In an interview with Utility Week Graham, who was appointed chief executive of the National Infrastructure Commission (NIC) in late 2015, said that it is inevitable that the Hinkley Point C will be unusually expensive. Construction costs for the plant are currently projected at £18 billion.
“If you haven’t been investing in nuclear capacity for many decades – when you come to make that step change the first step will always be the most difficult and the most expensive,” Graham commented, before adding that this should not be the basis on which the success of the project is assessed.
He said: “When we come to look at the long term costs and benefits of Hinkley, it won’t be just on the basis of what that power station provided and how much that power station cost. It will be on the basis of how much it opened up the supply chain for new nuclear and the costs of subsequent new nuclear plants.”
The NIC was set up by government in October 2015 to bring clarity and long term thinking to national infrastructure challenges. It is charged with identifying priority areas for investment in order to meet future social, economic and environmental requirements.
Among the first outputs of the NIC was a report titled Smart Power which claimed that £8 billion per year in consumer savings could be realised by 2030 by transforming the UK power system to become more flexible, by growing interconnection, energy storage deployment and demand side solutions.
Some proponents of flexible power have claimed that sufficient growth in these solutions could negate the need for new nuclear generating capacity. Graham disagreed.
“Nothing that we have done seems to suggest that we won’t need to invest in fairly significant amounts of new generating capacity,” said Graham. “The question is about what the generating mix will look like and to what degree we need new generating capacity in relation to additional flexibility, efficiency.”