Sunset over Hinkley Point. Photo: Joe Dunckley via Flickr (CC BY-NC-SA 2.0).
The end is nigh: last rites for Hinkley C
11th March 2015
The Hinkley Point C nuclear power plant never made sense, writes Jonathon Porritt, but as legal challenges gather, finance fails to materialize, the cost of renewable energy keeps on falling, and the 'dead duck' EPR design is prepared for burial, even nuclear fanatics are turning against the doomed project.
The costs of solar and wind continue to fall, year on year, with every indication that there's a further 40% reduction to come over the next few years.
I've always said that the two proposed new reactors at Hinkley Point would never get built. Now I'm not just saying it: I'm absolutely convinced that they'll never get built.
A couple of weeks ago, EdF formally confirmed that no decision would be taken on Hinkley Point before the General Election, and probably not before the end of the year.
The reason it gave was that: "We are in the final phase of negotiations, but that phase can take a considerable amount of time, depending on the number of problems left to resolve."
And that list of problems is daunting. First, it needs to be able to sign final deals with co-investors, including the Chinese, who are beginning to cut up rough. Then it needs final confirmation from the European Commission and the UK Government for a whole load of issues regarding the waste transfer contract.
It also needs to finalise a £10bn loan guarantee from the Treasury. And, despite months of discussions, it needs to conclude negotiations with the UK Government regarding the subsidy contract.
Legal challenges loom large
You'll notice that this list does not include any delays that may be caused by the Austrian Government challenging the EU's decision to approve as 'legal' (within the EU's state aid rules) the billions of pounds of subsidy that the UK Government will pump into the project.
EdF doesn't talk about that, as it still hopes that the Austrians will be 'persuaded' by the UK Government to withdraw its challenge. And the UK Government is certainly intent on doing exactly that!
Over the last few months, details have been trickling out about the retaliatory measures UK Ministers are now threatening in a demonstration of state bullying that beggars belief. A leaked memo showed UK ministers asserting that "the UK will take every opportunity to sue or damage Austria in the future."
Which shows just how desperate the Coalition Government has become, having put all its notionally 'low carbon' eggs in the nuclear basket - a decision that has forced ministers to go to extraordinary lengths to get the Hinkley Point project over the line.
UK Government bending over backwards ... to no avail
Influential commentator Dr Philip Johnstone, Research Fellow at the Science Policy Research Unit, put it as follows: "Every wish of the nuclear industry has been granted by the UK Government. The British planning system has been 'streamlined', with nuclear a key inspiration of the need to speed things up.
"The Government has created one of the best institutional contexts in the world for developing nuclear, with a new Office for Nuclear Regulation and the Office for Nuclear Development, and has ensured that nuclear regulators are equipped to pre-license designs for new build.
"As well as this, a strategic siting assessment and environmental assessment were carried out, further 'streamlining' the process of new nuclear construction. Electricity Market Reform has been brought in, where, despite being a mature technology, nuclear was granted Contracts for Difference at double the current market rate for the next 35 years."
But none of that cuts much ice with the Austrians, and if their challenge proceeds, nobody quite knows how long a delay that might entail. It will certainly be years, not months.
And it just got worse for the Coalition Government. We heard last week that EdF is now going to have to deal with another legal challenge - this one from a German energy Co-operative (a very successful enterprise, founded by Greenpeace 15 years ago) on the grounds that the EU's decision self-evidently distorts competition.
Greenpeace Energy is also calling on the German Government to join Austria in its formal complaint, but that's still unlikely.
The nuclear dream crashes into harsh realities
But you know what - regardless of what happens with those legal challenges, it looks like the beginning of the end for Hinkley anyway. And here's why:
- The cost of the Hinkley Point project has gone up and up over the last two years, and shows little indication of stabilising where it now is;
- The calamitous failure of EdF (and its partner Areva) to deliver the first two EPR projects at Olkiluoto in Finland and Flamanville in France has dragged on and on;
- The two Chinese co-investors (the China National Nuclear Corporation and China General Nuclear Power) have got more and more leery about the EPR reactor design;
- The French Government has become more and more outspoken about its reluctance to go on bailing out either EdF or Areva, as their balance sheets go from bad to worse;
- Areva is now in such a bad state (with a €4.8bn loss in 2014) that it looks as if it might have to withdraw as a co-investor in the Hinkley project - a state of affairs pretty much confirmed by EdF's CEO last week;
- Worse yet, Areva has announced that it wants to suspend indefinitely any further work on the approval process for its EPR (the same reactor design as Hinkley) in the USA, which sends a pretty strong signal that the EPR in the USA is as good as dead and buried;
- To cap it all, the UK Government has itself further muddied the waters by seeking approval from the EU to hold a 'golden share' in the Hinkley project. This would give them special voting rights, and could theoretically allow Ministers to block the transfer of ownership of Hinkley if EdF decided that it wanted to get out. (Worried about the Chinese taking total control, perhaps?!) Experts believe this may completely undo the case that the UK Government made to the Commission last year for approval of those huge subsidies.
