And by massive costs – even during the planning stage.
By Gregory Brew, Oilprice.com:
The drama of Britain’s stalled nuclear facility at Hinkley Point C grew more Shakesperean this week, with the Chinese firm involved in its construction now under investigation in the United States for espionage.
It was announced on August 11 that the Chinese CGN firm and engineering advisor Szuhsiung Ho have been indicted on charges of industrial espionage in the United States. The charges relate to alleged attempts to steal nuclear secrets to aid the Chinese nuclear energy program.
The power plant at Hinkley Point, a joint UK-French-Chinese venture, has been at the center of an on-going debate in the UK over the future of the country’s energy infrastructure, its relations with China and its place in the world post-Brexit. It has also emerged as the first real test of Prime Minister Theresa May, who leads Britain in the aftermath of the vote to leave the EU last June. More broadly, the issue has drawn focus onto the expanding economic influence of China and the possible political consequences this might have world-wide.
Britain’s nuclear energy program supplies 21 percent of the country’s power and has been hyped by the country’s Conservative Party as a key component in the long-term plan to reduce carbon emissions. To pay for the plant, the previous government under David Cameron agreed to a subsidy program which would pass the cost of construction onto consumers, charging a premium for cheaper power.
The £18 billion project is projected to provide 25,000 jobs in its construction and 900 permanent positions once it is up and running. The huge facility could supply 7 percent of Britain’s projected energy needs over a 60-year timeframe. Given the current set-backs and that anticipated rate of construction, the plant would not begin generating energy in commercial quantities until 2025. Britain is in dire need of a long-term energy plan that conforms to the Paris Agreement on climate change, and its current infrastructure is dependent on coal-firing plants and older nuclear facilities scheduled for de-commissioning.
Critics have balked at the costs and the long construction time it will take to get the facility up and running. There are also safety concerns with the form of nuclear power to be deployed at Hinkley Point. And then there are the more nebulous political concerns. An uncertain future in Europe after the June Brexit vote means the British partnership with France might prove less attractive in the long term, and there remains a great deal of suspicion in Britain over the involvement of the CGN firm, and the concern that China will use its stake in the British power plant for strategic purposes.
In early August Prime Minister Theresa May requested more time to review the project, catching both French and Chinese firms by surprise. EDF, which has seen its earnings decline and is counting on the Hinkley Point project for its future plans, was placed in a more difficult position when the French government sided with labor unions and requested an additional review of the project. EDF is constructing the reactor to be used at Hinkley Point, a complex EPR-style reactor that is difficult to construct. Another EDF project at Flamanville is already years behind schedule.
EDF was attracted to the Hinkley Point project due to the high price it could charge: £92.50 per megawatt hour of electricity generated, roughly double the current market price.
CGN, meanwhile, condemned the delay and insisted that the decision marked a key turning point in UK-Chinese relations. CGN agreed to take on one-third of the costs, while EDF provided the remaining two-thirds and Britain the labor. The agreement had been part of a highly-publicized attempt by David Cameron’s government to attract Chinese investment in British infrastructure.
The Chinese have cited a “gentleman’s agreement” made with the Cameron government over two future nuclear facilities to be constructed in Essex once Hinkley Point is completed. There is therefore evidence that China hopes the facility will act as a launch-pad for other projects in England and elsewhere.
With Britain’s post-Brexit course uncertain, some experts have urged caution, warning that the decision to go ahead with Hinkley Point could make Britain more reliant on China for its energy and trade. These concerns are growing world-wide as China enhances its global position and attempts to gain influence through investment projects. Wary of Chinese influence, Australia recently followed Britain’s example and cancelled a £6 billion deal leasing its energy grid to Chinese investors, citing “national security” concerns.
Environmental and clean-energy advocates have been against the project, with some arguing that wind and solar power offer a more immediate, cheaper alternative to the power generated by Hinkley, at a fraction of the cost.
Dong Energy, the wind-farm developer which has committed to investing 6 billion in Britain, claims that new wind-farms could provide the same amount of energy as Hinkley at a lower cost. The Hornsea Project One, currently in development, would produce 1.2 GW of power from 170 turbines. While wind-farms produce energy near the £100 per MWH threshold, some in the industry have argued that costs will drop below £80 by the 2020s.
With political pressure mounting, it remains to be seen how May or the British government under her leadership will handle the debacle surrounding Hinkley. If the project were canceled it would be a further indication of how nuclear power is unlikely to provide the needed power to replace fossil fuels, a need which Great Britain in particular is vulnerable to, as its coal-fired and older nuclear power plants gradually shut down over the next decade. By Gregory Brew, Oilprice.com
The cancellation of Hinkley Point could crush EDF and the French nuclear industry – or is Britain’s move a Brexit negotiating ploy? Read… China Furious, French Energy Giant Desperate, as UK Stalls $24bn Nuclear Deal
Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:
Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.
