The UK government approves the 3.2 GW nuclear power station in England. High costs and subsidies could prove to be a financial disaster for the UK.
On Thursday, 15th of September 2016, the British government approved the first two reactors of the controversial nuclear project Hinkley Point C. Construction is to start in mid-2019, while the power plant is due to produce power in 2025. When finished it might produce seven percent of Britain’s electricity. With old nuclear power plants being decommissioned until 2030, the new British government saw the need for Hinkley Point C. It will be built by French EDF and China General Nuclear Power (CGN), where EDF owns roughly two-thirds of the project and CGN the one-third.
The estimated costs of the power plant are more than 21 billion Euro, while the UK agreed to pay the owners of the power plant 110 EUR/MWh generated by the new units for 35 years. This subsidy evokes criticism, being two to three times the current wholesale prices in the UK. This deal means that state-run EDF and CGN could be paid up to 110 billion Euro from British taxpayers.
At the same time the prices for wind and PV have been declining and large scale offshore wind already reached levels of less than 70 EUR/MWh recently. In addition large-scale baseload power plants, with limited potential to provide flexibility are a bad fit for fluctuating renewables. Furthermore costs for the construction of similar nuclear reactors have been exploding, as the examples of Olkiluoto in Finland and Flamanville in France showed. A similar fate with delays and additional costs in the billions might await the ambitious plans in the UK as well.
