Inconvenient financial facts about Britain’s Hinkley Point C nuclear station – cost to cosumers rising to £50 billion?

Times 19th July 2017, The storm surrounding the construction of the Hinkley Point C nuclear plant was set to break out anew today after it emerged last night that the cost to consumers could mushroom to £50 billion.

The new official estimate is more than eight times higher than the £6 billion that the National Audit
Office estimated the plant would cost consumers when ministers first struck a subsidy deal to support it in 2013. The spark that ignited the explosion in the estimate is a decline in electricity prices, which in turn have hugely inflated the subsidies that the project is expected to require.

Under the terms of the deal, which was confirmed, after some delay, last autumn by Theresa May, the nuclear developers EDF, of France, and CGN, of China, will foot the up-front construction cost in return for a guaranteed price of £92.50 for every megawatt- hour of power that the plant generates for 35 years.

If wholesale prices are below that level, the difference will be subsidised by consumers through levies on their energy bills. Wholesale prices and projections of future prices have both fallen significantly
since 2013 as the cost of fossil fuels used in conventional power generation has plunged. This has increased the estimates of the subsidy payments that will be required for Hinkley Point, making the project appear increasingly poor value. Government figures show that, as of September last year, the lifetime costs of Hinkley Point C were estimated at £49.9 billion. That compares with an estimate of £36.9 billion in 2015 and £14.5 billion in 2014. https://www.thetimes.co.uk/edition/business/hinkley-point-cost-could-soar-to-50bn-6brnph9q7

July 19, 2017 - Posted by Christina Macpherson | business and costs, politics, UK

2 Comments »

“The new official estimate is more than eight times higher than the £6 billion that the National Audit”
This a pretty missleading statement. The 6 billion pounds cover the cost of the design and construction of the plant. the additionnal 30-some billion has nothing to do with construction costs but the compiled surchange on british electricity bills over the 60 year lifecycle of the plant… but nuclear power or not, any new power production plant (LNG, wind, solar, coal) will obviously end up impacting the end consummer. the money to build these things has to come from somewhere. I would even add that nuclear subsidies are less that half of those of renewables … since 2009… so if it’s the money you’re so worried about the sheer numbers should push you to question why we are artificailly creating a massive ENR bubble.

I’m not a pro-nuclear guy, but I think if we’re to have an intelligent debate we should start being a bit more honest about the numbers we through out there. The person who wrote this article clearly knew that they were mixing apples and oranges and just hoping that the utter confusion they were contributing to would spark some sort of anti-nuc sentiment I guess… That’s dumb on many levels and dangerous and many others. If you are so certain of the righteouness of your cause you shouldn’t have to lie and manipulate the numbers to get the message across.

Comment by Eric Dole | July 19, 2017 | Reply
- “If you are so certain of the righteouness of your cause you shouldn’t have to lie and manipulate the numbers to get the message across.”
  
  Well, I didn’t write the article – it came straight from The Times UK – hardly a radical anti-nuclear agency. I doubt very much that they would “lie and manipulate” in order to further their supposed anti-nuclear agenda.
  
  You should take up your complaint with The Times, not me. I am no energy expert, but it stands to reason, anyway, that renewable energy is going to be much cheaper, over time, seeing that (a) the fuel is free, (b) it doesn’t require massive security, and enormously expensive decommissioning eventually.
  
  You say you’re “no a pro-nuclear guy”, but you sound just like one of their shills.
  
  Comment by Christina MacPherson | July 19, 2017 | Reply