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UK government admits the costs of Hinkley nuclear deal – gas would be cheaper

text politicsflag-UKHinkley Point nuclear deal signed as Government admits gas would be cheaper, Telegraph,  energy editor 29 SEPTEMBER 2016 

The Hinkley Point C nuclear plant will saddle UK consumers with higher energy bills than building gas power stations, the Government has admitted, as it signed a legally-binding contract to subsidise the £18bn project.

An official assessment claimed the Franco-Chinese project to build Britain’s first nuclear plant in a generation represented “value for money”, despite being more expensive than gas, because it would help meet climate change targets.

A series of deals signed between the Government, France’s EDF and China’s state nuclear firm CGN at a ceremony in London marked the final go-ahead for the Somerset power plant and also fired the formal starting gun on Chinese efforts to build their own reactor in Essex………

Earlier this month the Government opted to press ahead with the project with some new security safeguards but leaving the controversial subsidy deal underpinning Hinkley unchanged.

Under a deal first agreed in 2013 Hinkley will be paid a fixed price of £92.50/MWh for the power it produces for 35 years, funded through levies on energy bills. The National Audit Office has said it could cost up to £30bn in subsidies.

Among hundreds of pages of documents issued on Thursday afternoon – some heavily redacted – ministers faced a series of questions over a cursory three-page assessment concluding that the deal would add £12 to energy bills in 2030 but was “value for money”.

The assessment said Hinkley was “cost-competitive to other options for delivering power” despite its own assessment that the “comparable cost” of new gas in the 2020s could be as low as £45/MWh, solar as low as £65/MWh and onshore wind as low as £49/MWh.

If Hinkley was delayed by three years and gas plants built instead then by 2030 the UK would be £3.2bn better off and energy bills would be “£6 cheaper per year”, it concluded……..

John Sauven, executive director of Greenpeace, accused the Government of obfuscation and providing “no evidence anywhere in the documents to back up their assumptions”.

“The numbers speak for themselves. In the unlikely event Hinkley is working sometime in the second half of the next decade, renewable energy will be much cheaper, yet British consumers will still be forced to pay over the odds for nuclear power,” he said.

Another document underlined the lasting impact the decision will have on UK energy policy for more than a century to come, forecasting that the spent fuel for the plant would not be disposed of until the year 2138.

EDF Energy said Hinkley would “kickstart Britain’s nuclear revival” and that it had “been shown to offer consumers value for money”.

The Government said the signing of the deal marked “a significant step forward for a new era of nuclear power in the UK”. http://www.telegraph.co.uk/business/2016/09/29/hinkley-point-nuclear-plant-gets-final-go-ahead-as-government-si/

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September 30, 2016 - Posted by | business and costs, politics, UK

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