Hinkley Point: Green economy reacts as Government approves nuclear power deal

The Hinkley Point C nuclear power station in Somerset has today (15 September) been given the go-ahead by UK Prime Minister Theresa May, ending months of speculation and dividing opinion among Britain's industry groups and environmentalists.

The project – the first new nuclear reactor to be built in the UK in two decades – is set to be constructed by French energy company EDF, with financial backing from China.

The Government had recently delayed approval of the controversial £18bn nuclear project after concerns were raised over the security implications of Chinese involvement in Britain’s nuclear industry.

This new agreement means the Government will be able to prevent EDF from selling a controlling stake in the plant without the prior approval of ministers. It will take a “special share” in all future nuclear projects to ensure they cannot be sold without its consent.

Development of the Hinkley Point C project has already fallen eight years behind schedule and the power plant is not expected to be up and running until 2025 at the earliest.

In a statement this morning, Business and Energy Secretary Greg Clark said: “Having thoroughly reviewed the proposal for Hinkley Point C, we will introduce a series of measures to enhance security and will ensure Hinkley cannot change hands without the Government’s agreement. Consequently, we have decided to proceed with the first new nuclear power station for a generation.

“Britain needs to upgrade its supplies of energy, and we have always been clear that nuclear is an important part of ensuring our future low-carbon energy security.”

‘State of flux’

Claire Jakobsson, head of climate and environment Policy at EEF, the manufacturers’ organisation, is among those that are relieved that concrete steps have finally been taken by the Government to clarify its position on the project after months of delay and uncertainty.

“This announcement provides some positive news for industry,” said Jakobsson. “It is encouraging to see investment in major UK infrastructure projects continuing to go ahead.

“However, this project will clearly require a vast amount of support and it remains to be seen whether this deal is able to offer value for money. If new nuclear is to continue to play a major role we must see significant reductions in strike prices for future projects.   

“With such a large amount of subsidy going into this project it is essential that the Government ensures the opportunities for the UK economy are maximised, particularly for manufacturers. Within the deal is a commitment to keep 60% of the value of the project within the UK. We must now ensure this is delivered.”    

With an agreed strike price of £92.50/MWh, critics have continually questioned Hinkley’s value for money, particularly when the cost of renewable alternatives is falling fast. The power station is predicted to provide 7% of the UK’s current electricity demand, adding more than £37bn to consumer bills.

A recent report from Energy and Climate Intelligence Unit (ECIU) found that the UK could meet its future energy and climate change targets for cheaper without building Hinkley, through the continued development of renewables and energy efficiency measures. This followed analysis from the Intergenerational Foundation think-tank which revealed that scrapping plans for new nuclear reactors at Hinkley and instead building huge amounts of renewable energy systems would save the UK tens of billions of pounds.

Record-low support

Another study, from the Institute or Directors  (IoD), revealed that Hinkley’s expansion also remains a controversial decision among business leaders. A narrow majority (53%) of IoD members backed the project, while 37% believe the development would give the UK a ‘competitive edge’.

Earlier this week, Greenpeace released the findings of a public opinion poll which showed support for Hinkley to be at an all-time low. Just a quarter of the 2000 people surveyed by Populus said they supported the development of the power station, while nearly half (44%) opposed it.

In a question based on the UK’s energy priorities, 16% believed that the Government should prioritise nuclear, compared with 62% that backed an energy system based around renewable energy.

“The Government shouldn’t risk taxpayers money on old fashioned, flawed technology,”said Greenpeace executive director John Sauven. “It should be investing in the future.

“Advances in renewable energy like offshore wind, alongside battery storage, energy efficiency innovations and wires that carry electricity under the sea connecting us to other countries are the future for keeping the lights on. It is time the government embraced these developments, rather than lock us into a contract that will leave future generations with more hazardous nuclear waste, higher bills and dependent on French and Chinese state owned companies for our power.”

Now have YOUR say

Hinkley Point approval: The reaction

David Nussbaum, chief executive, WWF-UK

“If the Government is happy to commit that amount of public money to subsidise this project, we would expect them to do the same for renewables.”

Juliet Davenport, chief executive, Good Energy

“The decision to go ahead with Hinkley C is a bad move. It will take at least a decade to build and leave our grandchildren an inheritance of high energy costs, hazardous waste, security worries, and a plant that needs complex and costly decommissioning. No wonder only 36% of the British public support nuclear, compared to a whopping 76% for renewables.

“The same future generations that will blame us for Hinkley, could instead thank us for a legacy of investment in renewables. The transition to renewables is inevitable and brimming with economic opportunity – the UK should embrace it.”

