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The European Commission’s recent decision to allow the British government to guarantee the price of power from the yet to be built Hinkley Point C nuclear power station, on the face of it, looks to be good for nuclear and good for Britain.
The good news for nuclear is that this will be the first nuclear power station to be financed and built in Europe since the Fukushima accident and it seems to set a precedent for countries such as the Czech Republic, Lithuania and Poland who also want to build new nuclear power stations. Britain, on the other hand, will get its first new nuclear power station in more than three decades which will help secure power supply, enable the country to meet its carbon emission targets and in the words of British Energy Secretary Edward Davey “this is a good deal for consumers.”
How he came to this conclusion is beyond me as he has signed an agreement with the owner, the French utility EDF under which they will receive 92.50 pounds per megawatt-hour (plus an inflation kicker) for 35 years, which is twice the wholesale power price in the UK. How can paying more be a good deal for the consumer?
He could have easily signed a long-term power agreement with a whole host of utilities to deliver him the power he wanted and at cheaper rates! And if he had of wanted clean power he could build more solar and wind. Not only would that be at similar price levels and it would not take 10 years to build. The UK, for instance is likely to erect 3GW of new solar and wind capacity alone this year, and if they keep this up for the next decade then there would be no need for any new nuclear power stations. Of course you can say that renewable is intermittent but as Germany is showing both wind and solar are predictable and large amounts can be integrated into the power system. Whatsmore the costs of solar are falling. Nuclear costs on the other hand have only risen in the last forty years.
So for instance the Fessenheim nuclear plant in France was built in 1978 at a cost €1.1million/MW (in 2010 terms), while this figure rose to €2.1 million/MW for Chooz 1 and 2 in 2000. Meanwhile, France’s latest nuclear power station, the 1.6GW Flamanville 3, is due to start commercial operations in late 2016 – four years behind schedule. The original cost estimates, according to the French operator EDF for the plant were €3.3 billion. It is now expected to cost €8.5 billion. That will mean a cost of €5m/MW. Meanwhile over the last decade fully installed costs have fallen from €6m/MW to below €1m/MW. It is no wonder that it will overtake both gas and coal next year to become the biggest generation technology in terms of annual installations. It is cheap, flexible (from watch to rooftop to large scale system) and easy to install.
For nuclear, it is a long road from the infamous words of Lewis Strauss, Chairman of the US Atomic Energy Commission, in the early 1950s that the era of “energy too cheap to meter” had arrived. Or so it seemed.
The promise of nuclear power lies in its energy density. Nuclear reactors release a staggering amount of energy equivalent to an energy density of some 82 million MJ/kg (megajoules per kilogram). This compares with coal (26 MJ/kg) or oil (40 MJ/kg). In practical terms, one kilogram of uranium can power a 100 watt light bulb for 182 years, whereas the same amount of coal or oil can manage only 4 or 5 days of power respectively. Given this simple example, one can hardly blame Mr Lewis for his premature optimism.
Proponents believed all power generators in the future would be nuclear in nature. By the end of the twentieth century, there were 438 nuclear power stations in operation across the world with an installed capacity of 351 gigawatts. Some 15 percent of all electricity production across the globe was generated by nuclear power, which provided daily energy to roughly 700 million people.
However, accidents such as Chernobyl and Fukushima have forced a global rethink about nuclear and annual installations have retracted. The accident in Japan has had the additional impact of increasing safety related costs for all new reactors, and with European power prices near five-year lows, the viability of any new nuclear investments has been in real doubt. Or so it seemed until the EC allowed the UK to subsidize a new one. The question now is whether the UK’s Hinkley Point C will be the start of a nuclear renaissance.
The answer is a categorical no. And the UK government has probably killed all chance of it in Europe by putting in place a feed in tariff like subsidy which is not only above the level that most European countries pay for solar and wind but also sets a horrendous precedent for other countries who want to be nuclear builders. But the real issue with nuclear is that its costs have gone up as the years have gone by. It has a positive experience curve. The more we build, the more problems we realize the technology has and the higher costs go. Meanwhile solar like most of the digital products that make up our lives has a negative experience curve meaning that costs continue to go down as production goes up. And what the UK government has done is make a technology bet on a nuclear industry that has not proved adept at reducing its costs and doing so ten years in advance of that power station being built. Doesn’t sound very wise in the era of extremely fast technology change that we currently live it…