of those higher returns will fall entirely on British consumers.

For that reason, let’s hope that the Prime Minister enjoys a cup of China’s finest tea beside the scenic West Lake with her host President, and returns home determined to get the best deal for the British people. One way to do that is to maintain, on this issue at least, her predecessor’s welcome for responsible foreign investment into Britain and its energy industry.

Tim Yeo was Conservative MP for South Suffolk from 1983 to 2015. He now chairs New Nuclear Watch Europe and the University of Sheffield Industrial Advisory Board for the Energy 2050 initiative. As an MP he served as Shadow Secretary of State for Trade and Industry (2002-03, Chair of the House of Commons Environmental Audit Select Committee (2005-2010) and Chair of the Energy and Climate Change Select Committee from 2010-2015.

Guest blogs represent the views of the author(s), and not necessarily the views of Weinberg Next Nuclear.

New Nuclear Watch Europe (NNWE)
www.newnuclearwatch.eu | @newnuclearwatch | contact@newnuclearwatch.eu

Don’t worry: British nuclear doesn’t have all its eggs in one basket

Posted by Suzanna Hinson on August 11th, 2016

Hinkley Point may be taking all the attention at present, but it is not the be all and end all of nuclear power in the UK. There is plenty more in the pipeline so, whatever happens in Somerset, progress can be made elsewhere. The UK’s Office for Nuclear Regulation aims to complete Generic Design Assessments for new reactors, the AP1000 and Advanced Boiling Water Reactor (ABWR), during 2017.

NuGen, jointly owned by Japan’s Toshiba and France’s Engie, is progressing with plans to build an AP1000 at Moorside in West Cumbria. At present, they are carrying out site assessment surveys, including geophysical surveys, geological age dating and some borehole drilling work, which must be completed before construction can begin. AP1000 reactors, designed by Westinghouse, are being planned in multiple countries worldwide, with the first plants scheduled to come online in China this year. There have been some delays on these world-first reactors, but not as serious as those in France and Finland for the European Pressurised Reactor (EPR) proposed for Hinkley.

Horizon, owned by Hitachi, are also continuing with their plans for an ABWR at Wylfa on Anglesey. Site development work is progressing, with plans to begin construction in 2018/9 and start generation in the mid 2020s. A total of four ABWRs have been constructed, all in Japan, and all completed on time and on budget. Following Fukushima, all nuclear plants were shut down and no ABWRs have yet re-opened, but three are being reviewed for re-opening and having nearby seismic faults assessed. Japan also had two ABWRs under construction before Fukushima. Work was suspended but has since re-started on both sites.

These two projects are independent of Hinkley and should continue regardless of its fate. According to the Telegraph, a source close to the Horizon venture said “we know the government wants and needs nuclear to happen. All the questions over Hinkley, we’ve got answers to.” Neither of these reactors are currently reliant on Chinese finance. The Chinese investment is one speculated reason for the delay at Hinkley, with human rights and security both voiced as concerns. Additionally, neither of these projects are using a controversial EPR design, which has experienced delays and over-spends elsewhere.

In addition to these planned sites, there is also ongoing research and development into the next generation of advanced nuclear reactors. The Government promised, in Autumn 2015, an investment of £250 million over 5 years to develop the reactors of the future. This includes a competition to decide which small modular reactor or reactors should be demonstrated in the UK. Advanced reactors have the potential to be cheaper, even cleaner and even safer than current designs, and have added benefits such as the potential ability to use up spent fuel and the plutonium stockpile. (Weinberg Next Nuclear will soon be publishing a report on how to manage plutonium).

It is very important that the Government continues the advanced reactor programme and keeps nuclear as a priority in the UK’s clean energy mix. This will ensure the UK can benefit from safe, secure and sustainable nuclear energy for many years to come, regardless of decisions on Hinkley.

Hinkley point and the nuclear debate

Posted by Suzanna Hinson on January 28th, 2016

On Wednesday, the news arrived that a decision on constructing a European Pressurised reactor at Hinkley point has been delayed, again. The board of EDF was supposed to meet to make a final decision, but the meeting was delayed due to further concerns over funding.

