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Hinkley C goes ahead, but future nuclear costs must fall

There has long been talk of the need for a “nuclear renaissance”, and now it seems underway. The deal has been struck that would see the first new British nuclear power station in a generation. But is…

The future Hinkley Point C nuclear power station (centre), with older reactors. EDF

There has long been talk of the need for a “nuclear renaissance”, and now it seems underway. The deal has been struck that would see the first new British nuclear power station in a generation. But is this the first of a whole fleet of new nuclear power plants, or just a one-off project? The latter has happened before – at Sizewell B in Suffolk, the single reactor built in 1995 was to have been the first of a new generation of planned plants.

Today’s news is that a two reactor power station is to be built at Hinkley Point near Bristol capable of supplying 3,340MW, or roughly 7% of British electricity in the 2020s. This has come at a price, called the “strike price”. French company EDF Energy, the lead firm of the construction consortium, has secured a long-term commitment from the government that the nuclear-powered electricity it generates will be bought at the hefty price of £92.50 per megawatt hour. That wholesale price is almost double today’s market price, and isn’t far off what the end consumer is paying today to keep their lights on. When wholesale prices meet retail prices things are unsustainable. Don’t forget that between power generation and use there are businesses that deal with transmission, distribution and supply, and they all need their cut.

New nuclear power by numbers. EDF

New nuclear power stations will help us with our ambition to decarbonise the power sector and will do much to improve energy security. But nuclear power stations are not cheap, especially the French European Pressurised Reactor (EPR) chosen for Hinkley Point C. The high upfront costs of nuclear power today run into a political reality that for consumers, and hence voters, the dominant consideration in electricity is the bill and most especially the policy component of that bill.

EDF Energy has done well to win a high strike price for the new reactor at Hinkley Point. Prime Minister David Cameron has explained to the nation why it is a price that should be paid. The government believes in this step towards a renaissance of nuclear power in Britain, and he is willing to absorb the political heat even on the day that another of the big six power firms, NPower, hiked its electricity price by 9.3% and gas price by a whopping 11.1%.

While the UK can probably afford to build Hinkley C, it would struggle to afford a fleet of such low carbon nuclear power stations at such prices - consumers are just too tightly squeezed. If the UK’s low carbon targets are to be achieved, then the costs of low carbon electricity options including nuclear and renewables must fall if we are to succeed in replacing our polluting coal and gas power stations.

The two reactors to be built at Hinkley will be the third and fourth of a kind in Europe. Experience with the first two in Finland and France - have been mired in time and cost overruns. With lessons learned there and with recent successes such as the Olympics in mind, Britain’s engineering firms are quietly confident that they will do better. It is my hope that construction improvements can indeed be translated into lower costs for later units.

For a nuclear renaissance to take hold in Britain, then costs must fall. Those looking at new nuclear power stations for other proposed sites in Britain should plan to receive a lower strike price, not least because they cannot expect the Prime Minister to provide top-level rhetorical support again. That said, the government cannot relax, and with the industry it should now focus on the goal of further new nuclear power stations developed with affordability in mind.

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23 Comments sorted by

  1. Zvyozdochka

    logged in via Twitter

    The climate denying English Daily Telegraph posted a story that suggests that if the £16 billion were spent on energy efficiency retrofits there would be more jobs, a greater amount of carbon avoided and greater economic value.

    Part of the problem of nuclear/baseload power is there is NO CHANGE to the structural use of energy, inefficiency and therefore greater exposure to ever increasing price.

    We're so dumb.

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  2. Michael Shand

    Software Tester

    At least it's not fossil fuel, would prefer an LFTR but at least it's not gas or coal

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  3. rob thistleton

    logged in via Twitter

    Roughly 7% of British electricity in the 2020s presumably this involves prediction of growth?
    What makes you think firms will accept less, if they don't we are going nowhere with this.

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    1. Grahame Jordan

      Campaign organiser

      In reply to rob thistleton

      That 7% is a contested figure by the Claverton Group of energy experts - not sure who to believe.

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  4. Ben Heard

    Director, ThinkClimate Consulting

    I could barely agree more. Good piece.

    It is perfectly possible for something to be both good value and too expensive at the same time. That's what we have here. Prices must fall.

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  5. Adam Hughes

    Lecturer in Sustainable Aquaculture at Scottish Association for Marine Science

    The article states a 9,000,00 tonne C02 saving annually. It would be interesting to know the full 'carbon cost' of this technology including the construction (there is a lot of cement going in to it), the maintenance (including the mining and processing of the fuel), and the decommissioning and storage of the waste products. Then I think we can have a more open debate on the environmental and social costs. As for the economics, let the market decide....

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    1. Adam Hughes

      Lecturer in Sustainable Aquaculture at Scottish Association for Marine Science

      In reply to Ben Heard

      They are, but overall message as I understand it, is that the answer depend on a very large number of variables (how the construction is performed, how the enrichment is performed etc etc), so what I am asking is what are those figures for this project. It would seem inconceivable that this type of analysis has not be carried out for this specific project. If it has been done (for this specific project) then it should be in the public domain, if it hasn't been done then it begs the question of why not. The report does not really deal with the 'carbon cost' of decommissioning, instead it does give a lot of information about the financial cost (approx 200% of the construction cost if done in an environmental sensitive manner). If I I have read that correctly, it seems quite steep, I wonder who will end up paying for that? Probably the same people who will be paying for the decommission of the North Sea Oil industry (the tax payer).

