The Nuclear Free Local Authorities (NFLA) welcomes the decision of UK Energy Minister Greg Barker to review the contract with EDF Energy before committing to the development of a new nuclear reactor at the Hinkley Point site in Somerset. For NFLA this valuable, though short period of time, allows the UK Government some breathing space to rethink its wider policy on nuclear power.
Last Thursday, after a protracted board meeting and the resignation of a board member, EDF Energy narrowly decided by 10 – 7 to make its ‘final investment decision’ and approve the Hinkley Point C nuclear power plant. Before the champagne corks could be popped though, the Government decided that it would like to review the project until the early autumn. (1)
NFLA does not think at present there has been some kind of ‘Damascene conversion’ from the Government on this project. They had expected the EDF board to make its final investment decision in September (the earlier decision may have been due to concerns that have taken place with the ‘Brexit’ EU decision and a new Prime Minister) and it looks like the new Prime Minister Theresa May wants to look at the detail of the ‘strike price’ deal between the Government and EDF before making the final decision.
However, that time could be used wisely and the Government should carefully consider the extensive chorus of criticism that has arisen from across the political spectrum and in both the general, financial and the specialist media over the costs and the risks of what would be the most expensive nuclear power station ever built. It is interesting to note that EDF’s share price rose 11% because the Government have called the review – it is likely it would have fallen much more should EDF go ahead with it and the contracts were signed.
Newspapers as divergent as The Sun, The Times, The Telegraph, the Financial Times and The Guardian have criticised the costs of the deal and have argued it should be cancelled. NFLA agree with them but would go much further – it is high time that the comparative costs between nuclear and renewables (linked with smart energy solutions) is considered in this review. The benefits of decentralised and community energy also needs to be thoroughly considered by government.
There are other key issues to the Hinkley deal that the Government must include in this review:
- The Government needs to publish what the scope of the review is. Is it just a technical consideration of the contracts or something much more fundamental (as it should be)?
- The media has concentrated on the Chinese involvement in the deal and the national security sensitivities of it getting involved in the UK nuclear market, particularly given previous public comments made by the Prime Minister’s Chief of Staff. If that is the case, why is it being considered at this late hour in the deal?
- The financial weakness of EDF really should be the focal part of the review. Given the collapse of Areva NP and its forced merger with EDF, the resignation of EDF’s Finance Director over the company’s financial vulnerability in relation to Hinkley Point, and the vociferous comments of French trade unions working in the nuclear industry, there is much evidence that the project could literally bring the company down. This needs to be thoroughly considered.
- The value for money to the British taxpayer should also be considered. A recent report from the National Audit Office (NAO) estimates that energy consumers could end up paying £29.7bn in top-up payments rather than £6.1bn estimated in October 2013 when the strike-price for the 35-year contract was originally agreed. The increase is due to the fact that wholesale energy prices are now expected to be much lower. (2) The Government itself estimated this figure could be even higher at £37bn. (3) Consumers should not have to take on such a financial burden.
- The Austrian and Luxembourg Governments have confirmed they will continue to pursue their legal challenge against the European Commission over the Hinkley strike price deal. (4)
- The United Nations Espoo Convention Compliance Committee has just closed its investigation in compliance by the United Kingdom in the case of Hinkley Point C and found it to be not in compliance with the Convention. This Convention dictates that neighbouring member states should be adequately consulted on projects with an environmental impact. The Committee has recommended that the UK should discuss what to do now with potentially affected Parties and that for all future nuclear power construction projects it will have to notify other countries. This now urgently needs to be part of the Government’s review of the Hinkley project. (5)
These are just some of the issues within this complicated project. As NFLA has consistently noted, EDF has failed to develop this type of reactor design anywhere else in the world and it has many safety and design issues that have simply not been resolved. It would be sheer folly to go ahead with it in September. There are much better non-nuclear alternatives, and government policy needs to be recalibrated to consider them.
NFLA Chair Councillor Ernie Galsworthy said:
I am heartened at this final hour that the Government has decided on a review of the Hinkley Point contract before going ahead with it. Such a review should not take just a few weeks, but needs to be a complete and thorough analysis of whether new nuclear can be built at a cost comparative price to renewables. Smart energy solutions are showing highly impressive results. Offshore wind is now coming in at costs significantly cheaper than new nuclear, with solar and other renewables also much lower. Let’s move away from an outdated technology and embrace such new solutions. Hinkley C should not go ahead for many reasons. Now is the time for the Prime Minister to be brave and courageous and move UK energy policy to embrace sustainable, clean and jobs-rich alternatives.”
For more information please contact Sean Morris, NFLA Secretary, on 0161 234 3244.
Notes for editors:
(1) See for example – https://www.theguardian.com/business/energy-industry
(3) Business Green, 8th July 2016 http://www.businessgreen.com/bg/news/2464269/hinkley-cost-estimate-rises-to-gbp37bn
(4) Power Engineering International, 31st July 2016 http://www.powerengineeringint.com/articles/2016/07/legal-objections-to-decision-facilitating-hinkley-point-c-remain.html
(5) UN Espoo Convention Compliance Committee, 1st August 2016 http://www.unece.org/environmental-policy/conventions/environmental-assessment/areas-of-work/review-of-compliance/committee-initiative/eiaicci5-united-kingdom.html