This was originally written for Spiked, who haven’t yet decided whether or not to publish it.
Plans to bring UK nuclear energy out of its torpor were given mild relief last week, as the EU Commission approved the deal between the Government and EDF – the developer of the proposed Hinkley Point power station. The Commission investigated whether or not the deal broke state aid rules, and found that it did not. But when the Somerset turf is finally cut to make way for Britain’s first nuclear power station in nearly 20 years, Hinkley Point will stand as an epitome of remote, self-serving and intransigent political institutions rather than the symbol of technological and social progress that nuclear power stations once were.
New nuclear has been on the table for some time. But years of talks with energy companies and potential developers resulted in them packing up their pitch and walking away, citing expense. With only one developer left in the running, and with the UK government having committed to new nuclear energy as part of its carbon emissions-reduction strategy, it was now held over a barrel. To save itself from embarrassment, the government would underwrite loans for the £16 billion project, and guarantee a minimum price (‘strike price’) for the electricity it produced for the first 35 years of operation: £92.50 per megawatt hour (MWh) – roughly double the current market value.
At such prices, it is no surprise that the private sector was reluctant to get involved or finance Britain’s new nuclear projects. And with such an extraordinary intervention in the pricing mechanism, it was no surprise that the deal was investigated by the Commission for a possible breach of state aid rules. What is a surprise is that the Commission – which estimated that the costs of construction may reach £24.5 billion, and which advised that the price support should be extended from 35 years to the full 60-year lifespan of the plant – did not find much wrong with the UK government’s intervention. People born today will still be paying over-the-odds for the electricity produced at Hinkley Point at the end of their lives. Never mind toxic waste; expensive energy will be the coalition government’s ‘nuclear legacy’.
The cost of the 3.2 gigawatt (GW) proposed Hinkley Point power station is extraordinary. To put it into perspective, a comparison can be made with the gas-fired power station at Pembroke, which opened in 2012. On a unit-for-unit basis, the £7.6 bn per GW Hinkley Point plant is expected to cost nearly 20 times as much as the £400m per GW Pembroke plant. Though the fuel costs of Pembroke are not reflected in such a comparison, even at today’s relatively high gas prices, Pembroke produces electricity for less than half the cost of the proposed Hinkley Point plant. If gas prices were to fall to the prices seen in the 1990s and 2000s, electricity from Pembroke might be produced for as little as an eighth of the cost of electricity produced at Hinkley Point. The gamble on such high energy prices demonstrates that cheap energy is off the political agenda.
The green lobby reacted by complaining about the expense of the deal. “This is a world record sell-out to the nuclear industry at the expense of taxpayers and the environment’, whinged Greenpeace. But people who have campaigned for the abolition of greenhouse gasses and lobbied for expensive alternatives should not throw stones about market distortion and costs to the consumer. The same legislation which gives the operators of Hinkley Point £92.50 per MWh also grants to renewable generators far more generous subsidies. The strike price for offshore wind in 2014/5 is £155/MWh. For onshore wind it is £95. Biomass generators receive £105/MWh. Large solar PV installations receive a very generous £120. And operators of wave and tidal stream generators will receive a whopping £305. Where were Greenpeace’s complaints about government largesse when these prices were announced? The extraordinary Hinkley Point deal needs to be seen in the context of climate change and renewable energy policies.
High energy prices have been established as the norm by policy, not by scarcity. This has been legitimised by arguments that first-of-kind and immature technologies need help to compete with seemingly mature counterparts such as coal and gas. But the categories of ‘mature’ and ‘immature’ technology presuppose that one has reached its terminal point, while the other has more potential to be unleashed. But the reverse may be true: wind energy and the use of wood as fuel are in fact much older, and were largely abandoned by today’s politician’s wiser predecessors. Meanwhile, shale gas ‘fracking’ and the potential recovery of methane hydrates from the ocean floor demonstrate that there is a great deal of R&D left to do in the fossil fuel sector.
