Artists impression of the finished Hinkley C reactor. Image: EDF.
Hinkley C's claimed benefits evaporate under scrutiny
6th October 2015
To explain their desperation to commit an estimated £76 billion of public money to the Hinkley C nuclear project, writes Paul Dorfman, the Treasury and its Chancellor, George Osborne, claim there are other benefits that justify this vast expenditure. So what exactly are they? And do the claims survive critical examination?
Osbornes 'big arguments' for Hinkley just don't stack up. It won't make a timely contribution to UK security of supply or decarbonisation, and won't contribute to affordability, price stability and least-cost for the UK energy consumer.
So much has been written about the plan to build two new EDF reactors at Hinkley Point that you might think that it's all been said .
So far, the main focus has been on the cost of the thing - but money is really only just part this nuclear deadlock.
Of course, Osborne knows Hinkley is much, much too expensive. That battle has been fought, and he lost it some time ago.
But the real nuclear war has just begun - as, when pushed, Osborne, the Treasury and DECC all say that the big picture is really about a rats nest of issues facing the UK energy market.
These are: security of supply; diversity of supply; decarbonisation - all set in the context of electricity price stability and affordability. So let's take a look at each in turn and see if any make sense - just to make sure.
Security of supply
Osborne says that we need a secure supply of nuclear baseload electricity. But Steve Holliday, CEO of National Grid, the company that operates the power transmission networks in the UK and in the northeastern US, says the idea of large nuclear power stations to be used for baseload power is outdated:
"The world is clearly moving towards much more distributed electricity production and towards microgrids. The pace of that development is uncertain. That depends on political decisions, regulatory incentives, consumer preferences, technological developments. But the direction is clear." 
And unlike Germany, who are cutting consumption, Osborne's energy policy is based on the assumption that there will be increasing energy supply demand. But is he really unaware that since 2005 overall energy use in the UK has fallen by 18%?
Just in the last year, even while GDP grew by 2.8%, energy sales fell by 6.6%. In fact, we are now using 5% less energy than 50 years ago, even though our wealth has practically tripled. So serious energy efficiency policy scenarios show that the UK economy could flourish whilst using significantly less energy.
Osborne says that Hinkley is needed to 'stop the lights going out' - yet any 'generation gap' is already forecast by Ofgem before 2020. So the real security of supply challenge happens well before Hinkley could begin generation.
Putting aside the inevitable construction cost and time over-runs, the fact is that Hinkley wont make it on-time to help with our security of supply problem - since, according to EDF, it's not supposed to come on-line until 2024 at the very earliest, and that date is looking more and more optimistic.
And there's a misconception that all except one of the UK's eight nuclear power plants will be closed in 2024. Rather, EDF, the owner of most of them, say that five of their seven operating UK reactors will continue to 2027-31 and even longer.
Diversity of supply
There is good evidence to predict that UK onshore wind and PV will be at zero operational cost by 2025, and offshore wind will have a far lower operational cost than nuclear . In response, Osborne says he doesn't prefer nuclear, its just that he needs it for a balanced portfolio of power sources.
But the flip side to investment in Hinkley is low investment in renewable energy generation. This is because the government Levy Control Framework imposes a strict cap on low carbon energy financed from the public purse (from levies on the bills of energy consumers) .
And because the government will be contractually obliged to provide on-going State Aid for the incredibly long 35 year Hinkley contract, there will simply be very little money left over for renewables - as the Levy Control Framework budget will have been already consumed by nuclear.
So Hinkley will crowd out investment in renewables. Greedy nuclear will have 'eaten all the pies' before renewables get a look in, and progress towards achieving overall targets for low-carbon renewable energy will inevitably falter.
All this being so (which it is), we can see why the government has been chopping and slashing at UK renewable funding, and why there is widespread concern at the failure to consider a purposeful energy efficiency stimulus for real diversity of supply.
Ramping climate change means we need to de-carbonise quickly. Osborne has reframed nuclear as a response to climate change. But Hinkley, together with its radioactive waste stores, including spent fuel, will be sited on the coast, increasingly vulnerable to sea-level rise, flooding and storm surge from climate change.
Sorry to say that, as the UK Institute of Mechanical Engineers state: "Nuclear sites based on the coastline may need considerable investment to protect them against rising sea levels, or even abandonment or relocation in the long term." 
Osborne maintains that nuclear is low-carbon. Yet serious analysis shows that, factoring in the full nuclear life-cycle from uranium mining, through transport, fuel enrichment, plant construction and operation, decommissioning and waste management, nuclear CO2 emissions have a mean value of 66g CO2e/kWh.
That's significantly higher than for wind (2,8-7,4 g/kWhel), hydropower (17-22 g/kWhel), photovoltaic (19-59 g/kWhel), and energy efficiency measures (which are at least ten times more cost effective) .
Affordability and price stability
Osborne says Hinkley is good value. But it's difficult to comprehend how Hinkley might contribute to affordability, price stability and least-cost for the UK energy consumer.
In fact, Hinkley would be the most expensive piece of nuclear kit ever built , and the agreed price for its electricity must inevitably lead to significantly higher prices for the UK energy consumer .
However, it does remain true that the deal would prove very profitable to French and Chinese nuclear corporations during the lengthy 35-year Contract period, including the very generous proposals for an inflation-indexed deal.
Essentially, all this means that the Government is willing to add £19 billion to the deficit, and will impose £2 billion/year on the energy bills of hardworking families in order to support Chinese and French state owned industries provided wholesale electricity prices do not fall, in which case the imposition on bills will be even greater.
Signed, sealed, delivered?
Osborne says he will sign a deal with the Chinese President Xi JinPing in late October 2015. But there are problems for the boyish Chancellor. The governments of Austria and Luxembourg, and six German Stadtwerke have launched a legal challenge through the EC Court of Justice .
They say that UK nuclear State Aid subsidies runs counter to EU Law. Whatever the outcome, based on the average time-spans of similar cases, this legal action is likely to delay Hinkley for three to four years . In any event, how on earth can any real decision about Hinkley be made when it's subject to a serious European governmental law suit?
Also, it's become clear that EDF have been aware for some time of critical anomalies in the EPR reactor planned for Hinkley . France's nuclear safety regulator, ASN, are still carrying out critical tests on 'serious' flaws in the steel housing in the reactor core - and if there's one place you don't want any flaws it's the reactor pressure vessel itself.
So how can Osborne come to any decision about Hinkley before these fundamentally important, critical safety tests are carried out, and the results anaysed?
This means that, for key legal and technical safety reasons, anything Osborne may or may not sign just wont be sealed or delivered. On top of this, it's clear that Osbornes 'big arguments' for Hinkley just don't stack up. It won't make a timely contribution to UK security of supply or decarbonisation, and won't contribute to affordability, price stability and least-cost for the UK energy consumer.
The development of diverse, sustainable and affordable low carbon energy is a growing economic sector with huge potential for job creation in the UK.
To limit this diversity for political face-saving reasons through inflexible and costly support of nuclear power, at the expense of other, more flexible, safe, productive, cost-effective and affordable technologies seems, at the very least, unwise.
Dr Paul Dorfman is Honorary Senior Research Fellow at the Energy Institute, University College London (UCL); Joseph Rowntree Charitable Trust (JRCT) Nuclear Policy Research Fellow; Founder of the Nuclear Consulting Group (NCG); Executive Board Member of the International Nuclear Risk Assessment Group (INRAG).
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