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Renewable energy has priced out Hinkley nuclear power for Britain

Hinkley nuclear power is being priced out by renewables, Nils Pratley
The UK should concentrate on wind- and gas-fired stations, and involve nuclear only if it can vaguely compete on price  Reuters  12 September 2017  

Hinkley Point C nuclear power station was conceived in the days when offshore wind cost £150 per megawatt hour and a few misguided souls, some of them government ministers, thought a barrel of oil was heading towards $200.

Successive governments swallowed the line that Hinkley represented a plausible answer to the UK’s threefold energy conundrum – keeping the lights on, reducing carbon emissions and producing the juice at affordable prices for consumers and business.

Hinkley still scores on reliability and low carbon (if one ignores the effect of spoiling the Somerset countryside with so much concrete), but the extent to which its costs are obscene is now plainer than ever. In Monday’s capacity auction, two big offshore wind farms came in at £57.50 per megawatt hour and a third at £74.75. These “strike prices” – a guaranteed price for the electricity generated – are expressed in 2012 figures, as is Hinkley’s £92.50 so the comparison is fair.

The dramatic improvement in offshore wind’s competitiveness is easy to explain because it was predicted. The turbines have become bigger and more efficient, installation costs have fallen and operators are able to use existing infrastructure. Even the post-Brexit fall in sterling has not altered the script because more of the equipment is produced in the UK these days.

By contrast, nuclear – a technology that has been around for half a century – seems to only become more expensive in a world of tighter safety regulation. Hinkley Point’s construction tripled between conception and contract, remember.

As for the argument that we must pay up for reliable baseload supplies, there ought to be limits to how far it can be pushed. A nuclear premium of some level might be justified, but Hinkley lives in a financial world of its own, even before battery technology (possibly) shifts the economics further in favour of renewables. A credible energy strategy would concentrate on wind- and gas-fired stations, and invite nuclear to the game only if it can vaguely compete on price.

The government should draw the obvious conclusion from Monday’s successful auction. One Hinkley is bad enough; a series of follow-on white elephants would be a disgrace.


September 13, 2017 - Posted by | renewable, UK

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