Well, I must say, my brain hurts just trying to keep up…
No sooner had EDF given its blessing to its beleaguered Hinkley Point C new nuclear project, then the government became responsible for yet another delay, saying it needed more time to think.
The headline ‘Hinkley project delayed’ is becoming all too familiar. The project has been on the cards since long before I joined Utility Week, and is so far an ‘impressive’ eight years behind schedule.
It might just be one of the most controversial projects in the energy sector. Mention ‘Hinkley’ and you’ll have many an industry eye rolling. And the reaction to the latest chain of events has been awfully entertaining.
A particular favourite from Twitter was this reactive limerick:
The UK is acting distinctly
Equivocal vis-a-vis Hinkley
The price paid for power
Per megawatt hour
May leave us in debt when we’re wrinkly.— Mick Twister (@twitmericks) July 29, 2016
But amid all of the hype and frenzy, there are some key issues which the government will be mulling over and weighing up over the next few (or many) months.
In EDF’s corner, the arguments for are:
“It would provide reliable baseline power”
EDF says the plant alone will provide 7 per cent of the UK’s generation needs.
“It is low-carbon”
EDF estimates that the electricity generated from Hinkley Point C will avoid 9 million tonnes of carbon dioxide emissions a year, which is 600 million tonnes over its 60-year lifespan.
“It would create jobs”
Over its 10-year construction period, EDF says Hinkley will create around 25,000 jobs. And even when it is up and running, the plant will need a workforce of around about 1,000 people to keep it going throughout its 60-year operation.
For the environmentalists, nuclear-sceptics, supporters of nuclear but haters of Hinkley, the arguments against are:
“It is expensive”
The plant has an eye-watering agreed strike price of £92.50/MWh. When compared with the average daily price for power, which was £37.24/MWh in June, this seems ridiculous, and has led many to question the projects value for money – and rightly so.
Although, it must be mentioned that Hinkley-supporters hope it will pave the way for further new nuclear power stations in the UK, which will ultimately bring down the quoted strike price.
EDF’s ability to finance the project is dubious at best. At £18 billion, the cost of building Hinkley is almost equal to the value of EDF itself – £19.2 billion – and at the end of 2015, the company had net debts of £37.4 billion.
“It is unproven”
There are currently no working examples of the European Pressurised Reactor, which will be used for the plant. Reactors being built at France, Finland and China have been plagued by cost overruns and delays. The owner of the Olkiluoto plant in Finland, TVO, has taken legal action against reactor manufacturer Areva NP because of the problems.
It seems a little nonsensical to spend such a large chunk of money on something that we don’t actually know will work – no?
“It could be dangerous”
It’s no secret that nuclear material is dangerous. It’s radioactive, it has a very long life, and it is notoriously difficult to disposal of.
One thing is sure, both EDF and the government have been kicking the proverbial can down the road for long enough, and until first concrete is poured, many remain sceptical that the project will ever be completed. But aside from all of the too-ing and fro-ing, a FINAL decision will, at some point, have to be made.
As long as the government is referring to genuine autumn (September/October this year) and not the ‘political autumn’ (February/March next year), then Hinkley still stands a chance.
I started this blog the evening EDF’s board gave the project the go-ahead, but before the government delayed it again.
My original ending, pre-government-delay: The announcement is sure to have the environmentalists up in arms, while the nuclear-philes rejoice. But for EDF the journey is far from over, and the road will be long and winding.
My post-delay ending: I just don’t know any more…
Meanwhile, the water industry has suffered its own setback, or at least there has been talk of it, as doubts have been cast and questions asked about the programme for retail market opening.
A group set up to review market opening warned in April that the programme was under threat and urged the water sector to “act urgently” to ensure major issues, which could jeopardise its success, are resolved.
Those responsible for the market opening maintain, nay insist, that the programme is on schedule. But murmurings about it being ‘on red’ or ‘on amber’ make for an unsettling backdrop to the ongoing preparations.