The UK & Ireland Nuclear Free Local Authorities (NFLA) note with little surprise the announcement from EDF Energy that the costs of building the Hinkley Point C has gone up again, now to an eye-watering £23 billion. It also comes as the Japanese nuclear utility Hitachi formally withdraws its interest from the possible development of the Wylfa B site, criticising the UK Government’s lack of support in its decision.
EDF noted that the costs at Hinkley Point C have gone up due to the problems associated in construction projects from the Covid-19 pandemic. Such delays mean that the operational opening date for the project has now also been put back to 2026.
EDF, which is financing the construction of Hinkley Point C with its junior partner CGN of China, said it is expecting the project to now cost up to £23bn compared with a previous estimate in 2019 of a maximum amount of £22.5bn. However, as the Financial Times notes, EDF quotes costs in 2015 prices in order to maintain consistency for the markets, so the real bill is likely to be higher after accounting for rises in inflation. (2)
It is important to remember that this figure is much, much higher than EDF claimed when this project was first publicised in 2008. At that point EDF claimed Hinkley Point C would be delivered by Christmas 2017, that it was essential to ‘keep the lights on’ and to mitigate climate change. As such, it is going to be at least 9 years later than originally planned, the lights have stayed on due to new renewables coming on to the grid and such technology is providing the positive impact on reducing climate emissions.
NFLA also note a recent report by Professor Stephen Thomas and Alison Downes which notes the real problems EDF are finding to raise the capital to fund this entire project. Is it ‘too big to fail’? (3) In the same vein, does the UK Government have any contingencies in place if the project cannot be delivered should these huge levels of finance not be found?
The day after EDF’s decision came another blow to the new nuclear ‘renaissance’ as Hitachi finally gave up on developing a large nuclear reactor at the Wylfa site in Anglesey. Hitachi had opened talks with a number of other utilities about taking on the site but has concluded there are no real prospects of success. In its letter to the UK Government it was critical with it in not being provided with adequate support in finding the funds for developing a new nuclear reactor. (4)
The UK Government, the nuclear industry and its supporters in the media continue to insist new nuclear is the answer to the UK’s zero carbon challenge. This is despite the NFLA and others having pointed out a growing number of expert scenarios that show a 100% renewable energy system, backed up by battery storage, smart energy and energy efficiency, is entirely possible if the political will to drive it is there. (5)
Indeed, a new report from European energy analytics firms Ember Climate and Agora Enegiewende has confirmed that in Europe renewable energy has risen to 38% of the continent’s total electricity in 2020 (compared to 34.6% in 2019). Renewable energy generated more than fossil fuels for all of Europe for the first time in 2020, and that same milestone was hit for Germany, Spain and the UK for the first time as well. (6) It clearly is the zero-carbon technology of this decade and onwards.
Given that renewable technologies are considerably cheaper than new nuclear, and the financial challenges of the pandemic are obvious to all, NFLA believe there needs to be an urgent rethink over the proposed ‘benefits’ of building large and highly expensive new nuclear power stations. In this, there is no justification for building new reactors at Sizewell C or Bradwell B. Moving towards Small Modular Nuclear Reactors (SMRs) is no quick, easy or particularly cheaper answer either. (7) Questions need to be also asked whether the UK Government’s proposed Revenue Asset Base model for funding such projects would be an effective and ‘low risk’ use of public money given the continuing increase to the construction costs of large nuclear reactors. Can large amounts of Government finance come forward given the huge public debt the UK has from the Covid-19 pandemic?
NFLA Steering Committee Chair, Councillor David Blackburn said:
“NFLA is not surprised by yet another large increase in the cost of building Hinkley Point C, nor the inevitable decision by Hitachi to give up on new nuclear at Wylfa. Increasing costs has been one of the most reliable certainties that occurs in the new nuclear debate and makes it so difficult for utilities to deliver reactors. Conversely, it is renewable energy that is growing like never before due to much lower construction costs. Linking such technology with energy efficiency, energy storage and smart energy schemes can deliver an efficient and 100% zero carbon system. It is time the UK Government took account of these clear changes in the energy market and changed course.”
For more information please contact Sean Morris, NFLA Secretary, on 00 44 (0)7771 930196.
Notes to Editors:
(1) Bloomberg, 27th January 2021
(2) Financial Times, 27th January 2021
(3) Stephen Thomas and Alison Downes, Financing Hinkley Point C, August 2020
(4) BBC, 27th January 2021
(5) NFLA report on 100% renewables, 12th November 2020
(6) Renew Economy, 26th January 2021
(7) NCG / NFLA report – Prospects for Small Modular Reactors in the UK and Worldwide, July 2019