What 3.2GW for £24.5 billion means for Britain
French state owned EDF Energy is still negotiating with our government about the level of subsidy that will be needed in order to build the two new EPR water pressure reactors at Hinkley Point and another two at Sizewell in Suffolk. The EPR is new third generation reactor that has been developed by Areva, EDF Energy and Siemens. There are a number of these reactors being built in France and China, however no single reactor is currently operational. Not only has this reactor not established a track record for performance, it’s most notorious failure is still going on in Olkiluoto, Finland where construction began in 2005 and ten years later the power plant has still not been completed at a cost of billions in overruns to their taxpayers. The capacity of the Olkiluoto EPR plant is half of the generation capacity of the planned site at Hinkley Point, in Somerset.
Considering that most investors won’t put their money into unproven technologies, One has to wonder who does think that this kind of investment is sensible for Britain?
The plant at Hinkley Point was first projected to cost £16 billion. Now the price has been set at £24.5 billion, including the millions of finance that will be needed for neighbouring communities to keep them sweet so they agree to play host to such dangerous radioactive toxins in their backyard in what is otherwise a pristine area of natural beauty in Somerset. This government has just overseen the first round of contracts under their new Contracts for Difference. One of the envisioned contracts for this new program involves the new nuclear power station at Hinkley Point. The contract guarantees a strike price of up to £92.50 per MWh for the electricity generated by the plant. This guarantee appeases the shareholders, of which 40% will be Chinese and the rest French, who have no special interest in the well being of the British people.
In order to secure the construction of this nuclear power plant, the UK consumer is being forced to accept a deal where the price of electricity generated will be fixed at twice the current price, applying the export tariff for solar photovoltaics (PV) of 4.5p per kWh as our measurement. BHESCo believes that we should be concerned that this government is entering into contracts which will insure that energy prices will increase. Our argument is that EDF will not be able to compete if its prices have to be that high to support its fleet of new nuclear power stations. We have more confidence that the renewable electricity generated from the fleet of offshore windfarms will be half that price. So, if EDF is to offer its price on the market at twice the price, no one would buy it, except the taxpayer. We are concerned that the costs of nuclear power will most likely be spread to all of our purses, including our most vulnerable people.
Hinkley Point is projected to produce sufficient electricity to power 5 million homes, year in, year out, without breakdowns in performance for the next 25 years. This, we know from experience with the current nuclear power stations, is not true. They are periodically taken out of commission for maintenance that can last for months. The Dogger Bank wind farm in Yorkshire that was approved last February, will be one of the largest offshore wind farm in the world, generating enough electricity to power 2 million homes. The costs to the ratepayer after the plant is built are minimal and predictable, including maintenance and a small subsidy. Compare that to a nuclear power plant where the costs are spiraling ever higher. Nuclear power plants must be decommissioned at the end of their lives, which takes 100 years, a cost traditionally financed by the taxpayer. Nuclear waste must be stored. Then, it must be transported securely to a processing plant where it is then put into canisters for storage over the next 10,000 years, although there is no long term solution for storing highly toxic radioactive waste. We estimate that at least 50% of the budget for the Department of Energy and Climate Change is attributed to the management of these types of issues around our nuclear legacy. We cannot cut this budget, it would pose too much of a national security threat. So we cut other public services.
Does this make any sense to you?