Hinkley C is half-dead and on life support

There was a fairly good report and debate on Newsnight about the continuing delays to a final decision by EDF on the proposed Hinkley C nuclear power station in Somerset.


To a certain extent, I am as happy as Jenny Jones at this news. Nuclear power is not commercially viable, and the fact that EDF—even though it is 85% owned by the French Government—think that the uncertainties are so great that going ahead would risk bringing down the whole company is a sober reflection of economic reality.

The problem is that politics, or rather politicians, are involved; and the ones in power haven't quite got the same grip on economic reality. The events of the past year or so should have made it clear to everyone that the Tory Government at Westminster is determined to push ahead with nuclear power at the expense of what they call green crap ... and pig-headed enough to keep throwing money at nuclear until someone is foolish enough to commit to construction.

I don't want to see any new nuclear power stations built in Britain, because Britain can generate more electricity than we need on this island by developing renewables instead. However, if politicians are determined to go ahead with nuclear in spite of it not making commercial sense, it is obviously better for Wales that any nuclear power station that does get built is build somewhere other than in Wales. Paradoxically, the worse news would be for EDF to take the decision not to go ahead with Hinkley C, for it would mean that the government's focus of attention would switch to projects like Wylfa B, and similar ridiculous amounts of money would be thrown at it instead.


The EDF/China deal, if it went ahead as planned, would result in three new nuclear power stations: Hinkley B, Sizewell C and a Chinese-designed reactor at Bradwell. We need to be clear that the Chinese have only agreed to finance the first two in return for getting the third. Building their own reactor in a Western country is what really matters to them. They will therefore put tremendous pressure on the UK and France to keep the deal alive.

So, for me, the best scenario would be for the Hinkley/Sizewell/Bradwell deal to be kept on "life support" for the time being because, while it remains half-alive, there is no way that the UK would commit to building a fourth nuclear power station. We can all see the mess that the Finns are in over Olkiluoto 3, and that the French are in over Flamanville 3. If these two governments have had so much trouble over building just one new nuclear power plant, does anyone in their right mind think the UK would commit to building four of them? Wales is safe for as long as the Hinkley/Sizewell/Bradwell deal is not killed off.

The UK government's decision to rapidly remove subsidies for wind and solar is, of course, a setback ... but only a temporary one. The big picture is that the price of renewable energy is continually coming down, and this will make wind and, especially, solar projects more commercially viable. It's only a question of when, not if. The current low oil and gas prices will almost certainly go back up, probably in two or three years, and when that happens we should expect to see an unstoppable rush towards renewables. At that point neither Chinese money, nor the largesse of a Tory government at the expense of taxpayers and electricity customers, will be able to keep the idea of new nuclear power in the UK alive any longer.

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Anonymous said...

Why is it "OBVIOUSLY better for Wales that any nuclear power station that does get built is build somewhere other than in Wales"?

And what's wrong with "ridiculous amounts of money" being invested in Wales? The more we get, the better it is for us.

MH said...

Leaving aside the possibility of a nuclear accident, a nuclear power station is bad for Wales because it's a financial liability. Nuclear power produces waste which is hazardous for thousands of years, and decommissioning the contaminated power station itself takes in the order of a century or so (and still leaves waste which must be stored somewhere). The question is: Who pays for this?

The idea is that the price which the operating company gets for its electricity includes an amount to be set aside for this. But it clearly doesn't cover this completely, because those costs will continue for centuries. More pertinently, the fundamental idea behind any commercial enterprise is limited liability ... in other words, any company can go bust. There are no prizes for seeing that, once no more money can be made from the nuclear power station when it comes to the end of its working life, and there is nothing left for the company but a liability that will continue for centuries, that company will almost certainly go bust. But the cost of dealing with the nuclear clean up will still be there, and will then have to be paid for by ordinary taxpayers or consumers.

The nightmare situation is that if Wales becomes independent, Welsh taxpayers/consumers will have to pay. If the nuclear power station was just one out of, say, 18 across Englandandwales, then the burden would be fair. But if it's just one, or one of a small handful, then Wales will be paying a disproportionate share.


As for the huge amounts of money, it is only good for us if we get an overall benefit from it. Sure, there will be a short-term benefit during the construction period, and a smaller, medium-term benefit while it is operational. But, after that, all we will have is the continuing long-term liability.

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