Hinkley Point C – key points against proceeding
 

1. The EPR technology is unproven and faces problems above and beyond those of other nuclear technologies. No EPRs are currently in operation anywhere in the world. The two under construction in Europe – in Finland and in France – are, respectively, nine years and six years late (to date), with construction costs in each case currently projected to be about three times the level estimated when the build began.¹ Furthermore, in the French case, the reactor pressure vessel is undergoing safety tests due to suspected weaknesses and, in the Finnish case, there is an unresolved legal dispute over the construction. The two other reactors currently under construction in China have also experienced delays under a significantly less stringent safety regime.
 

2. The costs of the EPR are much higher than alternatives. A report published by the National Audit Office² in July is the latest is a long line of analyses that have concluded that the costs of HPC are very high. In particular, the NAO warned that the current CfD subsidy scheme, which guarantees a minimum price for the plant’s electricity, could cost energy consumers up to an extra £29.7bn over the 35-year lifetime of scheme – more than four times the estimate when the deal was agreed in 2013. A range of other subsidies – for example, for dealing with spent nuclear fuel, decommissioning and major accident insurance – will add further to the eventual bill. The NAO analysis follows the publication of a new and higher figure for the whole lifecycle costs estimated by the government’s Infrastructure and Projects Authority.³ Meanwhile the costs of alternatives, such as wind and solar power, have decreased to well below those of nuclear (see below). This has caused leading financial commentators – such as The Economist⁴ – to call for HPC to be scrapped.
 

3. EDF’s financial position is too precarious for it to be relied upon to deliver the project. The recent downgrade of EDF’s credit rating by Standard and Poor’s⁵ and other agencies starkly illustrates the serious financial problems of the corporation, and hence calls into question its ability to deliver on HPC, especially given the latest cost analyses. EDF’s net debt is more than 37 billion euros, and it is already committed to carrying out reactor upgrade programmes currently valued at 100 billion euros⁶ on the French nuclear fleet as well as buying a controlling stake in ailing reactor company, Areva. The company’s poor financial situation has led its finance director to resign and leading trade unions in the sector to oppose HPC because of the damage they fear it could do to the company’s future. At least one credit ratings agency has stated that a go-ahead for HPC would cause a further downgrade to EDF’s status.
 

4. There are alternative energy options which deserve higher priority, including energy conservation, infrastructure improvements and renewable energy. There are numerous alternative options which offer better value for money than HPC. For example, a recent report⁷ by National Infrastructure Commission (NIC) on the UK’s electricity system recommends measures in three key areas – interconnection, storage, and demand flexibility – and argues these could save up to £8 billion a year in efficiency gains. Greater investment in international interconnectors would give the UK much greater capability to buy and sell excess electricity. Energy storage and demand flexibility are currently being held back by regulatory obstacles which the government could remove quickly at no cost and with significant benefit. Demand flexibility measures in Australia and the USA have enabled them to meet 15% of peak electricity demand in this way – and the UK could benefit at a similar scale.

Domestic and commercial energy conservation programmes – including energy efficient lighting, appliances and building insulation – are essential, but often neglected, elements of energy policy. Investment in, for example, building insulation could and, we think, should also be regarded as a key element of the UK’s strategic infrastructure. National domestic insulation programmes have been markedly scaled back since 2012 – due to both government spending cuts and poor management – yet they can provide large-scale, cost-effective reductions in energy consumption.⁸ This would avoid significant amounts of electricity being used for heating in buildings, which is one of the arguments used to justify the construction of HPC. Indeed, despite recent set-backs in domestic energy conservation programmes, DECC projections for the total electricity demand in 2025 have fallen by 77TWh – which is three times what HPC would produce.⁹ Further benefits of domestic insulation programmes are the reduction of fuel poverty and improvements in public health.

The costs of renewable energy generation have fallen markedly in the last few years. The NAO report points out that the government’s latest cost projections (levelised) for UK electricity generation in 2025 indicate that nuclear power will be markedly more expensive, while wind and solar will be markedly cheaper.¹⁰ As such, onshore wind and large solar will be about half the cost of nuclear, with offshore wind comparable in cost. Indeed, further analysis by Greenpeace shows there is good reason to believe that offshore wind will be cheaper by then.¹¹

Numerous energy modelling studies, based on a wide range of assumptions, have demonstrated that nuclear power – and HPC in particular – could be replaced by a combination of the above alternatives, while also delivering on energy security, low carbon targets and affordability. For example, a study just published by the Energy and Climate Intelligence Unit¹² – using very conservative assumptions about technology options – estimates that £1 billion a year could be saved. Another recent study, published in the leading science journal Nature,¹³ has laid out a pathway towards 100% electricity generation by renewable energy in the UK, based on recent international experience with wind, solar, biogas and storage technologies.
 

