29 July 2016
A briefing paper on the vote to go ahead
with a new reactor at Hinkley Point C
I was interviewed on Newstalk FM this morning by Kieran Cuddihy about the decision late yesterday that could give the go-ahead to building Britain’s first new nuclear power station for a generation.
I was speaking as President of the Irish Campaign for Nuclear Disarmament (Irish CND). Also on the programme was Dr David Robert Grimes of Oxford University, a Dublin-born physicist who writes regularly for The Irish Times and the Guardian.
In advance of the programme, I prepared this briefing paper last night.
Britain is likely to get its first new nuclear power station for a generation after the directors of the French energy group EDF voted in favour of building the Hinkley Point C power station. After a decade of debate about the controversial £18 billion project, the EDF board approved the project by 10 votes to seven.
If the plan gets the expected British government approval in a few weeks’ time, there will be not one, but two new EPR-style reactors at the Hinkley Point C power station in Somerset.
But it will be too big, too slow, and too expensive.
A more dangerous nuclear world
Nuclear safety has been back in the public eye with the 30th anniversary of the Chernobyl accident recently, along with fifth anniversary of the Fukushima crisis.
The decision comes just weeks after the British government pushed through a decision on replacing Britain’s Trident nuclear submarine force. Britain is on a mad roll towards making this a more-nuclear world and more dangerous world.
Hinkley C is going to produce weapons-grade uranium and weapons-grade plutonium. At a time when world tensions are rising, when Cold War tensions are at a height we have not seen since the 1980s, at a time when we are worried about terrorists and rogue states gaining access to the uncontrolled production of dangerous material like this, this seems like lemmings rushing to the edge of the cliff.
How can the world argue morally that it is wrong for Iran to have its nuclear programme when Britain is stepping up the nuclear race with both nuclear weapons and nuclear power stations?
In addition, it is only five years since the Fukushima nuclear disaster in 2011 led Japan and Germany to shut down all their nuclear reactors. Japan has since restarted some, but Germany still plans to close all its plants permanently by 2022.
Why should we be concerned?
Of course, we should be concerned in Ireland.
The site of the Hinkley Point C is just 240 km from the Irish coast, and is a greater distance from London – a 265 km drive.
Yet the British government insists it does not have to consult with its European neighbours because there is little or no likelihood of “significant transboundary environmental impacts.”
In the past, British courts have ruled against An Taisce, the Irish National Trust, when it tried to block Hinkley. An Taisce’s lawyers say there was a failure to undertake “transboundary consultation” as required by the European Commission’s Environmental Impact Assessment Directive.
Ireland, The Netherlands, Norway and other European countries have argued they should have been consulted about Hinkley, and even more distant Austria has raised the possibility of a severe accident that could lead to radioactive materials being spread by wind across Europe.
Others are worried too. A UN committee has already ruled that Britain failed to consult European countries properly over potential environmental risks. The committee said Britain “is in non-compliance with its obligations” to discuss the possible impact of any accident or other event that could affect those nations in proximity to Hinkley.
Paul Dorfman, a senior researcher at UCL’s energy institute, said the ruling from the UN Economic and Social Council throws great uncertainty over Hinkley.
Ironically, the British government, which supports the project heavily, has welcomed this vote from EDF as a vote of confidence in the British economy just a month after the UK voted to leave the EU.
The cost of the project
The construction of Hinkley Point C is due to be completed by 2025, and its advocates claim it will provide 7% of Britain’s electricity, enough power for six million homes, for almost 60 years.
The British government wants to phase out coal by 2025, and claims nuclear energy offers a lower-carbon option that produces enough electricity to fill the gap created by closing existing plants.
But who said nuclear is cleaner than coal? This is simply exporting the dirt to the Third World, where open-cast uranium mines are radioactive isolated landscapes that blight vast areas for the foreseeable future. Looking at how similar projects have been delayed in France, Finland and other countries, how can we believe that the target date of 2025 is realistic? A similar project has overrun costings in France.
The £18 billion cost of Hinkley Point C is being borne by EDF, which is 85% owned by the French government, and China General Nuclear Power Corporation, which has agreed to take a 33% stake in the project. But the costing must also take account of £3030 billion in subsidies.
