The government’s surprise announcement to delay its final decision about Hinkley Point nuclear power station has been described as “bonkers” by the GMB union and “chaos” by Labour. But is it?
Engineering organisations were – on face value – more circumspect, with ICE director general Nick Baveystock describing the move as “disappointing” and the Civil Engineering Contractors Association concerned that it would cause “uncertainty”. The underlying message is that such a move does little post-Brexit to prove that Britain is open for business.
That’s true. But, in the big scheme of things, is the government’s decision to delay such a bad move?
It was certainly a surprise. The industry had barely begun rejoicing after French giant EDF announced it had approved the funding at its board meeting on Thursday before the government came out and said it was “only right” to review the project and would make a decision by the autumn.
So what’s driven this? Well, the reasons are unclear but in reality there are any number to choose from. Geo-politically, while EDF is responsible for sourcing the funding for most of the £18-25bn scheme, a great deal of the cash is coming from China. There is a great irony in Britain voting for independence and then handing control of its energy future to France and China. That cannot have been lost on politicians.
That wouldn’t perhaps be such an issue if it wasn’t for the extraordinary price – EDF is guaranteed to be paid £92.50 per megawatt-hour (MWh) generated – that’s in 2012 money, and is index-linked. In 2016, that’s just under £102 – about double the current wholesale electricity price. That deal was struck under the Coalition government and an awful lot has changed since then.
Then there are the obvious problems EDF is having making its technology work. Its first EPR under construction, at Olkiluoto in Finland, was supposed to open in 2010; the second, at Flamanville in France, was due to start firing in 2012. Neither is anything like operational yet. Olkiluoto will cost more than twice as much as forecast, Flamanville nearly three times as much. And its not even as if the problems have been the same on both – they haven’t. Each plant has hit its own obstacles, offering minimal confidence that different problems won’t emerge at Hinkley – and leave the UK taxpayer footing the bill to fix them.
It’s for this reason that two EDF directors have quit over its decision to approve the funding, and they were not lone wolves in this: ratings agencies are warning of a downgrade and the French unions are not on board either.
So this does seem like a great moment to take stock and reflect on what we are really trying to achieve here. Is it a cheap, reliable source of energy? Well, gas plants or biomass do that – and very quickly. Or is it a green, renewable source of energy? Well, tidal lagoons would do that – and in a not dissimilar timescale. Or is it to develop an industry and a technology that the UK can export around the world, using all these new (yet to materialise) trade agreements that Brexit brings?
Because if it is that, and there needs to be some consideration of this, then Small Modular Reactors (SMRs) have to be looked at very seriously.
Last month we carried letters from proponents of SMRs – nuclear technology on a smaller scale that could be developed as fabulous UK export story. These reactors harness UK nuclear expertise borne out of submarine propulsion and would be built in factory environments that are fully in line with the UK construction industry’s desire to deliver differently.
One thing that Britain did pretty well in previous decades was to build an industrial strategy around its nuclear prowess. British scientists designed reactors, British companies built them, British engineers installed them. Repeated use of the same designs increased expertise and kept costs down. In short, a supply chain was developed, and it could be developed again.
So herein lies the big question: How many SMRs does it take to build a Hinkley?