The facts about the UK’s next generation nuclear power plants can only be described as shocking:
- £18bn (or circa $27bn) for the Hinkley Point nuclear power station that is due to be completed in 2025. That represents a capital cost of £5.6bn ($8.6bn) per MW as opposed to a similarly sized gas powered station which would cost one fifth of that amount!
- This will all be financed by the end customer who will pay the Hinkley Point C owners some £92.50 ($142) in 2012 terms per megawatt-hour (plus an inflation kicker) produced for 35 years, which is twice the wholesale power price in the UK.
- And then there is the small issue of China which will provide £6bn ($9bn) in capital for a 33.5% stake in the power station as well as equipment and engineering expertise for the plant.
- And let’s not forget that the EPR technology that will be used in Hinkley Point is still not proven. There are two plants being built in Europe that use this technology, one in Finland, one in France and both are over budget and behind target; and surprise, surprise so is Hinkley Point. It was meant to go online in 2023 and is already two years delayed.
- But I suppose what gets me most concerned is my own view that we are in an energy revolution that will change our energy world forever. We are seeing massive technology change in terms of mobile and internet all around us and we are also seeing huge change in energy. For instance, it would have been unthinkable a decade ago, that the US would not only increase oil and gas production but that it would also become the biggest producer of both fuels. Similarly, every utility thought that solar was a bit of joke ten years ago. This year there will be over 50GW of solar installed globally more than any other power generation technology. And there is more to come. Solar costs will continue to fall; as will wind and we will see increasingly cost competitive storage in the form of batteries in coming years. And I am sure there will be other technologies such as fuel cells that will come our way over the next decade. Point being that by the time Hinkley Point C will be built it will be an old and outdated technology, based on a design that is close to 20 years old, and it will run for 35 years and then have to be cleaned up!
- And then there are the comments from the politicians. The former UK energy minister British Energy Secretary Edward Davey called the Hinkley Point deal “a good deal for consumers,” while the current minister Amber Rudd said that it will provide “clean, affordable and secure energy that hardworking families and businesses across the country can rely on now and in the future.” Why can these politicians not be honest with us about the real reason for the UK’s highly expensive new build nuclear policy.
The real reason that new nuclear power stations are being built is called defense and the fears among the British establishment of losing “nuclear know-how” and perhaps more importantly there is the pending need to replace the Royal Navy’s four Vanguard-class ballistic nuclear missile submarines with new ones. And mark my word the British Prime Minister will seek parliamentary approval next year to start building the Vanguard replacement or “Successor” submarines. And their full cost could be as high as $256 billion! And then there is the issue of how to store and maintain laid up nuclear submarines (19) the cost of which was £3.4bn last year! Decommissioning of old submarines is a costly job and these costs are currently shared with nuclear for power generation purposes.
What we need is for the politicians to come clean, and to be honest about nuclear policy and to allow a real debate to take place on the role of nuclear in Britain in the 21st century as well as the true costs and benefits of that policy.