£20bn to build Hinkley and more power stations to come – but can Britain afford to invest in nuclear energy? It was the biggest blackout in a decade, plunging millions in into darkness and transport chaos. Yet in North Somerset on the mouth of the River Severn, where Hinkley Point C is emerging from the dirt on a vast 167-hectare building site, it was a reminder why reliable nuclear energy is still considered a crucial part of Britain’s energy mix. “Nuclear has always been controversial, but it is the biggest single source of low carbon, dependable electricity we have,” says Tom Greatrex, chief executive of the Nuclear Industry Association (NIA). “And if we are to have any chance of meeting the Government’s zero-emissions targets by 2050, we need this firm power source whose output does not vary so that when the weather changes or there’s shortage of gas, it can provide constant energy.” Critics question the need to build such an expensive power source when cheaper, quicker, greener alternatives, such as wind and solar, are available. According to some opponents of Hinkley, energy storage technology and carbon capture are progressing at such a pace that by the time reactors are switched on they will not be needed. Detractors also attack the nuclear industry’s terrible track record of missed targets. Costs at EDF’s comparable project on home turf in Flamanville have soared and the build is a decade late. These high upfront costs have put off a number of other developers from building out Britain’s nuclear fleet. Earlier this year a project in Wylfa in Wales, run by Hitachi, was put on ice because of funding difficulties. Toshiba’s plans for a new nuclear plant in Cumbria were recently panned for similar reasons. By contrast, wind and solar farms are surging ahead as costs are falling and delivery times are short. They can be built, connected to the grid and start generating revenue in a short space of time. The trouble, however, is that these are unreliable forms of energy, generating power only when the wind blows and the sun shines. Offshore wind, on average, will run at 45pc capacity over a year. Nuclear has been consistently providing about a fifth of the country’s energy needs since the 1950s, operating at 85pc capacity. New reactors like the ones at Hinkley will run at 95pc. Both the Government and the Committee on Climate Change have said that to meet its commitment Britain will need to generate more than a third of its electricity at nuclear plants or fossil fuel stations fitted with carbon capture and storage technology. Such systems are still in trials, so the nuclear sector senses a big opportunity if Hinkley Point C can deliver. More new plants will require more funding, but high upfront costs and high risks associated with a complicated build mean few companies and investors want to get involved with Hinkley. A new funding model known as regulated asset base (RAB) could provide the key, the Government hopes. At Hinkley, EDF and CGN must wait until reactors are generating electricity to begin recouping their investment. RAB means that developers can earn milestone payments, via a levy on consumer bills. It has been used to fund and reduce risk on the Thames Super Sewer, a major infrastructure project which had investors lining up for predictable returns.
Telegraph 14th Sept 2019 read more »