Hinkley Point: The ‘Dreadful Deal’ Behind the World’s Most Expensive Power Plant
December 25th, 2017Disclosure: I sell solar power systems in New Zealand.
—
Via: Guardian:
Hinkley Point, on the Somerset coast, is the biggest building site in Europe. Here, on 430 acres of muddy fields scattered with towering cranes and bright yellow diggers, the first new nuclear power station in the UK since 1995 is slowly taking shape. When it is finally completed, Hinkley Point C will be the most expensive power station in the world. But to reach that stage, it will need to overcome an extraordinary tangle of financial, political and technical difficulties. The project was first proposed almost four decades ago, and its progress has been glacial, having faced relentless opposition from politicians, academics and economists every step of the way.
…
To pay for it, the British government has entered into a complex financial agreement with Électricité de France (EDF), the energy giant that is 83% owned by the French government, and China General Nuclear Power Group (CGN), a state-run Chinese energy company. Under this contract, British electricity consumers will pay billions over a 35-year period. According to Gérard Magnin, a former EDF director, the French company sees Hinkley as “a way to make the British fund the renaissance of nuclear in France”. He added: “We cannot be sure that in 2060 or 2065, British pensioners, who are currently at school, will not still be paying for the advancement of the nuclear industry in France.”
Many British observers agree that the deal is ludicrously favourable to EDF – “a dreadful deal, laughable” says Prof Steve Thomas, who works on energy policy at the University of Greenwich. But even insiders at EDF aren’t entirely happy with it. In the months before the EDF board finally signed off the deal in autumn 2016, the finance director resigned, along with Magnin. “The Hinkley Point project remains very risky,” Magnin told me. He is particularly concerned about EDF’s ability to complete the project before the current deadline of 2025. “Why have we reached this point?” asked Magnin. “It is the construction of a house of cards.”
…
But the irony of Hinkley Point C is that by the time it eventually starts working, it may have become obsolete. Nuclear power is facing existential problems around the world, as the cost of renewable energies fall and their popularity grows. “The maths doesn’t work,” says Tom Burke, former environmental policy adviser to BP and visiting professor at both Imperial and University Colleges. “Nuclear simply doesn’t make sense any more.”
