Britain should cancel its nuclear white elephant and spend the billions on making renewables work
THE “golden decade” of co-operation between Britain and China, launched last year as Xi Jinping banqueted at Buckingham Palace, seems to have lasted all of nine months. The centrepiece of the new partnership was a deal in which China would invest £6 billion ($8 billion) in a new French-built nuclear power station at Hinkley Point in south-west England, before building one of its own in the south-east (see page 21). Yet on July 28th, as the Hinkley project was due to receive final approval, Britain’s new government announced ominously that it was under review.
Putting the brakes on Hinkley has tarnished the golden era with China, whose state-owned news agency complained about Britain’s “suspicious approach” (see article). It risks annoying France, which can complicate Britain’s exit from the EU. And Britain badly needs new sources of energy.
Even so, scrapping the deal would be the right decision. Regardless of security worries about China, which are probably overblown, the Hinkley plan looks extraordinarily bad value for money. What’s more, as renewable sources of energy become more attractive, the days of big, “baseload” projects like Hinkley are numbered. Britain should pull out of the deal, and other countries should learn from its misadventure.
The fallout
EDF, the firm building Hinkley, has yet to finish two similar reactors in France and Finland that, based on a design plagued by problems, are overdue and over-budget. The British government has nonetheless promised to pay about £92.50 per megawatt hour for Hinkley’s output, compared with wholesale prices of around £40 today. By 2025, when Hinkley is due to open, that may look even pricier; by the time the guarantee runs out, 35 years on, it could look otherworldly. Other technologies are galloping ahead, upsetting all kinds of pricing assumptions. In the past six years Britain’s government has reduced the projected cost of producing electricity from onshore wind in 2025 by one-third, and of solar power by nearly two-thirds (see chart). Because nobody knows how the next few decades will unfold, now is not the time to lock in a price
One of the few certainties is that Hinkley is not the sort of power station that any rich country will want for much longer. Nuclear energy has a future, but big, always-on projects like Hinkley, which would aim to satisfy 7% of Britain’s energy needs, do not fit the bill. As renewables generate a growing share of countries’ power, the demand will be for sources of energy that can cover intermittent shortfalls (for instance, when the wind stops blowing or the sun goes in).
To keep the lights on in the short run it would make more sense to use gas-powered plants. These can be built quickly, run cheaply and turned on or off as required. Meanwhile, the sums earmarked for Hinkley could be put to use in better ways. Improved electricity storage is one answer to the intermittency problem. Battery technology is fast improving (see article); Tesla Motors opened its “Gigafactory” in America last week; and other firms are experimenting with drawing power from unusual stores, such as traffic-light batteries. Interconnectors can link energy-hungry countries like Britain with northern European ones, where there is a wind-energy surplus, or Iceland, which crackles with geothermal energy. The grid operator could pay firms to curb power usage at peak times.
All of these options would be cheaper than Hinkley, which would take ten years to get going and represent a huge, ongoing cost to bill payers, if it ever worked at all. Such a strategy would also buy time to see what new technologies emerge. The chances are, these would come from China anyway.
This article appeared in the Leaders section of the print edition under the headline "Hinkley Pointless"