Justin Bowden, national secretary for energy, GMB

“GMB is delighted that the first of the badly needed fleet of new nuclear power stations will finally begin construction. This is the right decision for the country and the government is right to ignore the begrudgers and naysayers.

“Having secure, low-carbon electricity, for the 61 days per year when there is no renewable energy sources available, is crucial if we are to meet our energy needs and reduce our dependency on foreign imports of power.

With Hinkley now confirmed, attention must rightly shift to the other new nuclear power stations – including Bradwell in Essex and Sizewell in Suffolk – which we badly need across the country. The solution however is not to handover the replacement of vital UK infrastructure lock, stock and barrel to China. GMB strongly cautions that the funding of nuclear developments should always be kept totally separate from the regulation of the design and construction of new nuclear facilities and the transport and safeguarding of nuclear and radioactive materials. Chinese pop-up power stations are not a solution on their own.”

David Elmes, head of the Global Energy Research Network at Warwick Business School

“This is what being painted into a corner feels like.  After a surprise delay by the new Prime Minister, Theresa May, the UK Government’s confirmation of the deal to build a new nuclear power station at Hinkley Point locks UK bill payers into an expensive source of energy for decades to come.

“The UK’s climate change commitments make it tough to provide electricity reliably at low emissions, but this deal was started a decade ago when we hoped the companies involved could deliver it on time and at a reasonable cost.  The price UK bill payers are committing to through the government is now double and the start date has slipped at least eight years.

“The choice the UK has for the supply and use of energy has changed considerably since this deal was first conceived. 

“The ability of governments, companies and financiers to commit to such huge projects has also faded. While those involved will be hugely relieved; we need a serious discussion of cost effective opportunities that offer as much or a greater contribution to the UK economy so we’re not boxed in to such a decision again.”

Josh Hardie, deputy director-general, CBI

“The final green light for Hinkley Point is good news for the UK’s energy future as well as supporting jobs and growth across the South West and the country.

“New nuclear energy will play an important role in supporting a diverse, low-carbon and secure energy supply, so it’s now time to push on with this key project.

“Investors are hungry for further signs from the Government that the UK is open for business. Pressing ahead with major infrastructure decisions – such as giving clarity to around the next Contracts for Difference auction and the post-2020 Levy Control Framework, and expanding runway capacity in the South East – would give a real boost to their confidence in the UK in the long-run.”

Simon Bullock, senior climate campaigner, Friends of the Earth

“Hinkley is a project from a dying era, which would saddle Britons with eye-watering costs for decades, and radioactive waste for millennia.

“Renewables, smart grids and energy storage are the fleet-footed mammals racing past this stumbling, inflexible nuclear dinosaur.

“The PM should act in Britain’s interests and invest in a renewable, non-nuclear electricity grid – it will give us more jobs and less pollution, at lower cost. This is blatantly the wrong decision from the PM.”

Tony Ward, head of power and utilities, EY

“Today’s announcement by Greg Clark is a hugely welcome validation of the work that previous Governments, developers and the UK’s wider supply chain and workforce have put in to ensure the robustness and deliverability of the proposals for new nuclear build.

“Big, tough decisions that benefit future generations and balance multiple needs are, and should be, hard to make – but that is precisely the role of Government.  It is absolutely right and proper that the Government has taken a final opportunity to validate the deal arrangements, security and governance structures.  After ten years of preparation and deliberation, it is now time to deliver.

“While technologies such as solar, wind and batteries will also be hugely important in delivering the UK’s future energy mix, new nuclear, starting with Hinkley Point, has a crucial role to play in displacing our reliance on fossil fuels. We are moving to a more balanced and diverse mix of zero-carbon power generation – a mix that will be capable of delivering reliable and robust baseload power.

“Hinkley Point is a transformational infrastructure investment that will bring long-term employment for a highly-skilled workforce, stimulus for the UK’s industrial supply chain and positive social and economic benefits for the South West region.”

Richard Black, director, Energy and Climate Intelligence Unit

“Despite this being called a ‘final decision’ to build Hinkley C, other hurdles, including technical and legal challenges, may well lie ahead for the project,” he said.

“French trade unions don’t like it, nor do some of the likely candidates for the French Presidential Election next year, EDF’s finances are not the healthiest, and the French nuclear regulator is examining flaws in steel used for a similar reactor being built in France. So it may turn out not to be quite as ‘final’ as it looks now.

“Although China is reportedly happy with the new position, questions also remain over its main ambition – building its own nuclear reactors at Bradwell in Essex as a route into the Western market. The Chinese reactor hasn’t even begun the process of gaining UK safety approval, which usually takes four years, so negotiating a contract for Bradwell would fall to the next UK Government, not this one. By then, electricity from other sources might look a whole lot cheaper than it does now.”

