After years of negotiations, posturing and pencil-sucking, plus a final review by our new Prime Minister, the construction of a new nuclear power plant at Hinkley Point has been approved. I think that was wrong.
My reasons have little to do with the major role overseas interests will play in developing the UK’s first new nuclear station in over two decades. French atomic giant EDF is to build the £18bn Somerset plant, ending up as the two-thirds majority shareholder. And the Chinese government will provide the other third of the cash. I have no particular problem with that.
I’m not too concerned, either, by the 300,000-strong petition delivered to No 10 by Greenpeace, calling for Hinkley to be scrapped, while dissing atomic energy in general. It seems to me that nuclear power, on the contrary, is vital to the UK’s energy security.
Providing constant “baseload” electricity in a way renewables don’t, UK atomic stations meet around a fifth of our energy needs – and will remain important, not least as hydrocarbons deplete. Having been pioneers in the civilian use of nuclear, though, the UK’s plants are now on their last legs, and are all due to close by 2030.
The problem with Hinkley is that it’s a ghastly deal for taxpayers.
Ministers and officials have guaranteed EDF a “strike price” of £92.50 per megawatt hour of electricity generated from 2025, when the plant is due to open, until 2060. That’s more than twice the current wholesale market rate of just below £39.
Locking us into such costly energy for 35 years is madness. How can anyone know the electricity price three years hence, let alone in three decades’ time?
Since this astonishing deal was struck in 2013, technology related to power storage and “smart grid” localised generation has leapt forward. Energy efficiency has also improved, with further gains to come.
Having put downward pressure on prices over the past three years, such advances will certainly reap future savings as well. Yet UK taxpayers will be on the hook to pay £92.50 per megawatt hour – an eye-watering amount which, in addition, is index-linked to inflation.
To make matters worse, the proposed Hinkley Point reactor technology is dubious. New plants where EDF has used it before, in Finland and France, remain unopened, years behind schedule and subject to massive additional costs. No one is saying that the UK’s energy conundrum is easy, but Hinkley isn’t the answer.
While the newly secured “safeguards” regarding China’s role are important, Theresa May should have used her last-minute review to insist, instead, on a significant downward revision to the strike price. This Hinkley deal really does seem to be terrible value for money. And you don’t need to be a Greenpeace campaigner to wonder how many civil servants and advisors involved in pushing it through will end up with lucrative cushy jobs in the nuclear industry.