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Hinkley Point C strike price agreed: reaction

A round-up of who is saying what about the 'landmark deal' for the British nuclear sector

By
PE
October 21, 2013



The news that the UK Government and French energy company EDF has reached an agreement on the price of electricity to be generated from Hinkley Point C was a long time coming. Here we round up the best of the deluge of reaction to the deal that Prime Minister David Cameron says “marks the next generation of nuclear power in Britain”:

Speaking on behalf of the Royal Academy of Engineering, Dame Sue Ion warned about the slow progress in rejuvenating the UK's deteriorating electricity generating capacity:

“Whilst this announcement on new nuclear stations is welcome we would do well to recall that this is already some two years later than originally foreseen – and similar delays are being experienced in the drive to deliver significantly enhanced offshore wind generation.

“Last week’s Royal Academy of Engineering report GB electricity capacity margin says ‘The lead times associated with closing, mothballing, reopening or building plant are such that decisions taken during a period of uncertainty can have long ramifications. Thus even a temporary interruption of clear market signals, if it occurs at a critical investment decision point, may have disproportionate effects.’

“The UK’s utility sector is dominated by overseas companies with supervisory boards making decisions on an international basis. Uncertainties in the stability of the power generation sector in the UK do nothing to secure confidence in the UK as an appropriate market in which to invest.”

Greenpeace UK Executive, director John Sauven, helpfully pointed out that radioactive waste was still a problem:

“Hinkley C fails every test – economic, consumer, and environmental.  Giving it the green light when there is no credible plan for dealing with the waste is also unacceptable. David Cameron has said himself that until the waste issue is sorted, no new investment is possible. This is yet another government U-turn which is creating uncertainty for investment in both energy efficiency and renewable energy, which, despite recent headlines, remain the best long term solution for the consumer, energy security and tackling climate change.”

Whereas most other green NGOs called for increased investment in renewable electricity generation. Friends of the Earth’s policy and campaigns director, Craig Bennett, said investment in renewables needs to be increased:

“The quickest way to end our costly fossil fuel dependency is though energy efficiency and renewable power, not new reactors that will suck up precious investment and take years to complete.

“Investment in German renewables has led to a massive fall in the wholesale cost of electricity. The Government should be following this example, instead of locking the UK into costly nuclear power for decades.

REA chief executive, Dr Nina Skorupska, said we should build biomass plants in the interim before new nuclear plants are operational:

“Hinkley will still be a construction site when old coal and nuclear capacity is shut down. In contrast, the Government could start plugging the generation gap straight away with another reliable low carbon solution: biomass. Biomass plants take only three or four years to build and provide flexible power when we need it. It is not too late to provide support for biomass in the EMR package, and we urge the Government to do so.

The Solar Trade Association (STA) said that solar power is significantly cheaper than nuclear power. STA chief executive, Paul Barwell, said: 

“Renewables must be treated on a level playing field. Solar power has already achieved unprecedented cost reductions over the last three years and is projected to continue to reduce costs in real terms over the next decade. Solar power risks being unfairly constrained in the UK even when it will be cheaper than other low carbon technologies.”

Elsewhere, industry and engineers welcomed the news, albeit cautiously. Scot Parkhurst, UK energy sector director at consultancy WSP is still worried about energy security despite the announcement:

“Deep-rooted uncertainty in the industry, largely due to the dawdling Energy Market Reforms, have delayed construction to the extent that generating capacity is only just meeting energy demand. On top of that, our spare capacity is set to fall to 4% over the next three years so if we see above average winter demand or reduced electricity imports from the EU then there could be no spare capacity at all in 2015 and 2016. It’s a very worrying situation for our energy security.”

The Institution of Civil Engineers (ICE) director general, Nick Baveystock looked forward to the passage of the forthcoming Energy Bill for future energy security:

“Passage of the Energy Bill still however remains a crucial missing piece of this jigsaw. While the agreement on a strike price lifts the cloud of uncertainty for investors and demonstrates Government’s commitment to the future of nuclear, it is the Energy Bill that will provide the necessary strategic direction required to build investor confidence in the long term. We urge prompt progress to secure its passage.”

Dr Paul Norman from the Nuclear Physics Group at the University of Birmingham believes that Hinkley Point C would be built on time and to budget. He said:

“EDF's partnership with China should also be a positive move, both financially and in terms of helping to keep the project to time and to price - whilst some reactor projects have been known for delays and prices rises, two of this same reactor type are currently being built at Taishan in China, and are both to time and to budget.”

Unite union national officer Kevin Coyne is pleased about the jobs. He said:

"The go-ahead at Hinkley Point will deliver thousands of skilled jobs in construction, manufacturing and the operation of the power station. The deal will hopefully pave the way for more power stations which will in turn generate more skilled jobs."

And Rupert Cox, chief executive of the Somerset Chamber of Commerce, said that local firms are ready to build the new plant:

“Our on-going supply chain work enables us to develop relationships with the preferred top tier contractors, ensuring that they are aware of the huge pool of supply chain resource they should be tapping into here in Somerset and making introductions that will bring economic investment and job creation. 

“There are tremendous opportunities for businesses to invest in Somerset and become part of this once-in-a-generation project.”

Finally John Cridland, director-general of the Confederation of Business Industry, is rather pragmatically looking forward rising energy bills. He said:

"This is a landmark deal which will help us meet our future energy challenges, while boosting jobs and growth. Amid understandable public concern about rising bills, it's important to remember this investment will help mitigate the impact of increasing costs. The fact is whatever we do, energy prices are going to have to go up to replace ageing infrastructure and meet climate change targets - unless we build new nuclear as part of a diverse energy mix.”






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