EDF’s own flagship project in Flamanville is more than three times over budget and years behind schedule. EDF’s workers in France have campaigned for Hinkley Point C to be delayed or scrapped amid fears it could ruin the company’s finances.
The cost to consumers
This reactor would be the most expensive nuclear reactor in the world, and on top of this it would be poor value for tax payers and consumers.
John Sauven, executive director of Greenpeace, has pointed out that the project is “terrible value for money” for British families.
“This is a bitter pill to swallow for hard up people who have been told that the government is trying to keep bills down while dealing with energy security and lowering carbon emissions. Today’s decision doesn’t prove the UK is open for business post Brexit. It just shows the Hinkley deal became too big to fail in the eyes of British and French politicians.”
And, of course, there is a cost to consumers.
The British government has guaranteed EDF a ‘strike price’ of £92.50 for each megawatt hour of energy it generates. But the present wholesale price of that amount of electricity to the British consumer is £38.
Either consumer prices for electricity are going to rise rapidly in Britain – at a time when they are falling fast in other countries, as we know in Ireland; or the British government, the British taxpayers is going to subside the cost, and in the process subsidise the French and Chinese nuclear programmes.
Can Hinkley Point C (HPC) provide 7% of Britain’s electricity during its estimated lifetime of 60 years? Even these estimates depend on HPC beginning to generate power in 2025, and that is several years later than planned.
In 2007, EDF’s chief executive, Vincent de Rivaz, made the brash claim that people in Britain would be cooking their Christmas turkeys on new nuclear power by Christmas next year . Now, however, Hinkley Point C is not going to be completed before 2025, at least.
John Sauven of Greenpeace points out: “Every time EDF has tried to build a reactor like Hinkley, it has failed. There isn’t a shred of evidence that Hinkley can be built on time or on budget, and if it hits the same problems as its predecessors, it can’t be relied on to keep the lights on in the UK.”
The main reason for the delays has been worries over the financing of the project by EDF. EDF is 85% owned by the French government, and French trade unions warn Hinkley could ruin the company’s finances.
Look at what’s happening in France
In the run-up to the meeting, an EDF director opposed to the project resigned. in his resignation letter, Gérard Magnin said Hinkley C is “very risky.” He did not attend the board meeting in Paris yesterday [28 July 2016].
His walk-out follows the resignation of EDF’s finance director, Thomas Piquemal, in March. He too expressed concerns about the cost of Hinkley Point C, and he resigned because he felt his warnings that Hinkley Point C could bankrupt the company were being ignored.
In June 2016, EDF executives and managers told MPs that Hinkley Point C should be postponed, until it has “solved a litany of problems,” including EDF’s “soaring debts.” At the time, EDF said it was delaying a final investment decision until at least September 2016.
Apart from financial concerns, there are concerns in France too about how to deal with nuclear waste. France’s nuclear safety authority has found weaknesses in a reactor EDF is building in Flamanville, which is the same design as Hinkley Point C.
Flamanville is over-budget and behind schedule. The €10.5 billion nuclear reactor has faced problems that some say could now be repeated in Britain.
It stands on granite cliffs overlooking the Channel and has become France’s most famous building site.
The technology behind the European pressurised reactor (EPR) is meant to be safer than anything that has gone before. But the project is more than three times over budget and years behind schedule, and France’s nuclear safety authority has found weaknesses in the reactor’s steel.
If and when it comes online, perhaps late in 2018, the Flamanville EPR will be the world’s largest nuclear reactor. It is being claimed that the reinforced concrete core is being built to withstand plane crashes and earth tremors. But the combination of the EPR’s size and its safety features have turned it into a construction nightmare.
The proposed waste disposal scheme remains a proposal. No similar scheme has been built yet, indeed the design has yet to be completed, let alone tested or tried.
Today, there is not one single EPR reactor that is operating anywhere in the world. In Flamanville, the first concrete was poured in 2007. Since then costs have more than tripled to €10.5 billion, and the project is six years behind schedule.
In Finland, the location of another EPR, the picture is even worse: the Olkiluoto reactor is nearly a decade behind schedule and three times over budget, with the added headache of legal battles over who is to blame.
We know less about the two EPR reactors being built in China.
