Not such a bad decision for Wales

I thought I'd break a long period with no blogging to talk about the new UK government's decision to go ahead with Hinkley Point C.

As I've said before, this is not such a bad decision for Wales. Let me explain what I mean.


It should be clear from Theresa May's decision that the UK government is in a state of paralysis over energy policy. They made the decision some time ago that new nuclear power stations were necessary and—even though all the evidence points to the fact that the price of nuclear keeps going up and up, while the price of renewables keeps falling—they think that the need for them to save face is more important than the need for the rest of us to get value for money. After all, they tell themselves, it is not the UK government that will have to pay; their intention has always been for the costs to be met by ordinary citizens through our electricity bills. A ploy which, hardly by co-incidence, means the poor will pay proportionately more than the rich. Typically Tory.

With this mindset set in stone, it was clear to me that the Tories would be bound to give the go-ahead to nuclear power in some form or other. Hinkley Point C is a terrible deal, not least because it is not just a commitment to one power station, but a commitment to two more at Sizewell and Bradwell. So if the Hinkley deal had not been approved, the UK government would now be actively looking to build an alternative somewhere else, and that alternative would in all probability have been Wylfa B.

It's not that Wylfa B makes any more sense than Hinkley Point C. In fact it makes less sense, because if Horizon had been able to produce nuclear power more cheaply than EDF they would surely have made the offer of a lower strike price as a way of killing-off Hinkley in favour of their own project. Horizon haven't even been able to pretend that their sums can work. They have been biding their time, looking busy but in fact doing very little, hoping against hope that Hinkley would fall through so that the UK government would be left with no choice but to pay them a yet higher strike price.


So the UK is now stuck with Hinkey for the foreseeable future. I am quite sure that Hinkley will prove to be as problematic as Olkiluoto and Flamanville. It will cost more and take longer to build than EDF anticipate. But whether or not it is ever completed will depend on the complexion of government in power when those problems become too obvious to ignore. Say in five to ten years.

If the Tories are still in power, they will probably refuse any additional funding to bail it out. Hinckley will be left as an enormous uncompleted white elephant, killed off before producing a watt of electricity by the simple economics of renewables becoming cheaper and the inevitable development of storage technologies and the smart grid. Capitalistic ruthlessness is the hallmark of all Tories.

If Labour are in power, everything will depend on which faction wins its internal battles over the next few years. If, for want of a better description, the Blairite tendency eventually wins, then there is a very real danger that they will pour good taxpayers' money after bad, and bail out Hinkley no matter what the cost. As always, they will justify doing so on the grounds of jobs. Les grands projets are a hallmark of the left, with vanity winning out over sanity. The only hope of sanity prevailing is if the Corbyn/McDonnell faction wins. Reading this document shows that Labour at least have the potential to become a credible government with workable environment and energy policies.


Which one of these three scenarios comes to pass doesn't much matter. My point is that although this current UK government has shown itself to be stupid enough to give the go-ahead to a few new nuclear power stations, no UK government would ever be stupid enough to commit to building four of the things. They will wait to see how the first one, or two, or three new stations work out, and only commit to more if these first three work out well ... which, of course, they won't.

Thankfully for Wales, this decision means that Hinkley, Sizewell and Bradwell remain firmly ahead of Wylfa in the queue, which makes it all the more likely that Wylfa B will never be built.

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Anonymous said...

And I do so hope that you are right!

Anonymous said...

Good to see you back blogging Michael. The Welsh blogosophere needs you in thispost-Brexit era. This is an excellent analysis.

Furthermore, this new "condition" that May has now put in place that the government will pay for a stake in any future nuclear plants makes any Wylfa B even less likely in a future where public spending is likely to be more constrained in the wake of Brexit.

There was an article in the ST at the weekend saying that the costs of battery storage for solar/wind power have come down dramatically of late and that capacity in homes and workplaces will soon equate to 8 gigawatts of power- more than double the power that will ever be produced at Hinkley. Storage has always been the achilles heel of the renewables industry, but now that problem seems to be resolved, it really is all systems go now.

This is a complete no-brainer.

i) Wales doesn't need this Wylfa B monstrosity.
ii) We have the natural resources in our country to create all our power through renewables.
iii) The new technologies coming on stream all point to the development of the smart grid.

If only the ostriches leading Cyngor Sir Ynys Mon could smell the coffee?! Where is their Plan B????

Cymru Rydd

Anonymous said...

Very interesting interpretation.

Phil Davies

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