Concrete is about to be poured at Hinkley, but future nuclear projects are beset with problems
Back in 2007, the chief executive of EDF Energy, Vincent De Rivaz, declared that by the winter of 2017 he hoped to be able to roast his Christmas turkey in Britain with power from a new nuclear plant at Hinkley C. Now that the process of the UK’s departure from the EU is about to kick off, the Frenchman may be rather less keen on shifting his festive celebrations across the channel in a few months’ time. But given the first concrete is only just about to be poured at Hinkley, that would probably be just as well.
Despite the painfully slow progress, however, the start of construction work on the new £18bn plant in Somerset marks a huge achievement for a project that has been mired in difficulty and delay.
EDF put off an investment decision time and again over the course of five years before giving the plant the go-ahead last July; a move that led one of its board directors to resign, suggesting the scheme could bankrupt EDF. The power plant then found itself on the receiving end of a further six-week delay while newly appointed prime minister Theresa May unexpectedly reviewed the scheme amid concerns believed to relate to Chinese investment, with China General Nuclear having a 33.5% stake in the project.
While the latter stages of this drama unfolded, a raft of consultants and contractors carrying out preparatory works for the scheme were caught between EDF privately urging them to press ahead, and fear of being hit financially if the scheme stalled further.
So the start of the build programme should be met with celebration by all those involved in this most torturous of projects. But instead, the moment stands to be overshadowed by a string of problems emerging with the projects that were meant swiftly to follow Hinkley, to form the UK’s much-heralded new generation of nuclear power stations.
Toshiba, which is behind the next scheme due off the blocks – the £10bn Moorside plant in Cumbria – is in financial crisis. It has been forced into a $6.3bn write-down on problems at its US nuclear division, Westinghouse, and wants to sell its stake in NuGen, the firm building Moorside, before the plant is constructed. NuGen insists this won’t affect the scheme’s development, but the situation is clearly being closely watched by those wanting to work on the project. It also raises questions about the scheme’s reliance on the Westinghouse-designed technology currently lined up for the reactor.
Meanwhile, over in Anglesey, developer Horizon has made clear it needs further funding before it can go ahead with its £10bn Wylfa plant. The boss of its Japanese parent company Hitachi last year said he had been “spooked” by the commercial terms of the Hinkley deal.
Layered on top of this uncertainty is a host of difficulties faced by other reactor projects around the world, most notably EDF’s Flamanville project in France, and fears that economic uncertainty around Brexit will spur further caution among investors. So, not surprisingly, proponents of the new fleet of nuclear power stations – and those lined up to work on their construction – are now starting to conclude that the government ought to act much more directly than it has so far to propel the projects forward. In short, invest in the building of the schemes, rather than just guaranteeing the future price it will pay for the power the plants generate. Given pressure on public coffers, and the divisive nature of nuclear technology, the government may well want to skirt around such a move – for political as much as financial reasons.
But the government has long committed the UK to nuclear energy, believing it to offer an integral part of the UK’s future energy mix. And so it needs to do what it takes to secure the pipeline of projects. Although the economic and political backdrop has shifted hugely from when a new generation of power stations was announced, nothing has changed the fact that the UK needs to act now to secure its future energy supply.
There are real concerns that the overriding complexity of the Brexit negotiations will blunt Whitehall’s ability to focus on anything other than the process of leaving the EU. But the prime minister has said repeatedly she wants leaving the EU to be followed by a more secure future for Britain, economically and socially, and that means having the physical infrastructure to match.
A power station will take at least six years to build even from the point it gets the green light – and that point took Hinkley a decade to reach. If the UK delays now, it will be feeling the effect for years to come.
Sarah Richardson, editor