A tale of two power stations

Photo: Ahoy Polloi

The irrationality of current energy policy in Britain is nowhere currently better demonstrated than on the two sides of the Bristol Channel, writes Sean Thompson. On the English side, at Hinkley Point in Somerset, a new nuclear power station is being built, while on the Welsh coast the proposed construction of the ground breaking Swansea Bay Tidal Lagoon is being blocked by the Tory Government in Westminster.

Leaving aside all the well-rehearsed (and entirely valid) arguments against nuclear power stations, Hinkley C looks like a dinosaur even before it is completed.

The only other nuclear power stations under construction that use the same untried ‘European Pressurised Reactor ‘ (EPR) technology, at Olkiluoto in southern Finland and Flamanville in northern France, are both way behind schedule (by nine and six years respectively) and three times over budget. EDF said in 2016 that Hinkley C would deliver power by the end of 2025, at a cost of £18bn. However, it has already put back the completion date to 2027 and admitted that costs have risen to £20.7bn.

The project is, in effect, a gigantic PFI scheme. In return for EDF and China General Nuclear, the French and Chinese state firms building the plant, funding the construction, the two companies will be paid a guaranteed electricity price of £92.50 per megawatt hour, rising annually with inflation for 35 years (the predicted life of the reactor).  According to a highly critical report from the National Audit Office last summer, this amounts to a £30bn subsidy compared to the current wholesale price, up from an initial estimate of £6bn.

This deal was based on the assumption that the cost of electricity would continue to rise in coming years. However, the price of electricity from renewable sources, particularly from offshore wind turbines, has actually fallen dramatically. For example, in 2014, electricity from offshore wind was priced at £150 per megawatt hour; today that price has fallen to as little as £57.50/MWh – and is set to fall further.

Thus, Hinkley C is an expensive and potentially dangerous white elephant even before it has been built.

Just a few miles away on the Welsh coast, a proposal to build the world’s first tidal lagoon power plant in Swansea bay is being stalled by Westminster prevarication. The project would harness the second highest tidal range in the world to produce enough clean electricity to power 155,000 homes (11% of Welsh domestic power consumption) at a price comparable to that from Hinkley C. But Swansea Bay is a pathfinder project, and thus inevitably more expensive to develop than later and larger tidal power stations will be.  The proposed Cardiff Tidal Lagoon would have a potential installed capacity of around 3GW and an annual power output of around 5.5TWh. It could comfortably meet the equivalent of the annual electricity requirement of every home in Wales and would produce the cheapest electricity of all new capacity at £7.80 per MWh over its 120 year life.

There is further potential for tidal lagoons in Colwyn Bay,  West Cumbria and Bridgewater,  not only producing clean and reliable electricity and sustainable green jobs but also vital coastal protection. Developing a tidal lagoon industry in Britain would make us world leaders in a technology that could be exported to France, Canada, Mexico, India and elsewhere. But such an ambitious programme needs direct public investment in publicly owned and democratically controlled local and regional energy generation and distribution to really get off the ground.

Despite the fact that some of the key trade unions and sections of the Labour Party still need to be weaned off their infatuation with the nuclear industry, it is clear that the tide of opinion (pun intended) is turning. In his speech on alternative models of public ownership in February, Jeremy Corbyn said ‘The neoliberal ideology that drove the privatisation frenzy forgot a key lesson that’s understood even by conventional neoclassical economics; that where there are natural monopolies, markets fail.’

‘But’, he went on to say, ‘Labour’s plans are responding to an even bigger market failure than natural monopolies. We need to take back control of our energy system because, as Nicholas Stern described, “the greatest market failure the world has seen” is climate change.’…

’A green energy system will look radically different to the one we have today. The past is a centralised system with a few large plants. The future is decentralised, flexible and diverse with new sources of energy large and small, from tidal to solar.’ …’and there are many benefits, not just in cheaper energy, an end to fuel poverty, cleaner air, and a sustainable planet, but also in the creation of new good jobs and industries in renewable energy and green tech across the country.

‘In short, to go green, we must take control of our energy.’

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