And in the meantime, it has to be said that the world looks very different from the point of view of renewable energy. The costs of solar and wind continue to fall, year on year, with every indication that there's a further 40% reduction to come over the next few years.
Hinkley has become toxic
So perhaps it's not so surprising that the Coalition Government has been a lot quieter on its Hinkley hopes and dreams than it was last year. Not a peep, for instance, from the disgracefully compromised Liberal Democrat Secretary of State for Energy, Ed Davey. And not a peep from George Osborne, who must be looking at the finances of Hinkley Point with increasing hostility.
Interestingly, nor have we heard anything like as much from today's pro-nuclear greenies as we did before - including George Monbiot, Stephen Tindale, Mark Lynas and even Jim Lovelock.
From what I've heard (by way of reliable gossip, it has to be said, rather than hard-and-fast evidence!), they've all realised that their ability to enthuse people with their pro-nuclear illusions is being severely (if not entirely) undermined by the Hinkley Point fiasco.
The combination of EdF and Areva (both realistically bankrupt, were it not for funding from the French Government), Chinese investors (demanding copper-bottomed guarantees that they will be bailed out when Hinkley Point turns into another Olkiluoto or Flamanville), a reactor design (the EPR) that even the keenest of nuclear engineers have started to describe as "unbuildable", and the threat of further, even more costly delays (there's now no chance at all that any reactor at Hinkley Point will be generating any electricity before 2025), is quite simply toxic.
My best bet is that these pro-nuclear greenies now desperately need Hinkley Point to fail, so that their reputations will be sort-of salvaged - even as they start hyping the next instalment of their nuclear nonsense.
We got a very strong sense of that through the speech of another pro-nuclear, former greenie, Baroness Worthington, Shadow Spokesperson for Energy and Climate Change in the House of Lords. In her words, the Hinkley Point deal has caused "a crisis of confidence" in the future of energy policy in the UK:
"policies which Conservatives brought in have resulted in a massive destabilisation of the energy market. Intervention in the market has dented confidence for a contract which has yet to be signed. We have become over-obsessed with the delivery of one project."
And this from one of the keenest advocates of nuclear power in the Labour Party! No doubt her voice has been influential in the current Labour Party position on Hinkley, which is to argue that it needs a completely new financial appraisal, effectively giving the Labour Party a 'get-out-of-Hinkley Point' post-Election option.
When in a hole, stop digging. Tom Greatrex, take note!
Which is by no means the same thing, sadly, as Labour developing a 'get-out-of-nuclear-altogether' option. The Labour Party's deeply unimpressive Energy Spokesman, Tom Greatrex, recently told voters in Scotland that a future Labour Government would force Scotland to be part of a new UK-wide nuclear programme - regardless of the SNP's very clear anti-nuclear stance. (Go for it, Tom: what better way of winning back Labour voters in Scotland!)
All this chaos and confusion must surely mean that, post Election, we might at last be able to get back to a serious debate about energy policy here in the UK, without Hinkley Point distorting every single aspect of today's Electricity Market Reform, shadowing out every single policy alternative, and holding back the mindset and behavioural revolutions amongst both business and the general public on which our energy future really depends.
We've already paid a very significant price for Labour's sad surrender to the seductive lies of the nuclear industry, and for this Coalition Government's near-incomprehensible decision to pursue the EPR reactor design for Hinkley Point. Between them, they've dug a hole already so deep that they have no idea what to do other than to keep on digging.
So let's just hope that those Austrians stick to their guns with their legal challenge, for this is by far the longest and by far the most robust rope-ladder up which those benighted politicians - and ever-more benighted pro-nuclear greenies - will soon - ever so thankfully - be able to climb.
This article was originally published on Jonathon Porritt's blog.
Using this website means you agree to us using simple cookies.