The Nuclear Free Local Authorities (NFLA) is alarmed to learn in a new statement by EDF Energy that the cost of the proposed Hinkley Point C plant has now risen a further £2.9 billion and could cost as much as £22.5 billion. (1) In an interview on the BBC ‘Today’ programme this morning, EDF also admitted the cost could go up even more than that, and NFLA have every expectation that would be the case. (2)
This comes at a time of important news on the cost comparison between renewable and nuclear energy, which shows renewables to be the far superior, cheaper, swifter and safer investment.
The UK Government is currently consulting on a new financing model for funding new nuclear reactors, after giving up on any pretence that these can be built without vast public subsidy. As NFLA note in its response to that consultation, the Government calculated in 2008 that the construction cost of building two reactors at Hinkley Point C would be £4 billion. In 2012, EDF, the company leading the consortium to build Hinkley estimated the ‘overnight cost’ would be £12 billion. This increased to £14 billion in 2013, £16 billion in 2015, £18 billion in 2016 and the most recent estimate (June 2018) was for £19.6-20.3 billion. This new estimate for the project now comes in at between £21.5 and £22.5 billion, and that is before much of the more complicated work has even commenced.
NFLA also points out that, in terms of the contract signed between the UK Government and EDF for building the reactors, the commonly quoted additional cost to consumers for Hinkley Point C is £30 billion. However this, oddly, is actually the net present value (discounted) of the total subsidy to Hinkley to be paid by consumers over the 35 years. The actual additional cost to consumers could be as much as £100 billion in today’s money. (3)
Dr David Toke notes that EDF, in its statement issued yesterday, talks about the project being ‘first of a kind’ (in the UK). But the project is not ‘first of a kind’ at all when considering similar designs being implemented in Finland (Olkiluoto) and France (Flamanville), both of which are still not fully operational over a decade later and with costs rising to more than three times their initial estimates. NFLA remain sceptical that Hinkley Point C can be built by 2025 given these Finnish and French examples. (4)
At the same time, last Friday the UK Government announced the successful bids for new offshore wind farms around the British Isles. According to the government, prices for the third round fell by around 30% as compared to the second ‘Contracts for Difference’ round held in 2017, and have fallen by as much as 66% as compared to the first round held in 2015. The lowest price awarded was just £39.65 per megawatt-hour (MWh). This compares to the £92.50 in the Hinkley Point C contract, which was at 2012 prices, so that figure is already considerably higher now. (5)
It does not take an economist to see that new nuclear is not cost competitive with renewables, and never will be. NFLA therefore calls on the UK Government to abandon its consultation on the Revenue Asset Base model for new nuclear, as it will certainly lead to several tens of billions of pounds of public money having to be granted to EDF for Sizewell C, when it is absolutely obvious that renewables would not lead to any such heavy public finance burden.
Instead, the Government should review energy policy and divert resources towards renewable energy, energy efficiency, energy storage and ‘smart energy’ solutions. It should also develop a stronger partnership with local government on decentralised energy. Councils are far more ambitious in their work than central government in tackling the ‘climate emergency’, as the NFLA’s latest assessment on local authority low carbon action quite clearly shows. (6)
UK & Ireland NFLA Steering Committee Chair, Councillor David Blackburn said:
“For the past decade and a half NFLA has been saying that, as the costs of new nuclear will only increase, it compares negatively to the costs of renewable energy, which are rapidly declining due to innovation and new investment. For the cost of Hinkley Point C to jump from £4 billion to £22.5 billion in just over a decade quite clearly proves our case. It really is about time for the UK Government to stop seeing new nuclear as the answer to our low carbon energy needs and transfer resource and commitment to developing the renewable revolution already taking place. It should partner with Councils to deliver more flexible decentralised energy schemes rather than the tired and outdated ‘baseload’ energy model. There simply is not the time or the money to waste on new nuclear.”
Ends – for more information please contact Sean Morris, NFLA Secretary, on 00 44 (0)161 234 3244.
Notes for editors:
(1) BBC, 25th September 2019
(2) BBC Radio 4 Today programme –
https://www.bbc.co.uk/programmes/m0008nwz at 8.41
(3) NFLA New Nuclear Monitor 58, September 2019 –
(4) Dr David Toke’s energy blog, 25th September 2019
(5) Clean Technica, 23rd September 2019
(6) NFLA Policy Briefing 191, 23rd September 2019