In 2015, it emerged that weak spots had been found in the Flamanville reactor’s steel, which is made by another French industrial champion, Areva. France’s Nuclear Safety Authority (ASN) said it had found “very serious anomalies” in the reactor vessel.
As the regulator deepened its investigation, it warned that the problems could affect other reactors in operation. In its latest annual report, the ASN expressed “significant concerns” for the future of France’s nuclear industry.
Mycle Schneider, a Paris-based nuclear policy analyst, accuses the industry of over-estimating its capacity to build highly complex reactors, while under-estimating its skills gaps.
He is worried that relentless cost-cutting pressures could compromise safety, as Areva bids to save €1 billion by 2017 through job cuts. “To me, it is very obvious that you will cut into safety and security and that is what makes me most nervous,” he says. “The financial and economic pressure on all the stakeholders is completely unparalleled.”
The French nuclear regulator, ASN, said it had been informed by Areva that its investigation had found evidence of irregularities in about 400 components produced since 1965, of which some 50 are believed to be in use in French nuclear plants. Areva found faults at a new reactor being built at Flamanville in Normandy. That scheme, like another at Olkiluoto in Finland, is using an EPR like the one planned for Hinkley and is both massively delayed and over budget.
Kevin Coyne, the national officer for energy of the union Unite, was absurd when he said that going ahead “could result in the lights going out in Britain.”
Environmental groups including Greenpeace have criticised any go-ahead, calling for investment in homegrown renewable energy like offshore wind.
John Sauven of Greenpeace says: “We need to invest in reliable home-grown renewable energy like off-shore wind which is powering other northern European countries more cheaply than Hinkley, even taking into account the back-up cost when the wind doesn’t blow.”
The supporters of Hinkley claim it is going to provide 7% of Britain’s electricity from about 2025, at a time when old coal and atomic plants are closing down.
This dash for brash, costly projects comes just as electricity production is moving to a smaller, more dispersed model with the arrival of renewables. Meanwhile, demand for power has been falling in continental Europe as a result of factory efficiency drives.
Britain too should be thinking about smaller, easier-to-build, more-flexible nuclear power stations.
The nitty-gritty of the finances
The unhedged British wholesale electricity price in January 2015 was about £50/MWh. EDF has negotiated a guaranteed fixed price – a “strike price” – for electricity from Hinkley Point C of £92.50/MWh (in 2012 prices), which will be adjusted and linked to inflation during the building period and over the subsequent 35-year tariff period. The price could fall to £89.50/MWh if a new plant at Sizewell is also approved.
The National Audit Office estimates that the additional cost to consumers of “future top-up payments under the proposed HPC CfD have increased from £6.1 billion in October 2013, when the strike price was agreed, to £29.7 billion in March 2016.”
Research by Imperial College Business School argues that no new nuclear power plants would be built in the UK without government intervention.
Compared with other power generation sources, actual UK strike prices in 2015 were in the range of £50-£79.23/MWh for photovoltaic, £80/MWh for energy from waste, £79.23-£82.5/MWh for onshore wind, and £114.39-£119.89/MWh for offshore wind and conversion technologies (all expressed in 2012 prices). These prices are indexed to inflation.
In 2012, maximum strike prices were £55/MWh for landfill gas, £75/MWh for sewage gas, £95/MWh for onshore wind power, £100/MWh for hydroelectricity, £120/MWh for photovoltaic power stations, £145/MWh for geothermal and £155/MWh for offshore wind farms.
For projects commissioned in 2018-2019, maximum strike prices are set to decline by £5/MWh for geothermal and onshore wind power, and by £15/MW for offshore wind projects and large-scale photovoltaic, while hydro power remains unchanged at £100/MWh.
A 2014 Agora Energiewende study found that new wind and solar can provide carbon-free power at up to 50% lower generation costs than new nuclear, based on a conservative comparison of current feed-in tariffs in Germany with the agreed strike price for Hinkley Point C, and neglecting future technology cost reductions in any of the technologies.
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If you have not seen this long, dreary tale (The World Nuclear Industry Status Report 2016), email me at email@example.com and I'll email back a PDF of its 240 pages.
Bear in mind that, some seventy years into the atomic age, no country I can think of has solved the nuclear waste disposal problem. And, after the WIPP fiasco in New Mexico, I'm beginning to think that none ever will -- at least not in my lifetime.
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