Almost a decade after it was first mooted, the proposed nuclear power plant at Hinkley Point is already looking like an anachronism.
Conceived at a time when nuclear seemed like the only route to a sustainable low carbon energy mix, Hinkley Point promised to “provide electricity for Britons to cook their Christmas turkeys in 2017”. Now, in mid-2016, construction hasn’t even begun and it looks increasingly unlikely that the plant will be operational until the latter half of the next decade.
In the time since Hinkley Point C’s inception in 2007 the energy market has changed drastically; renewable energies such as wind and solar are increasingly capable of providing a high proportion of the UK’s energy needs at increasingly low prices. The electricity gap that seemed insurmountable without large baseload capacity in 2007 now seems manageable in the short term with smaller-scale gas-fired power stations, which, unlike nuclear power, can be switched on and off depending on need. In the longer term, developments in home and grid-scale battery storage promise eventually to overcome the intermittent nature of solar and wind energy generation, negating the need for large-scale baseload capacity.
In addition to its questionable place in the future of the UK’s energy mix, there are also concerns about the project itself. There are currently no reactors of the type proposed for Hinkley Point operational anywhere in the world. All similar projects have been beset by long delays and additional costs, raising questions about Hinkley’s viability and value for money. This problem is exacerbated by the strike price for the plant’s energy output agreed by the Government: £92.50 per kilowatt hour for 35 years, rising with inflation. This is double the wholesale cost of energy at the moment and, in the context of lower projections for energy prices since the deal, this will result in total lifetime subsidies in excess of £30bn.
Given that the Hinkley Point nuclear power plant purports to solve a problem that will be largely irrelevant by the time it is operational, all at staggering expense to the tax payer, it is unsurprising that Theresa May called for a review of the project as one of her first acts as Prime Minister.
However, after two months’ of prevarication May has now given Hinkley Point the go-ahead.
Hinkley Point has become more than an energy market solution. While Hinkley is undoubtedly an anachronism, it is potentially a very lucrative anachronism – specifically for the two companies behind the project: the largely French state-owned EDF and the Chinese backed CGN. EDF has been struggling in its home market of France as deregulation of the energy market has eaten into its profit margins and needs Hinkley Point to secure its future. CGN has been promised the opportunity to build a Chinese designed reactor in Bradwell in Essex as part of its agreement to provide 30% of the Hinkley Point funding, giving the company the chance to increase its stake in the UK energy market.
Both companies and their respective governments have a lot to gain from the Hinkley Point project. In the context of the Brexit decision, Theresa May cannot in good conscience turn down the opportunity to receive foreign investment, particularly from China who will presumably play an important role in Britain’s pivot away from Europe.
Having voted to “take back control”, it seems that the UK will have to accept increasing foreign control of its domestic energy market.