5. The need for HPC to fill the role of a baseload plant is overstated. It is widely claimed that nuclear power is required to deliver constant baseload electricity. Yet the changing nature of electricity generation – incorporating more fluctuating and distributed energy sources, such as renewables, and making greater use of demand response measures as discussed above – means that the historical requirement for baseload power stations is rapidly receding.^14,15 Since nuclear power stations – even new ones – have major technical limitations on the variation of their output, they are ill-suited to the emerging grid. Recent comments from senior figures at the National Grid bear out this point.¹⁶ Indeed, electricity demand itself is highly variable – so rapid response measures are becoming more important. At present, these include interconnectors to European networks (which can currently deliver 4GW – a similar scale to HPC), pumped hydro storage, gas plant and demand management measures. All these options can be expanded with more energy storage becoming rapidly available as new technologies are developed. As the NIC points out, the interconnector capacity will double by 2020 based on existing plans and could easily be trebled with further investment. Increasing use of biogas would avoid the net carbon emissions of natural gas. Interestingly, the Nature paper mentioned above concluded that the need for back-up storage technologies on an electricity system mainly supplied by wind and solar will be much less than commonly believed.
 

6. The security and environmental problems of nuclear power remain serious. Cabinet Office advisors have pointed to the risks of allowing a state-owned corporation of a non-democratic power such as China to have a key role in UK energy infrastructure. We share these concerns, but they are not the only ones relevant to HPC. Large nuclear power stations, such as HPC, can cause energy security problems as they require such a high level of instantaneous back-up to be available in the event of a sudden outage. Nuclear power in general creates unique security and environmental risks, and there remain major difficulties in managing these risks adequately. Nuclear plant, radioactive waste sites and nuclear fuel facilities are all potential terrorist targets – and are much more attractive to terrorists than other energy supply options. Such facilities have been found on the target lists of terrorist organisations. The risk of a major nuclear accident also cannot be ruled out, and such risks have proven to have been underestimated in the past. Furthermore, there remains no agreed long term solution for higher level nuclear wastes. For example, the management of legacy radioactive waste in Cumbria remains both very expensive and technically difficult. Renewable energy options, of course, do not suffer from these problems.
 

Main references

1. Parkinson S (2016). UK climate policy unravelling. Scientists for Global Responsibility Newsletter, no. 44. /resources/uk-climate-policy-unravelling

2. NAO (2016). Nuclear power in the UK. https://www.nao.org.uk/report/nuclear-power-in-the-uk/

3. DECC/ IPA (2016). DECC Government Major Projects Portfolio data 2016. July. https://www.gov.uk/government/publications/decc-government-major-projects-portfolio-data-2016

4. The Economist (2016). Hinkley Pointless. August. http://www.economist.com/node/21703367

5. Reuters (2016). UPDATE 1 - S&P downgrades EDF hybrids to junk status. May.
http://www.reuters.com/article/edf-ratings-idUSL5N18A6AP

6. World Nuclear News (2016). EDF faces €100 billion reactor upgrade bill, says audit office. February. http://www.world-nuclear-news.org/RS-EDF-faces-EUR100-billion-reactor-upgrade-bill-says-audit-office-1102164.html

7. National Infrastructure Commission (2016). Smart power. March.
https://www.gov.uk/government/publications/smart-power-a-national-infrastructure-commission-report

8. Association for the Conservation of Energy (2016). Home energy efficiency 2010-2020. March. http://www.ukace.org/wp-content/uploads/2016/03/ACE-briefing-note-2016-03-Home-energy-efficiency-delivery-2010-to-2020.pdf

9. Friends of the Earth (2016). Why the government’s National Policy Statement for Energy is out of date: implications for Hinkley C nuclear power station. August. https://www.foe.co.uk/sites/default/files/downloads/national-policy-statement-energy-hinkley-101619.pdf

10. NAO (2016) – see 2 above

11. Greenpeace (2016). Even offshore wind could be cheaper than Hinkley. July. http://energydesk.greenpeace.org/2016/07/27/hinkley-offshore-wind-cost-effective/

12. ECIU (2016). Hinkley: What If? http://eciu.net/reports/2016/hinkley-what-if-can-the-uk-solve-its-energy-trilemma-without-hinkley-point-c

13. Barnham K, Knorr K, Mazzer M (2015). Recent progress towards all-renewable electricity supplies. Nature Materials, no.15, pp.115–116. doi:10.1038/nmat4485
See also: http://www.mng.org.uk/gh/renewable_energy/barnham_2015.pdf

14. NIC (2016) – see 7 above

15. Barnham et al (2015) – see 13 above

16. For example, see: BBC News (2016). Smart energy revolution 'could help to avoid UK blackouts'. August. http://www.bbc.co.uk/news/business-37220703