A confidence inducing turn of phrase little different from Herbert Hoover’s, “The economy is fundamentally sound … ”
“Chinese-made nuclear reactor … “
“Chinese-made nuclear reactor … “
It sounds bad, but then one has a look at the US Hanford site and the Washington CGS reactor, an ageing GE MKII reactor sitting on top of a massive fault complex that makes the San Andreas fault look like a toy.
They mis-placed the last big earthquake 100miles further away to justify building there, and fail even to meet the lower 0.25G quake safety standards that were invalidated when the fault systems true magnitude was discovered.
Then after Fukushima’s GE MK1s exploded (due to the containment of the BWR being too small) then decided to add hard vent pipes from the GE MKI and MKIIs in the US (35 remain) to vent the containment straight to atmosphere.
NRC engineers explained that they needed radiation filters, but the operators said that would be too expensive so they are straight pipes.
So when Washington state has it’s next 7+ quake the CGS reactor there (GE MKII) will either explode and vent, or just vent through the new pipe; straight to atmosphere as it melts down, polluting much of north america and Canada with fallout.
Remember reactor #1 at Fukushima melted before it should have done due to direct earthquake damage – not the later tsunami.
So the phrase that should induce shivers and worry is ‘ageing US made nuclear reactors’….
Two oxymorons:
– A gentleman’s agreement (i.e. no agreement) to be fulfilled by a woman.
– charging [consumers] a premium for cheaper power.
And a real howler:
A ‘budget’ for a nuclear project 9 years away. £18 billion will probable end up covering the studies, additional reviews, and permit applications.
” charging a premium for cheaper power. ”
YES and they will put no money aside
for disposal of waste NOR Clean up of site
when the site reaches its end use.
And of course China will get access to the intellectual property
which of course they will steal.
.
. idiots.
.
. Short term gain for Long term loss
As CLinton Says: What does it matter ( I will be out of
office with my pockets filled by the time they realize it).
.
.
Theresa May is turning into the next Iron Lady.
Nicko
Excellent news that the UK has a strong leader in Theresa May
Yet I enjoyed most of all Steve from Virginia
Herbert Hoover’s, “The economy is fundamentally sound … ”
“Chinese-made nuclear reactor … “
I got USB Caddy direct shipped from China last week. It didn’t work I got my money refunded by Ebay yet why do they make such shoddy things?
Margaret was my hero[ine]. The best British PM ever … no BS, just action.
A couple of hundred years ago, British and American merchants FORCE opium onto the Chinese people. The opium was cheaply grown and processed in India/Pakistan and then sold to the Chinese peasants.
This caused rampant agony, addiction, pain, abortions, prostitution, child neglect, child pain, child abandonment…………….
The Chinese Nation and People want REVENGE….and the stupid British don’t see it.
Can I be a victim too. please? Just sayin’ humans have choices in stuff like this and local governments can help lead or they can become part of the problem. Could be a cultural thing, even.
So please……… enuff bs
After poisoning the Irish Sea with nuclear waste, one would think the British would want to totally abandon the nuclear energy option, especially since it is really unnecessary now.
It is a shame Briton’s elite, like America’s elite, have so much difficulty choosing to serve the publics best interest over the financial interests of the owners of stranded old energy investments.
I’m a Brit and unconvinced Hinkley Point will go ahead. I too see some shades of Thatcher in our incoming PM. The hope, for me, with our latest PM is that she apparently holds Neville Chamberlain in high regard. The great reformer laid the foundations to create an industrial powerhouse in England’s Midlands. Thatcher had many virtues – including tackling difficult decisions head on and making the decisions which seemed to offer the best long term rewards. However, Thatcher was also somewhat anti-industry. PM May so far *seems* to have something of that same Thatcher backbone but I am hoping she is far more pro-industry. It is all very well for the UK to have a top tier financial services “industry” but come the global financial day of reckoning that isn’t going to count for much! (We definitely need other things to help drive our economy!) IMO the future cash stream earmarked for Hinkley would be much better allocated helping to build “alternative technology” infrastructure. Britain has immense natural wind, wave and tidal reserves which we would be crazy not to develop. We also have a great history working in deep water (from the North Sea oil/gas industry) – which is essential to doing anything offshore. There would seem to be a great opportunity for the UK to go for broke in substainables – building energy infrastructure for the UK and industries which other countries need. I doubt the Chinese would be irritated with the UK for long if we did some joint ventures in that area, rather than in nuclear. Bulk energy storage technologies are likely to mature in the next few years and at that point the opportunities become very ripe for alternative technology. The UK could exploit those opportunities better than most. FWIW if you can access it, there is a very good article in the UK’s Telegraph – http://www.telegraph.co.uk/business/2016/08/14/britains-vast-national-gamble-on-wind-power-may-yet-pay-off/