Professor Tom Scott, co-director of the South West Nuclear Hub and Nuclear Research Centre (NRC) at the University of Bristol

“We warmly welcome this very positive decision from the UK government which will help significantly to underpin the security of our national energy supply for decades to come. Investments in low carbon energy technology such as this also signify the continuing commitment to decarbonising our electricity generation in order to fight against climate change.

“In order to support the UK nuclear renaissance we have recently opened the South West Nuclear Hub, a venture led the University of Bristol, which seeks to provide leadership and excellence in nuclear research, teaching and innovation.

“Ongoing, the hub will involve all the major regional universities working together in close partnership with industry to provide a pipeline of skilled people to enter and support the industry.

Dr Jenifer Baxter, head of energy and environment, Institution of Mechanical Engineers

“This announcement is welcome and great news for the nuclear sector, however, it is important to note that this is not the end but merely a small step at the start of securing our low carbon energy requirements for the future. 

“As outlined in our policy statement earlier on this year, the UK is facing an electricity supply gap by 2025, so the Government must ensure that a plan is put in place to meet future carbon targets as well as developing skills and growth for the sector. 

“The development of Hinkley Point C provides an opportunity for the Government, in collaboration with the National Grid and groups like the Institution of Mechanical Engineers and the Energy Systems Catapult to fully understand the likely future capacity gap and identify generation needs, types and emerging technologies that can potentially bridge this gap.

“It is now more important than ever to focus on attracting business and foreign investment to our nation following the Brexit vote. The Government must work with industry to ensure we have modern, reliable and secure infrastructure, be it in energy, transport or communications.”

Chris Kimmett, commercial manager, Open Energi

“No matter what happens on the energy system we need fast acting distributed flexibility to keep the lights on.

“It is misguided to think that large-scale nuclear generation capacity confers security. Only yesterday we experienced a major energy crunch that saw UK electricity prices soar to record highs, following 1GW of unplanned nuclear plant shutdowns by EDF. Rather than guaranteeing security of supply, Hinkley’s scale provides us with an even larger single point of failure on the grid. Closing down such a giant plant as Hinkley at short notice would immediately put the security of the nation’s electricity supply at risk, and this week shows us that this scenario is not unimaginable.

“The UK is already primed to become a global leader in innovative demand-side technology and the Hinkley decision means the flexibility conferred by smart DSR tech and storage will now be more necessary than ever.

“Unlocking the demand-side opportunity is not a ‘nice to have’ for energy market reform, it is fundamental to balancing a GB grid that will be dominated by large-scale, inflexible generation plant.”

Dave Cockshott, chief commercial officer, Inenco

“The Government’s decision to proceed with a new nuclear site at Hinckley point is a positive step forward for both UK PLC and the UK’s long-term energy strategy. However, whilst the prolonged period of uncertainty has finally come to a close, it is important to point out that this new plant is not going to solve the UK’s energy problems quickly or on its own.

Hinkley Point will only produce around 7% of the UK’s electricity and, assuming it is built on time, the plant will not be ready until the mid-2020s. This means that we need to act now on the UK’s short-term security of supply issues. Nuclear energy is just one piece of the puzzle and it is critical that the UK adopts an energy strategy that utilises a mix of supply sources; from renewables to fossil-fired generation.”

Mark Ruskell MSP, Energy Spokesperson for the Scottish Greens

“Hinkley is a total waste of public money and will simply add to the toxic legacy the nuclear industry has already left us to deal with. The anti-Green agenda of the Westminster Government is doing serious damage to Scotland’s renewable energy potential. 

“The Tories are locking us into a deal involving a type of reactor that has never been successfully built, with EDF’s other projects behind schedule and over budget. The fact that the UK Government is talking about future nuclear new builds underlines the need for Scotland to have greater control over energy policy, so we can chart a different course and create lasting jobs in industries that have a future.”

Karla Hill, director of programmes, ClientEarth

“This decision shows a lack of long-term strategic thinking that will not help the UK’s transition to an energy system fit for the future. We should be moving to decentralised, renewable production, with a focus on demand and energy efficiency. Instead the government is locking consumers and taxpayers into a huge centralised infrastructure project.

“When Theresa May announced a pause to examine the decision, we were hopeful that the government had realised what a mistake this would be. We will now have to deal with Hinkley Point C posing a constant threat to the renewable, decentralised energy system that consumers and the climate need.”

edie timeline: Hinkley’s approval

Luke Nicholls & George Ogleby

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