Hinkley nuclear deal: 6 things green businesses need to know

The Hinkley Point nuclear reactor could be producing power in 2025 after the UK Government secured a £8bn investment from its Chinese counterpart yesterday.

The deal guarantees plant operators EDF a 35-year Contract for Difference strike price of £92.50

The deal guarantees plant operators EDF a 35-year Contract for Difference strike price of £92.50

Predictably, the announcement prompted outcry around the renewables and sustainability industry, as various trade groups were baffled by the subsidy support being handed out to nuclear at a time when green subsidies are being cut to the bone.

Here are five things you need to know about the Hinkley plant in a sustainability context.

1) It costs more than renewable energy

The deal guarantees plant operators EDF a 35-year Contracts for Difference strike price of £92.50

According to the Renewable Energy Association (REA), the strike price for solar over the next 15 years is 14% lower at £79.2/MWh.

REA chief executive Nina Skorupska said: “The REA welcomes the government’s continued commitment to low carbon energy production, but urges them to reveal the overall energy strategy. The industry and the public are concerned and unclear about the future of renewables, many of which are roaring towards the point in which they need no subsidy at all.

"Based on the CfD strike prices the cost to the public for solar is already almost 15% less than for nuclear (on a per unit of electricity basis), but with shorter contracts and with costs continuing to decline."

"The REA is very interested to understand the government’s vision for decentralised energy production in the UK, which allows communities, homeowners, and businesses to directly take a stake in their energy future.“

2) The wind industry has a similar point to make

The estimated £24bn total cost of the project could deliver six times the power-generation capacity through investment in wind turbines, according to reseach from Bloomberg New Energy Finance.

Onshore wind received strike prices at £79.2/MWh in last years CfD auction.Using that starting point, a £24bn investment could create 21GW of capacity.

Hinkley will supply 3.2GW, although it is worth noting that it is stable baseload power, and the area of land needed is much, much smaller.

3) More research is needed to limit the environmental impact of nuclear waste

The Institution of Mechanical Engineers welcomed the news of China’s investment, saying that nuclear was one of the least CO2-intensive ways of generating baseload power.

However the group’s head of energy and environment Dr Jenifer Baxter added: “But while it is important to look to secure future energy supplies, the Government also needs to encourage significant investment in the whole nuclear life-cycle.

"We still need proper research and development into methods for recycling and maximising the energy returns from nuclear waste. We haven’t yet found a way of dealing with the large stockpile of nuclear waste at Sellafield, which is set to include an estimated 140 tonnes of plutonium by 2020.

“It is clear the UK has been too slow to address this issue. Long term deep geological disposal offers a potential solution, however around 20 years of testing is required in the UK for this approach to be used with confidence and we are yet to start this process.”

4) Is 2025 a realistic target for Hinkley generation?

Greenpeace have been among the campaign groups pointing out that there is no guarantee that the quoted targets of 2025 for power generation and a cost of £24bn will ever be met.

In the last week, reports have emerged about two nuclear plants using the same technology in France and Finand that have seen costly delays.

After a series of setbacks, EDF’s Flamanville plant is now scheduled to begin generating in 2018 with a cost of €10.5bn - that’s three years behind schedule and €7bn over budget.

A plant being built in Finland using the same design – the European Pressurised Reactor – was supposed to have been finished by 2009. Now the promoters say it should be ready by 2018. Costs have almost quadrupled. These are the only two plants in Europe using the European Pressurised Reactor design.

Greenpeace chief scientist Doug Parr said: “With this deal George Osborne is not so much backing the wrong horse as betting billions of consumers’ money on a nag running backwards. There’s no end in sight for the nuclear industry’s dependence on billion-pound handouts whilst the renewable sector is on the verge of going subsidy free.”

5) Does the public want it?

The public aren’t really sure by the looks of it. A survey of more than 2,000 adults by Populus, commissioned by Greenpeace, found that just 10% strongly supported it and 18% slightly supported it.

However 17% slightly opposed and 17% strongly opposed, with the biggest section of respondents (37%) saying they didnt have an opinion or didn’t know.

By contrast, in the Governments own survey of public opinion, 74% of respondents supported offshore wind and 68% supported onshore wind.

As for the experts, in a recent poll of more than 500 edie readers, almost three quarters answered ‘Yes’ to the question: ‘Should the UK Government continue to support and subsidise nuclear power?’

6) The deal could pave the way for more nuclear capacity

The Chinese investor – state nuclear company CGN - announced in the aftermath of the deal, that it would be seeking permission to build another reactor in Essex by 2023.

The Telegraph reported that permission for the project may have been part of the agreement for the Hinkley funding.

Brad Allen


CfD | low carbon | nuclear


Energy efficiency & low-carbon
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