So with China’s investment announced last week, construction on Britain’s new nuclear power station looks one step closer to starting. I suspect there may be a couple more rolls of the dice just yet, but the government is committed. Yes, funding the world’s most expensive building project will break their own promises to keep bills down. Yes, it is hypocrisy to insist that solar must “stand on its own two feet” as a technology while nuclear never has. And yes, it breaks the free market principle of not picking winners. Regardless, committed they remain.
Even without all this, there’s a simple reason why the new power station at Hinkley Point is a very bad idea: it’s simply out of step with trends in energy. It will be uneconomic by the time it comes online, and will remain so for as long as it operates.
Here’s a useful graph from Bloomberg New Energy Finance, showing the projected changes in the cost of various kinds of energy.
As you can see, between now and 2040 the cost of wind and solar power fall, while the price of coal and gas rise. With advances in storage and base load management, in a decade there will be no reason to build new coal and gas power stations – renewable energy will be cheaper. This is, incidentally, the main reason why fracking isn’t as exciting as some people think either.
Now, this is an imperfect image to be making this point, I realise. It’s Europe rather than UK prices, it doesn’t have the full range of technologies, etc. But taking it as broadly illustrative, let’s add Hinkley Point in there. The government has already signed off at a guaranteed minimum price of £89.50 per Megawatt hour, for 35 years. That’s $137 in today’s exchange rate, so let’s crudely stick that in here and see where it falls.
Hinckley Point is due to start generating power in 2023. It’s probably safe to assume it will be delayed, as nuclear power stations generally are. But even giving it the benefit of the doubt, it’s expensive energy when it comes online and it becomes a worse and worse deal with every passing year. Over the next 20 years the price of renewable energy continues to fall, and that fixed price for nuclear power soon makes it the most expensive form of energy.
That’s not an argument against nuclear power generally, just against this particular proposal. It might be possible, eventually, to build economically and environmentally viable small-scale nuclear power plants – maybe. But the government’s current policy of slashing support for renewable energy and turning to new gas and nuclear is profoundly misguided.
The Earthbound Report 
It’s plain mad to me! Not only are china paying for it but a french company are running it, so will the UK benefit in anyway at all, does not look like it!
The government have their agenda and this is to keep their sponsors happy!
Storage getting better? See (by googling) ‘The Catch-22 of energy storage’ by John Morgan
Also see ‘Why the Best Path to a Low-Carbon Future is Not Wind or Solar Power’ from VRE SeekerBlog for other views.
I have a link here for much info http://seekerblog.com/tag/vre/
The first point has to be that saying £89.50 per megawatt is too high for Hinkley Point when the Swansea barrage is £168 per megawatt does undermine the pure cost argument. I mean that would be over $255 dollars per MWH so off your chart and for 120 years.
The second pint is that gas prices on this chart hardly rise. As Liebreich says in his notes that accompany the presentation these graphs are from, it is wrong think fossil fuel prices will rise forever. For example “in the U.S., oil and gas unit costs have come down about as rapidly as solar power costs over the past five years”.
Your bar across the graph for Hinkley Point is also needed for wind and solar. Wind solar and nuclear all have in common the fact that their main cost in the capital to build them. So you are fixed to that cost when you build it. Gas and Coal having much higher share of their costs in fuel so their costs fluctuate while wind, solar and nuclear are fairly fixed. Any future falls in installation price do not effect existing capacity. Those have to be paid for at their original capital price. A wind turbine installed today that needs $100 per MWH to cover its costs will not get cheaper over the next twenty years. It will still need $100 per MWH in 2030. It doesn’t matter that a replacement turbine in 2030 needs $75 per MWH, you are stuck with the older less efficient ones’ capital costs.
We have an urgent need for extra capacity now, not in a decade. Spare capacity in the grid is down to below 5% and is to getting worse. If we build that new capacity in wind and solar then we are stuck with the higher current installation prices feeding into electricity prices for their life-time rather than those prices of 2025 or 2040. Gas power stations are fairly quick and cheap (for now) in comparison to both nuclear and renewables.
As we have discussed before Hinkley is currently the only nuclear option on the table. The anti-science protestors such as Friends of the Earth and co will oppose mini nuclear power stations. And now we have the complaints of foreigners, coming over here, risking their cash, investing in our electricity, keeping our lights on. How dare they! Since mini nukes would be foreign designed and funded the xenophobia would be just as bad or worse.
What most interested me from the presentation was the charts of projected Australian Electricity demand made from 2010 to 2014 against what the actual demand was (p32-41). A salutatory lesson in not just projecting forward with straight lines. Maybe a pointer to peak stuff or a decoupling of energy from GDP?
Yes, I was interested in Australia’s electricity demand peaking, and made a note to come back to that in another post.
We talked about the Swansea tidal programme before, and the difference as I see it is that Swansea’s is a world first. It’s an experimental idea, and is piloting something. The second and third tidal barrages will cost much less, and we will have pioneered a new form of clean energy.
What we’re signing up for at Hinkley is the EPR reactor, which is already proven to be problematic. The Finnish one is a whole six years behind schedule with another three to go, and is over twice its initial budget. The French one is three times over budget and years late too, and at least one of China’s is late. We seem to be hoping for fifth time lucky.
But don’t take my word for it – ask EDF. They’re already working on something better. If it’s ever built, Hinkley and Sizewell (if they get their way) will be the last attempts at building the EPR. According to EDF’s own CEO, the new improved model is likely to be online and generating power in France before ours are finished.
Or ask Europe’s banks and finance industry. There’s a reason why we’ve had to go cap in hand to China to get this thing funded. Nobody else wants the risk.
And if you’re worried that we need “extra capacity now, not in a decade” – Hinkley C is due online in 2025.
I honestly don’t think I’m out on a limb here. And I’m not anti-nuclear either. I just think this project, in conjunction with the reversals on renewable energy, is one of the world’s dumber energy policies.
Of course, opposing Hinkley is one thing. What we should do instead is another, and I’ll come to that in due course.