What’s the (Hinkley) Point? It would be best if Britain’s French nuclear partner threw in the towel. It is symbolic of a “nuclear renaissance” after the failure of a state-run industry that limped along from the 1950s to the 1980s, and equally fraught private ownership during the next two decades. It is meant to show how private investment, with a helpful state behind it, is the best model, giving a renewed lease of life to the nuclear industry, says a new book, “The Fall and Rise of Nuclear Power in Britain”, by Simon Taylor, of Cambridge University’s Judge Business School. Yet as the book witheringly points out, the result would be “the most expensive power station in history”. The projected costs are comparable to those of the Three Gorges power station in China, which has about seven times the planned generating capacity—albeit non-nuclear. They may rise if EDF’s painful experience of building two of the same reactors in Finland and France is any guide. Both those European Pressurised Reactors are years behind schedule and three times over budget; there is even a possibility that the French one, Flamanville 3, will be dismantled. Politics may trump economics; Britain has committed to stringent climate goals, and France would discourage EDF from abandoning Hinkley Point because it would end the dream of a nuclear-export industry. If EDF does pull out, Dieter Helm of Oxford University says the British government has a fallback option: it could float “nuclear bonds” at low interest rates to pay for the project. That, he says, would be cheaper than the 10% annual return that the French would charge.
Economist 27th Feb 2016 read more »
Pity poor Jean-Bernard Lévy, the chief executive of the French power giant EDF. He is going to have some explaining to do the next time he encounters Amber Rudd, our formidable Energy and Climate Change Secretary. This week, Mr Levy vowed that his board will make a final investment decision on whether to build and run the long-planned Hinkley Point C by the end of the year. At £24.5bn this nuclear power plant in Somerset, which is supposed to herald a new generation of reactors, is a huge commitment – even for a state-backed behemoth like EDF. Ms Rudd said she “fully expects EDF to go forward” and make that commitment “very shortly”. When asked if, by this, she meant next month, the high-flying star of the Conservatives’ 2010 intake said: “I certainly hope so.” What’s the difference between “very shortly” and “very soon”? A good several months, as it turns out. Asked if he meant a decision would be taken this year, he happily grabbed the longer timeframe: “If in my thinking ‘very soon’ did not mean this year, I would be disingenuous.” Of course, this year could mean next month, but it won’t. Any chief executive with the weight of the state on his or her shoulders would take the maximum time necessary to check out the deal – and, whatever his claims to the contrary, Mr Lévy will surely want to wait until the result of the European Union In/Out referendum in June.
Independent 25th Feb 2016 read more »
The date now being talked about for switch-on is 2025, another nine years hence. The British media and public have grown increasingly sceptical, but there persists a kind of mad logic to the government’s approach. It is – as the saying goes – in for a penny, in for a pound. Coal plants are being closed down and new capacity is needed. The country has applied for, and been granted, permission by the EU to guarantee up to £16 billion in loans for Hinkley. The two Chinese units are, incidentally, only four years behind schedule so far, compared with nine years each in Finland and France. Perhaps CGN will step up its funding to save the British government’s agony. But as the case for halting Hinkley Point C becomes stronger, it’s equally possible that the special relationship Cameron thought he was cultivating may be about to suffer a little nuclear fallout.
South China Morning Post 25th Feb 2016 read more »
Tim Yeo: Echoing recent warnings on this website the Financial Times concluded a leader column last week with the words “politically painful it may be but the case for halting Hinkley Point C is becoming hard to refute”. Sadly the latest smoke signals from Paris are far from encouraging. Despite the best efforts of EDF, backed up by steadfast, indeed generous, support from the British government, the prospect of this project ever reaching fruition is fading fast. It’s a decade since Tony Blair belatedly realised that Britain cannot achieve security of electricity supplies and reach its carbon emission reduction targets without significant investment in new nuclear. But after ten years of dither and delay Britain is no nearer generating a single kilowatt of electricity from a new nuclear power station than it was in 2006. So the question now is where is Plan B? In sharp contrast to this lost decade in Britain progress in some other countries has been positive. Take the UAE for example where a Korean led consortium signed a contract for the construction of four new nuclear power stations in the UAE in 2010. Next year it expects to start generating electricity at a price well below the £92 per megawatt hour which Britain had to guarantee EDF to get them to proceed with Hinkley, proving that it doesn’t have to take for ever to build new nuclear. The problem for Britain is that abandoning Hinkley Point C has consequences which go far beyond the crowing by the anti nuclear brigade that the news will undoubtedly provoke. Hitachi has not yet secured investors for its proposed new power station at Wylfa and recently warned that this project will be in doubt if Hinkley does not proceed. There will be acute embarrassment also for the British ministers who courageously went out on a limb to back EDF and its Chinese partner CGN. But every problem contains an opportunity. Decisive leadership from Government could still turn this current challenge to advantage by exploiting the valuable cards Britain can play when it comes to new nuclear.
New Nuclear Watch 24th Feb 2016 read more »