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    2. Ben Heard

      Director, ThinkClimate Consulting

      In reply to Adam Hughes

      The range for Australia was 10-110g/kWh with a best estimate of 60. That accounts for the variables and is squarely in the range of renewables, notably better than solar PV.

      The lifecycle GHG question of nuclear is an answered one, and the answer is "just as clean as renewables, regardless of the assumptions"

      Sure if they've done it, publish it. It won't be material.

      Decommissioning funds are raised during the life of a plant, typically $1-3 per MWh. Again, not highly material in the scheme of costs.

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    3. Adam Hughes

      Lecturer in Sustainable Aquaculture at Scottish Association for Marine Science

      In reply to Ben Heard

      This is a huge range, what I am trying to ascertain is what the value for this particular project is. It is a dangerous assumption that it will be the median or average value. How can GHG claims be made without knowing this figure. Also the report states that it does not include mine clean-up, intermediate storage and long-term disposal of nuclear waste, so I am not so sure the GHG question is answered. If it is so well and generically known why has it not been calculated for this power station…

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    4. Michael Shand

      Software Tester

      In reply to Adam Hughes

      Understand the concern, however we have to be careful as almost everything now a days requires fossil fuel.

      This argument is used against wind turbines and solar as well - "But how much CO2 was used to build that wind turbine.."

      It is kind of a null argument, there is value in finding out and then recognising where you can say but it can't be an argument against nuclear, because it's an argument against everything at the moment

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  6. Luke Weston

    Physicist / electronic engineer

    It's an admirable move for the UK to commit to a real rollout of scalable, high-availability zero-carbon electricity generation, even though we know it will be noticeably more expensive than fossil fuel business as usual. (Without factoring in a dollar value for the external costs of fossil fuels, that is.)

    It might be claimed by some that the strike price set for Hinkley C is expensive, but check out this data - it shows, once again, that nuclear power is the cheapest of the zero-carbon technologies…

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    1. Luke Weston

      Physicist / electronic engineer

      In reply to Adam Hughes

      Technically yes you are correct, everything is non-zero when you look at life-cycle analysis, but for the sake of brevity I will use the term "zero carbon" for the lowest emission technologies - nuclear, wind, geothermal and hydro.

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    2. Adam Hughes

      Lecturer in Sustainable Aquaculture at Scottish Association for Marine Science

      In reply to Luke Weston

      We need to be very careful about the language we use, zero carbon energy is a very emotive term (akin to the holy grail). We need to (as society) understand that no choices are without consequence, and using the phrase zero carbon electricity allows us to dodge those responsibilities with a semantic sidestep.
      If you see my discussion above I am yet to be convinced that this power station will fall into the low emissions category. I will happily accept any evidence (for this particular plant) to the contrary.

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    3. Luke Weston

      Physicist / electronic engineer

      In reply to Adam Hughes

      Although mendacious claims to the contrary are repeated over and over again by devout anti-nuclear power activists, the wealth of credible research everywhere on the subject shows that whole-of-life-cycle greenhouse gas emissions for nuclear power are extremely low, comparable to wind, hydro and geothermal energy. (Solar power is noticeably higher than these but still much better than fossil fuels of course.)

      There's plenty of literature out there on the life-cycle analysis of clean energy technologies, and it is all quite consistent except for the well-known flawed outlier that is Storm van Leeuwen and Smith.

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    1. Luke Weston

      Physicist / electronic engineer

      In reply to José DeSouza

      The headline says "Why Coal and Nuclear (Baseload) Are Not Compatible with a Renewable Future".

      But "A Renewable Future" isn't defined in some technical sense, like scalable, technologically-realistic low-carbon replacement of coal-fired generators, it is defined in terms of the ideology of opposition to nuclear power, opposition to coal and a belief in some metaphysical "goodness" of solar and wind that is not subject to technological limitations. So it's true by definition.

      "Why Coal and Nuclear Are Not Compatible with a Coal and Nuclear Are Bad Ideology".
      I'll call the Swedish Academy of Sciences right away.

      The first rule of tautology club is the first rule of tautology club, right?

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  7. Craig Myatt

    Industrial Designer / R&D

    I don't really think this could ever get up in Australia...Renewables are too easy by comparison, politically and financially.

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  8. David Bindoff

    manager

    There has been discussion above about the lifetime CO2 emissions of nuclear, the design of this reactor would appear to have a far greater CO2 debt that any predecessors.
    http://www.newscientist.com/article/mg22029392.500-how-uks-first-nuclear-reactor-for-25-years-will-work.html#.UmcSNXAbBRQ

    The timeframes for construction seem optimistic, since it is heavier and previous examples in Finland and France have been greatly delayed.

    It seems to me to be very pertinent to know specifically what…

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