The delay was debated on Newsnight by the former Secretary of State for Energy and Climate Change Sir Ed Davey and Green peer Jenny Jones. Baroness Jones argued that Hinkley would be the most expensive power plant on earth and nuclear is not a solution but a problem. Ed Davey countered that nuclear is cheaper than lots of renewables and very good value if compared with the cost of the pollution from gas and coal.

With the news of today, it is understandable for nuclear’s credentials to be called into debate. However, it is important to note that Hinkley is not the whole of the UK’s nuclear programme. There are two other large nuclear reactor proposals undergoing regulatory assessment: an Advanced Boiling Water Reactor (ABWR) at Wylfa and an AP1000 at Moorside. In addition, there are many academic research programmes ongoing across the country, with new developments soon to follow the Chancellor George Osborne’s announcement in November of £250 million R&D funding for small modular reactors and advanced nuclear. Thus even if Hinkley continues to be delayed, nuclear can still make progress.

It is also important to remember why nuclear should be pursued. Weinberg Next Nuclear’s recent report argued the necessity for nuclear as part of a portfolio of low-carbon energy technologies. The presenter on Newsnight, Evan Davis, picked holes in Jenny Jones’s anti-nuclear plan, asking about providing all current electricity without nuclear as well as heat and automobiles and criticising her ideas to run the UK on food waste and to continue the use of gas (a fossil fuel). As Ed Davey said, “if you are concerned about climate change, you should not take a low carbon energy off the table”.

The policy editor of Newsnight Chris Cook, had said in a film before the discussion that there are three key objectives of UK energy policy. The first is to make sure there is enough electricity to meet demand, even if demand increases as it is expected to do in the coming decades. The second is to decarbonise the energy sector and the third is to achieve the first two objectives without unnecessarily increasing bills. To do this, we need a diverse supply of low-carbon energy, an “all of the above” approach or as Ed Davey said, “all low carbon options on the table”.

Weinberg Next Nuclear do not believe that nuclear should be pursued at any cost. An EPR at Hinkley may or may not be a good investment but if the expected price continues to rise, it is probably not a good investment. But that is not a reason to oppose all types of nuclear reactors. The ABWR and AP1000 are more straightforward reactor designs, so would be cheaper to construct and Generation IV reactors and Small Modular Reactors will very probably be cheaper still. Thus there are many other options to pursue, and they need to be pursued in order to contribute to a sustainable, low carbon future.

New nuclear is needed but Hinkley is not

Posted by Suzanna Hinson on September 21st, 2015

A seemingly positive message of hope for nuclear came from the East today, as Chancellor George Osborne announced from his tour of China that this “golden business relationship” had yielded £2billion pounds of UK tax-payer-guaranteed investment for the elusive Hinkley C power plant. Osborne said “Britain was the home to the very first civil nuclear power stations in the world and I am determined that we now lead the way again”.

But back in the West, and perhaps in reality, many have been questioning whether Hinkley C would actually be a positive development for Britain. Three prominent environmentalists, George Monbiot, Mark Lynas and Chris Goodall, have written “yes, we are pro-nuclear, but not at any price”. Hinkley, they argue, is too high a price to pay. They point to the £24.5bn construction costs, the price guarantee of £92.50 per megawatt hour for the next 35 years, and the time and cost overruns experienced at the two other European Pressurised Reactors (EPRs) in France and Finland. Hinkley, they say, should be scrapped.

Our Director Stephen Tindale has echoed these sentiments. He believes that the contract with EDF energy to build an EPR at Hinkley is reasonable, despite its high, costs, because the plant would provide 7% of UK electricity: carbon and air pollutant free. But this belief only holds if the new reactor were built on time and on budget – conditions that it is widely accepted Hinkley will fail to fulfill. Stephen told this morning’s Today Program that “there are many different types of reactor and the UK government has unfortunately chosen a bad one: the European Pressurized Reactor is impossible to build on time and on budget”. He continued that now there is an opportunity for Amber Rudd to say “this was a mistake and lets start again”.

A new start, and a genuinely positive development for the UK, would be for the government to stop wastefully ploughing time and money into the stagnant Hinkley project. There are a wealth of more advanced reactors that could potentially promise better safety, higher security, greater sustainability and importantly, lower costs. The government has funding, sites and support it could and should offer to make a prototype of one or many of these designs a reality – this is what the British nuclear industry should really hope for. Listen to Stephen’s BBC Today Programme interview here:

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