Nuclear power plant image via mandj98/flickr. Creative Commons 2.0 license.
Three things you shouldn’t miss this week
- Article: Hinkley Point nuclear plant ‘threatened by Areva financial crisis – Reactor-maker Areva’s stake in new UK nuclear plant called into question amid financial difficulties.
- Chart: Renewables catching nuclear:
- Article: Oil price slump to trigger new US debt default crisis as Opec waits – Falling oil prices and US shale drillers drowning in a sea of debt could be the spark for a new credit crunch.
The UK’s nuclear plans looked even shakier this week as Areva, shareholder and designer of the planned new Hinkley C reactors, saw its shares plunge following financial problems caused by its long delayed nuclear reactor in Finland. According to the Times, the government has responded by ordering a secret review of the financial feasibility of the Hinkley C project.
The project, which could provide 7% of UK electricity demand, is budgeted at £16 billion by lead developer EDF, but the European Commission reckons the bill will be nearer £25 billion. The plans have already generated huge controversy, not least because of the guaranteed price for EDF of £92.50/MWh for 35 years, twice the wholesale cost of electricity – despite government assurances that it would not subsidise new nuclear. Given that Hinkley won’t be completed till 2023 at the earliest, and a similar plant in France is already running 4 years late, would the government do better to pull the plug now?
A key argument for new nuclear is that it will provide reliable low carbon baseload power, in contrast to intermittent renewables. Another is that it will provide high quality jobs in what would be the biggest construction project in Europe. One prominent proponent has been former government Chief scientist Sir David King, but now he may be changing his mind.
According to Geoffrey Lean in the Telegraph, King instead advocates a focus on energy storage, which would allow decarbonisation with renewables alone. He still sees a role for nuclear in less sunny climates, like the UK, but advocates smaller modular reactors – also favoured by ex Environment Minister Owen Paterson. Unfortunately so far these reactors exist only on the drawing board.
The plain fact is that nuclear costs continue to rise, while those of renewables are plunging. With solar on the brink of grid parity in many countries, it won’t be long until the choice is clear as day.