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Doubts raised over UK Hinkley Point C nuclear plans
- 9 years ago (2015-08-11)
- David Flin
Analysts and industry insiders have raised fresh doubts about a £24.5 billion plan by the UK Government to build the first of several new nuclear plants, with one saying that the project will be an “expensive mistake”.
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Paul Massara, Chief Executive of RWE Npower criticised the Hinkley Point C project, which is being implemented by RWE Npower’s French competitor EDF, with financial backing from the UK Government and China. Massara said that: “Big central planning projects are likely to be the wrong answer to energy needs in the 21st century, at a time when demand is falling and the cost of producing renewable energy is falling.”
Some analysts are criticising the value of the project. Peter Atherton, Energy Analyst at the investment bank Jeffries, said that for the same price as Hinkley Point C, which will have a capacity of 3200 MW, almost 50,000 MW of gas-fired capacity could be built, enough to “effectively replace the entire thermal generation fleet in the UK”
A report from energy analysts at HSBC says that the future for the plant is “bleak”, and that there is “ample reason for the UK government to delay or cancel the project”. The report says that demand is falling at 1-2 per cent per year, and there has been a significant increase in import capacity from Europe. This could drive wholesale electricity prices from levels that are already just a third of what EDF will be paid under an inflation-linked price guarantee.
EDF has defended the project. It said that nuclear power gives “reliable baseload power at the same time as helping Britain meets its carbon emissions targets”. It said that the price is competitive when the cost of back-up sources needed alongside renewables are included in calculations. It also dismissed the idea of increasing imports of electricity, citing a government target to improve energy security.
The UK Treasury is said to be delaying final approval for the scheme, but it is believed to be broadly in support of the scheme, and a deal is likely to be signed when Xi Jinping, China’s President, visits Britain in October.