It’s not often that nuclear matters make me laugh out loud. But yesterday provided one such occasion, on reading of the latest announcement from EdF that a new ‘optimised reactor’ would be unveiled in 2020 at roughly half the price (£5.3bn) of the reactors currently under construction at Hinckley Point in Somerset (each at £9.8bn). Laugh? I nearly cried.
In a very competitive field, EdF is the biggest nuclear bullshitter of the modern era. It amazes me that anybody believes a single word sluicing endlessly out of its PR machine. It’s carrying debts of around €33bn. Profits fell last year by 16%. Its fleet of reactors in France is getting older all the time, with ever more frequent outages. Its new-builds at Olkiluoto in Finland and Flamanville in France are both massively over budget and behind time. And it still hasn’t got a clue about the ever greater volumes of nuclear waste it’s producing. If it weren’t for endless bail-outs from the French Government (which holds an 84% stake in EdF), this is a company that would have done a Carillion long ago.
(The particular reason I was laughing so loud, by the way, is that EdF once promised that it would deliver electricity from Hinckley Point at no more than £50 per MWh. The UK Government eventually had to settle on an astronomical £92.50 per MWh to get the deal with EdF over the line.)
But this is all par for the course with an industry that is increasingly desperate to persuade governments and investors that it still has a viable future. Given the current state of affairs, there are only three options:
- Get the basic costs right down so that it can compete with renewables, gas and so on. This is EdF’s line, however absurd it may be.
- Get governments to pile in billions of pounds of public money. This is the line being taken by the Hitachi consortium seeking to build a new plant at Wylfa in Anglesey, North Wales (see below).
- Get out of big nuclear altogether, and focus on yet another form of nuclear bullshit with the promise of Small Modular Reactors (see www.jonathonporritt.com/blog/small-modular-reactors-nuclear-industrys-latest-pipe-dream).
The desperation becomes more and more palpable because nothing is running in their favour when it comes to costs and markets. My good colleague Paul Dorfman summed it up nicely for me back in January:
“UK offshore wind: now at £57.50 per MWh.
German onshore wind: now at €36.24 per MWh.
German solar: now at €42.90 per MWh.
(ie both technologies already viable with zero subsidy!)
Cost of solar declining by 11% pa (ie by 50% over the next five years).
Cost of all renewables (and storage) plunging.
‘Best case’ for nuclear (in their wildest dreams): £60-£75 per MWh.”
That tells it all ready. Nuclear costs up, renewables down. But the UK Government still doesn’t see the economic reality that is staring it in the face. Even though BEIS has recently reduced its forecast for new nuclear from 17GW by 2035 to 14GW, it’s still fixated on big nukes as the only way of providing low-carbon energy security for the UK.
Which is why Hitachi is now turning up the pressure in discussions with Ministers: you want big nukes; we can’t possibly compete with other electricity generators here in the UK; so hand over enough subsidy to keep us in the game.
That is a somewhat crude summary, I have to admit, but not that crude. Duncan Hawthorne, head of the Hitachi-led consortium, warned Ministers back in December last year that Hitachi could not be expected to keep ‘burning money’, and only a great dollop of taxpayers’ money (start at £5bn and keep going up) will persuade them to stay in the game.
Nothing if not brazen! And how could Theresa May and her Ministers possibly accede to this demand, having refused similar demands from EdF time after time? What about all the other ‘nuclear hopefuls’ still in the game at Moorside (where the Korean company, KEPCO, the Government’s new best nuclear friend, would certainly demand equal treatment), or Bradwell (ditto the Chinese), or even Sizewell (EdF’s next nuclear fantasy)?
Treasury Ministers must be aghast at this potential raid on public finances. Just think of the headlines: “Government promises £xxbn to nuclear industry, equivalent to XX new hospitals, XX nurses, £XX on social care.” There are many nuclear obsessives in this Government, to be sure, but could they possibly be that stupid?
When Theresa May confirmed the deal with EdF back in 2016, she was persuaded by her civil servants that there really wasn’t a choice. That’s now patently absurd. Just two years on, reality on the ground keeps on demonstrating why this bunch of leaden-footed mugwumps just need to get out more and see what’s actually happening with renewables, storage, energy efficiency, smart grids and so on, both here in the UK (with 13 clean energy records smashed in 2017, making it “the greenest year ever” from an energy perspective) and all around the world.
It’s just so embarrassing for our nation to be so ill-served by a generation of politicians so intransigently stuck in the past.
Jonathon Porritt
Originally published in his personal blog.