Bloomberg Finance gives 5 good reasons not to build Hinkley nuclear station

FIVE REASONS NOT TO BUILD HINKLEY [Excellent graphs] Bloomberg Finance http://about.bnef.com/landing-pages/five-reasons-build-hinkley/ The endgame for the UK’s new reactor project at Hinkley Point is nearing. A Chinese state visit to the UK in October may be the make-or-break point for the project to get the go-ahead. As that moment approaches, we give five reasons not to build the plant. This is an excerpt from our EU Power Weekly, which is available to our BNEF EMEA and BNEF All clients.

Last week, French energy giant EDF announced delays to two key new reactor projects. Firstly, Flamanville 3 in France will only come online in 2018, six years behind the initial plan and three times over budget. Also, Hinkley Point C in the UK will not be completed by 2023 due to delays in reaching a final investment decision. This adds to the uncertainty around the 3.2GW reactor project. Here are five reasons not to build Hinkley.

It is extremely difficult to build
Hinkley C uses Areva’s troubled EPR (European Pressurised Reactor) technology. All current EPR plants under construction are suffering from severe delays, and there is are substantial concerns about the integrity of some of the reactor vessels.
It is very expensive
Carrying an all-in financing cost of GBP 24.5bn, Hinkley Point C is the most expensive new reactor project around. On a GW basis, it is even more expensive than fellow EPR projects Flamanville and Olkiluoto, which are both multiple times over budget. (good graph)
It may not be necessary

In our view, UK power consumption is in long-term decline. Combined with continued growth of wind and solar capacity and interconnectors to the European mainland, the remaining market might be too small for a mammoth plant such as Hinkley to make sense.
GB annual power consumption and renewable output, 2015-2030 (TWh)
Hinkley won’t play nice with wind and solar
Also, Hinkley might not help to integrate variable wind and solar. Firstly, the massive 3.2GW plant will not help relieve increasingly apparent constraints in the distribution grid. Secondly, it might not be flexible enough to respond to fluctuations in solar and wind output: in sunny and windy days, Hinkley would need to reduce its output significantly, a feature it is not designed for. Other technologies such as small gas-fired peakers might be better suited — read more about them here, or deploying small, more flexible modular reactors (SMRs) that should be available for commercial deployment by 2022-24.
It is a cost for future generations
Hinkley will be costly to decommission, even if these costs will only arise in the second half of this century. The decommissioning cost of San Onofre, a 2.3 GW nuclear plant in California, is estimated at $4.4bn (an unusually high cost given its location, other small reactors decommissioning costs are closer to $1bn). For comparison: cleaning up one MW of San Onofre costs as much as a MW of onshore wind. (Also on decommissioning: the German government is trying to ensure German utilities are held liable for the cost of cleaning up their old reactors).