But abundant and cheap energy may create environmental problems. On the green view, this creates a tension between human needs and wants and the need for political leaders to address the urgent problem of a changing climate. Climate change may or may not be a problem requiring political intervention. However, there is no need for us to understand it as a problem to see the backwards thinking that has produced the climate and energy policies that now put expensive ‘negawatts’ further up the political agenda than cheaper megawatts. Although each EU member state – and many other countries throughout the world – spend many billions each year on renewable energy subsidies and emissions-reduction, global emissions continue to rise. But what if the tens of £billions ear-marked for the most expensive power station in the world instead went on actual energy research? Entire university campuses could be constructed and funded for just the price of Hinkley Point.
Just a small fraction of the many £billions spent each year on subsidising the extremely inefficient renewable energy sector could finance instead an array of projects like ITER – the European fusion research programme – where currently many countries now share just one. ITER is a good demonstration of political priorities. It is a 35 year research programme, intended to produce a proof-of-concept of sustained nuclear fusion: zero-carbon energy from water, forever. The programme has a budget of around €15 billion, shared between 35 countries – or very roughly €12 million per year, per country on average – barely enough cash to finance a small wind farm.
The budgets for nuclear energy research in the UK are, when compared to the money spent on renewables, mean, to say the least. A 2012 review of UK nuclear energy research found that UK Government expenditure on nuclear R&D was just £66 million in 2010/11 – around £30 million each for research into fusion and fission. The same review found that university research into nuclear energy between the years 2006-2012 was just £269 million — £44 million a year. Again, these sums are barely enough to build a small wind farm.
This is not to say that every last penny spent on renewable energy should have been spent on nuclear R&D. But these sums indicate that the problem of climate change isn’t being taken at all seriously from an R&D perspective. The emphasis on immediate, top-down and restrictive policies – targets, carbon budgets, subsidies and taxes – have yielded no practical benefit, whereas emphasis on energy R&D could have multiplied the number of experimental pathways into all forms of energy, both to mitigate climate change, and expand the reach of industrial energy production.
Investment in R&D, rather than top-down policies might well have delivered benefits that reduced the risks and costs of nuclear energy. There are many reactor designs that could compete on safety and therefore cost. Some designs offer to burn up waste stockpiles in sub-critical reactors. Some designs are modular, allowing easy and rapid deployment. Some are hybrids of fission and fusion. Some operate at low pressure. Some burn substances other than uranium and plutonium. The progress of each design is beset, not by technical challenges, but by political inertia. Rather than making a transparent choice of technique, or investing in such a way as to expand the choices on offer, policymakers were forced by first their own ineptitude, and second by their own intransigence into an expensive and hasty decision: not to save the planet from climate change, but to save their policies from embarrassing failure.
The predictable failure of renewable energy’s promises was the final cue for nuclear energy’s farcical return. The UK’s nuclear energy programme had been abandoned in the 1980s following the environmental movement’s successful mobilisation of public opinion after the Chernobyl accident. Meanwhile, the effect of the ‘dash for gas’ that had begun in the late ‘80s, and which led to low energy prices throughout the 1990s began to ebb away as North Sea gas fields seemed to dry up. In the 2000s, a timid and image-conscious Labour government sought the approval of green organisations, and allowed them to close down any possibility of new coal-fired power station. European emissions directives shortened the lives of existing fossil-fuel-powered plants though the Large Combustion Plant Directive and the Industrial Emissions Directive. Now the UK faced a growing energy gap.
Renewable energy never stood a chance of filling that gap or providing electricity at a reasonable cost. The offshore wind farm at Thanet, completed in 2010, cost £900 million to build for 300MW of installed capacity. But due to the variability of wind, offshore wind farms produce around a third of their nameplate capacity. Thanet therefore cost a whopping £8.6 billion per GW of effective capacity – nearly a £billion more than Hinkley point, but supplying the grid with electricity at three times the market value, netting its operators more than £75 million in subsidies per year.
The rhetoric hailing the return of nuclear exists in stark contrast to the promises about white heat of technological revolution generations earlier. More than half a century since the first civil nuclear reactors produced electricity, Britain’s political leaders struggle to establish the lowest possible expectations for the highest possible price: keeping the lights on and tackling climate change.
