China’s threat to boycott Britain’s insane nuclear plan is wonderful news
10 June 2020 •
The Hinkley Point C plant in Somerset no longer makes commercial sense as offshore wind delivers power at less than half the price
It no longer makes any commercial sense to build large nuclear plants ever again in Britain. They are prohibitively expensive.
Reactors are being shut down across the US despite Herculean efforts by the Trump administration to save the industry. One reactor at Indian Point in New York closed in April. Its sister unit will go next year.
Construction of the V.C. Summer project in South Carolina has been abandoned after $7bn of sunk investment. The state governor says the misadventure will cost the average household in Horry County some $6,200.
Reactors have been zero-carbon workhorses since the 1950s but trying to meet post-Chernobyl and post-Fukushima safety demands has priced new models out of the market.
New nuclear cannot compete in the US with cheap shale gas. It cannot compete in the UK with this island’s particular bonanza: limitless wind on the Dogger Bank and the shallow waters of the North Sea, backed by galloping cost gains in energy storage.
Britain’s nuclear expansion plan is therefore lunacy, and China’s threat to walk away is an unexpected Godsend. It frees the Government from an irksome commitment made years ago in an entirely different energy landscape. “It is a get out of gaol card,” said Tom Burke, chairman of E3G and a professor at Imperial.
Ambassador Liu Xiaoming has linked nuclear power to Britain’s decision on Huawei’s roll-out of G5 mobile: “a litmus test of whether Britain is a true and faithful partner of China”.
He is inadvertently confirming that the Guangdong nuclear company CGN answers to the Chinese state, an arm of geostrategic policy rather than a commercial venture seeking only profit.
This is what Washington has long argued. It placed CGN on its export blacklist in 2018, accusing the firm of trying to “acquire advanced US nuclear technology and material for diversion to military uses in China”.
I do not wish to revisit the long saga of Hinkley Point. The original venture made some sense in the late Blair era when it seemed as if the industrial revolutions of Asia would lead to a global energy crunch, and few had any inkling of the breath-taking falls in renewable costs that lay ahead. The logic has deteriorated ever since.
When the deal was signed in 2013, the Chinese were brought in to help EDF finance Hinkley and a replica to follow at Sizewell, because nobody else would touch the project.
The quid pro quo was that CGN would later build its own plant at Bradwell B in Essex and others after that, advertising its HPR 1000 pressurised water reactor to the world. It was a Faustian Pact bound with China, with consequences stretching into the middle of the century.
“Getting Britain to say it’s good enough for them is a way of saying it’s good enough for the rest of the world. It legitimizes their technology. But you wonder why they bother since the world market for reactors doesn’t exist,” said Prof Burke.
Ex-EDF director Gérard Magnin once once said Hinkley was “a way to make the British fund France’s nuclear renaissance” and lock them in for 35 years. Indeed, but it has also become a nightmare for EDF itself. Costs have ballooned to £23bn (in the fine print). The project is repeating the disaster script of EPR reactors at Flamanville in France and Olkiluoto in Finland.
“EDF know they can never make money out of it,” said Professor Steve Thomas, a nuclear expert at Greenwich University. “We would be doing them a kindness to pull out so they can concentrate on extending the life of their reactors in France for another twenty years. There would have to be a political sweetener to save face.”
If China pulls the plug, it clarifies the issue. We can bin the whole misguided notion of nuclear expansion and look to cheaper, cleaner, safer, and quicker sources of power.
Hinkley Point strike price is £92.50 per MWh (2012 prices). The latest auctions for offshore wind on the Dogger Bank have come in at £39.65 and £41.61. In 2015 they were £117. Such is the miracle of scale in a nascent technology.
It does not take an eternity to build North Sea wind farms. The towers are shipped in six-packs from the Siemens Gamesa blade factory in Hull to the Hornsea field 70 miles offshore and installed along with the blades in a single day. The next day the system is switched on. The power feeds into the grid. Bingo.
Even if the UK had no net-zero climate target, wind would still be the cheapest way to generate the UK’s future electricity. The Government is targeting 30 GW of offshore arrays by 2030. The Committee on Climate Change wants 75 GW by mid-century.
It is by now our national endeavour, as it should be since the North Sea is arguably the best offshore wind resource in the world, an energy Arabia on our coast. Wind will become the backbone of the system, with power to spare for the production of green hydrogen, to be used in home heating, steel, cement, and ships.
The giant 10 MW turbines coming to the Dogger Bank will have an average capacity factor of 63pc, thanks to hi-tech blades that pitch into the wind, operated remotely from digital hubs. The International Energy Agency says this is “comparable to baseload technologies” and matches the capacity factor of gas plants in Europe or China. Big Wind can now raise equity and debt at a lower cost than Big Fossil. The virtuous circle is accelerating.
Back-up is still needed to cover intermittency but it will come from gas – clean hydrogen in the future – not from nuclear. Big reactors cannot be dialled up and down quickly to match needs. Increasingly it will come from digital demand management. “It is software engineers that matter now, not nuclear engineers,” said prof Burke.
It will come from idle electric vehicle batteries at peak times, and from such new technologies as cryogenic compressed air that can be expanded exponentially at marginal cost to cover weeks of supply – already competing toe-to-toe with shale gas in Texas.
Energy storage is the new darling of hedge funds and private equity. The ARPA-E programme of the US Energy Department is all over it. So are the best labs in America. Tumbling costs will enable wind to deliver to 24-hour constant power at competitive prices long before Hinkley Point delivers its first volt.
There are no meaningful limits. WindEurope says the UK has 80 GW of easy pickings in the North Sea and the Irish Sea, even setting aside zones for marine ecosystems, ships, etc. It could export power on a non-trivial scale to Europe through existing interconnectors, helping to plug the UK’s trade deficit.
So my answer to Ambassador Liu Xaoiling is that threats to withdraw from obsolete nuclear projects are scarcely going to make us tremble.
We seek cordial post-Brexit trade ties with China – on sovereign terms, by Smithian rules – and if Chinese companies want to play a bigger role in Britain’s offshore venture, they should be welcomed with open arms.
But if the UK is forced to pick between America and China in the new dystopian order, it should be obvious that historic ties and deep economic links will cause this country to pivot hard towards our democratic ally.
How hard depends on how hard Beijing chooses to push.