Technology 25 September 2019 By Adam Vaughan The Hinkley Point C Construction SiteEDF EnergyIt’s nearly two years since Christmas turkeys were meant to be cooking with electricity from the Hinkley Point C nuclear power station. Today EDF Energy, the company building the vast 3.2 Gigawatt plant in Somerset in the UK, admits even the latest…
25 September 2019
By Adam Vaughan
It’s nearly two years since Christmas turkeys were meant to be cooking with electricity from the Hinkley Point C nuclear power station. Today EDF Energy, the company building the vast 3.2 Gigawatt plant in Somerset in the UK, admits even the latest plan of delivering power by 2025 is at an increased risk of being missed.
EDF Energy says that “challenging ground conditions” mean costs could be £2.9 billion higher, taking the total bill to £22.9 billion. This might seem only of interest to EDF shareholders, given the controversial subsidy deal for the plant means consumers are protected from cost overruns.
But the potential significance of this is much bigger – it could cast a cloud over the UK’s hopes of a new wave of nuclear power plants. Ministers want more nuclear power in the energy mix alongside renewables, to meet carbon targets and provide continuous electricity supply.
Two Japanese companies have already pulled out of plans to build new nuclear plants in the UK, leaving EDF Energy’s designs for a second one at Sizewell in Suffolk as the main option. But the government’s proposed financial model for Sizewell C is very different to the one agreed for Hinkley. Unlike that deal, the “regulated asset base” (RAB) model under consultation for future plants would see consumers paying through energy bills while power stations are still being built.
The main trade-off with the RAB deal was that loading more construction risk onto consumers should make it cheaper to raise funds and therefore cheaper electricity, says Jonathan Marshall at non-profit the Energy and Climate Intelligence Unit.
But the more delays and over-runs there are, it will add to concerns that consumers will be left to pick up an ever-increasing bill, he says. “Consumer groups and others that are against the new framework are going to point to the delays at Hinkley as evidence that billpayers will be liable to pay more than planned to bring new power stations online.”
EDF Energy says that learning lessons from Hinkley means that spiralling costs may not happen with a second power plant. But that may not be important.
“The case for nuclear is not about economics,” says Peter Atherton at market research firm Cornwall Insight. He says that even though nuclear is very expensive, it is currently the only way for the UK to get continuous power in a zero carbon system. “That doesn’t change if it’s a bit more expensive or a bit less expensive,” he says.
The government has made no comment on the budget overruns or what it might mean for the RAB model. Observers think it is unlikely the UK’s commitment to new nuclear will waver. “From the government perspective it’s driving through decarbonisation as fast as it can. It cannot get there without a sizeable nuclear contribution,” says Atherton.
What are the alternatives? Some nuclear proponents think small modular reactors could do the job. But the technology for commercial ones is still years off and analysis suggests they could even be more costly than conventional large ones.
The government’s infrastructure advisers says only a single nuclear power plant should be built after Hinkley because renewables are a less risky choice. Atherton is sceptical renewables and large scale batteries today can yet fill the role that nuclear plays in the energy system, for the same price. But there are signs that won’t always be the case. Just last week, the cost of subsidising offshore windfarms dropped to a record low, and may result in consumers’ energy bills falling. The dream of a nuclear dawn may not have died today, but a nuclear sunset is looking increasingly more likely.
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