Back in the 1950s, a year before Britain’s first nuclear power plant opened, ministers from the six member countries of the European Coal and Steel Community (ECSC) gathered at Messina, Italy. The ECSC met to set out the priorities that would become the foundations of the European Economic Community, and later the EU. Amongst the three major objectives that were essential ‘to improve steadily the living standard of the population’, the conference agreed that ‘Putting more abundant energy at a cheaper price at the disposal of the European economies constitutes a fundamental element of economic progress’ and that ‘The development of atomic energy for peaceful purposes will very soon open up the prospect of a new industrial revolution beyond comparison with that of the last hundred years’.
Nearly sixty years of technological development and social progress, however, have taken their toll on the European political elite’s technological ambition and imagination. In 2007, they set out their new objectives. Europe abandoned the Messina Declaration’s objectives. “Energy is essential for Europe to function. But the days of cheap energy for Europe seem to be over. The challenges of climate change, increasing import dependence and higher energy prices are faced by all EU members.”
It may seem a radical proposition: if policymakers eschew the principle of cheap energy, might cheap energy become that much harder to find? Does the fact of Europe declaring that ‘the days of cheap energy for Europe seem to be over’ not establish expensive energy as a political priority, and shift the emphasis of public organisations and publically-funded research away from the discovery of cheap energy? Might this not explain why ITER and nuclear research are so poorly-funded, in spite of what so many politicians have described as a ‘planetary emergency’ and ‘the biggest challenge ever facing humanity’?
Whether or not climate change is happening, the tension between the necessity of dealing with it and wanting cheap energy is one that politicians have used for their own ends: to secure themselves and their institutions against the public’s wishes. The promise of abolishing coal, and supplying the UK with green energy may occasionally raise a standing ovation from the zombie faithful at party conferences, but most people just want there to be reasonably-priced electricity when the light switch is flicked. Accordingly, the problem, as policymakers conceive of it, is people, not the climate. Hence their preference for ‘behaviour change’, demand-side management, ‘efficiency’, and the imposition of limits, targets and subsidies, while eschewing innovation and the notion of economic development with it. The growing expense and decreasing reliability of electricity infrastructure throughout Europe is not merely a symbolic reflection of the European political establishment’s detachment from ordinary life; it is its product.
And so it is with nuclear energy now. We can keep our lights on, but only at colossal expense. The expense was caused by policies, which through accidents and by design, established high energy prices and expectations of government support for new capacity. Having established that much, the incentive to innovate, to produce energy for a lower cost and in greater abundance, disappears.
Electricity generation and its delivery are technologies that were mastered many decades ago. Nuclear power was developed not long after. The fuels for these technologies exist in vast quantities, and their quantities are multiplied as the means to extract and use them are developed. The thing that stops the transparent management of resources and their efficient delivery is a form of politics which legitimises itself, to itself, for itself, against us, by problematising such simple things as energy. The more that technical problems involved in life’s most basic necessities – like coping with the climate and producing energy – are made complicated, so the lower the aspirations of politics and the lower the expectations of politicians become.
NB: Comments are automatically moderated to avoid the flood of spam.
In the fourth paragraph, did you intend to say the gas plant was 20 times as expensive as the nuclear plant?
[Well spotted, thanks. Corrected. B.]
‘the days of cheap energy for Europe seem to be over’ It is astounding. The lengths so many have gone to ensure that eventuality… Major projects approved without cost benefit consideration… Similar actions by corporate leaders would most certainly yield criminal prosecutions. Govt. officials have locked in a course, reality be dammed. Legislating CO2 released from the burning of biomass(even if it is shipped from clear cut Forests in North America burned in the UK ) is carbon neutral seems almost sane compared to the 35yr and now possibly 60 year yoke of this nuclear power strike price.
Perhaps one way to see this is that both the ridiculous policies associated with so-called climate change and the present state of nuclear are all facets of a stone called stupid.
I do not understand why small nuclear plants such as the ones that power submarines and aircraft carriers are not considered, our own Rolls Royce at Derby manufactures some, I sure they could be installed in a much faster time scale, and a risk of accident would be on much less dangerous scale.
I find having a mix of gas, coal and nuclear a sensible idea.
Check out this article it explains how renewables are not much use (except hydro)