Will Hinkley Point nuclear power plant make enough money? 

Posted: September 20, 2016 by oldbrew in Nuclear power

Hinkley what's-the-point?

Hinkley what’s-the-point?

The GWPF points out an inconvenient truth – that as more and more subsidised and prioritised renewables are injected into the UK’s electricity grid system, the tougher it must get for competing methods of power generation to turn a profit worth the cost and effort involved.

The UK government has, after some delays, given approval to Hinkley C nuclear power station. However, and in spite of subsidies intended to offset risks arising from renewables policy, it is still not clear that the project can actually make money. It remains to be seen whether EDF has the courage to proceed.

The British government has now given fair warning both to EDF and the Chinese government that it is only lukewarm about this project, and is unlikely to consider augmenting the fixed price, of £92.50/MWh, which will almost certainly be a large subsidy since wholesale prices are expected to be much lower than this for the majority of the project’s lifetime.

If EDF were gambling on being able to obtain a little more support from the British consumer at a later date, from capacity payments perhaps, they should now realise that this is unlikely to happen. Is the deal as it stands sufficient to allow EDF and its partners to invest? Perhaps not.

British Final Electricity Consumption (FEC) has been falling since approximately 2005, when it peaked at 349 TWh per year, and it has now returned to levels not seen since the early 1990s, and continues to fall.

The question therefore, is whether EDF can be confident that the UK’s consumption of electricity will recover sufficiently to give Hinkley a market large enough to turn the strike price into the required cash flow.

Scandalous though the subsidy for Hinkley genuinely is, the truth is that it may not be remotely sufficient to make this power station viable in the policy-distorted market that is already a reality and is set to get worse.

Full report: Will Hinkley Point Power Plant Make Enough Money? | The Global Warming Policy Forum (GWPF)

If they thought electric cars would boost demand, they won’t want to see this…

  1. oldbrew says:

    A long spell of global cooling might do them a bit of a favour by raising demand 😎

  2. michael hart says:

    “Will Hinkley Point nuclear power plant make enough money?”

    What a mess of an energy policy this country has had for many decades. Politicians need to realise that energy ought to be treated with the same degree of caution as the national currency and interest rates: Not something to be played with by morons fresh out of an undergraduate course in politics. And environmentalists should never be let near anything that actually matters.

    But if Hinkley C ever gets built I will at least be confident that it can actually generate electricity reliably, which is more than can be said for the white satanic windmills.

  3. ivan says:

    The question really should be ‘will the new Hinkley Point nuclear power plant a) get built and b) actually work’.

    I think the answer to both is no considering the units that have been under construction since 2007 years behind schedule, way over budget and the reactor technology has not yet been proved to work.

  4. oldbrew says:

    The Austrian government will continue to contest a decision by the European Commission which is facilitating the development of Hinkley Point C nuclear power plant.

    “The ongoing judicial procedure is not affected by the decision of the UK-Government to start to build the nuclear power plant. Our action is aimed at the annulment of the disputed state aid decision of the European Commission”