If you have shares in GE, Kier Group, SPX, Balfour Beatty, Atkins or First Group, you might be pleased with the decision to proceed with the construction of Hinkley Point C, the nuclear plant in Somerset.
These companies, or their subsidiaries, are among the contractors to have been awarded a role in this decade-long project, and will between them create many of the 25,000 jobs that are required to build and operate the plant.
Most unions and manufacturers’ associations are understandably happy with the employment and business prospects. Main investor Électricité de France anticipates the Somerset economy and the surrounding south-west region will receive an annual boost of £200m during the 10-year construction period. But the project is not without its critics. Professor Joanna Haigh, a climate change expert at Imperial College London, says: “A reliance on the Hinkley Point project would be misplaced, as well as very costly.”
Cost certainly seems to be a concern. The fixed purchase price guaranteed by the project of £92.50 per megawatt hour (MWh) – which adjusted for inflation since 2012 amounts to £97 per MWh – is more than twice the current UK wholesale energy price. In a report published in July, the National Audit Office states that government aid for new nuclear investment “increases the risk that [consumers] do not benefit as much from any long-term changes, such as technological advances that reduce the cost of other low-carbon sources”.
On September 29 the government issued an assessment that admitted the cost of solar power in 2030 was likely to be £65 per MWh – 30 per cent lower than the cost of Hinkley Point – and onshore wind power around half that price at a mere £49 per MWh.
Doubt has also been cast over the technology to be incorporated into the nuclear plant. The reactors will be European pressurised reactors (EPRs), an advanced form of the pressurised water reactor that is widely used in existing plants.
Theoretically, an EPR generates more electricity from less fuel, is easier to maintain and, most importantly, “it is unquestionably a safer system”, says Timothy Abram of the University of Manchester.
However, it is unproven. The only two pilot plants in existence are not yet operational and are over-budget. One, in Flamanville in France, has been under construction for almost 10 years, is six years behind schedule and has already cost £10.5bn. The other, in Olkiluoto in Finland, is 10 years behind schedule and three times over-budget.
Given these reservations, it is not surprising that the former government’s Department of Energy and Climate Change has forecast a relatively minor role for nuclear power in the 2035 national energy mix. Nuclear is expected to account for about one-third of our supply at that point, whereas renewable sources will provide closer to half.
Renewables already contribute 25 per cent of the British energy mix, and offshore wind power is expected to make up 10 per cent on its own within 10 years, compared with the 7.5 per cent anticipated input from the Hinkley Point plant when it is completed in around 2030.