Hinkley nuclear delay unlikely to impact UK in short term

The progress of renewables and storage, and a drop in power demand since 2007, when the plant was first planned, mean projected delays in the Hinkley Point C project will not threaten UK energy security in the short term, according to EnAppSys.

The energy market monitoring consultancy told Power Engineering International that while the 3.2GW the nuclear power plant will provide on completion will be absent from the system for at least eight years longer than planned when the project was first given the go-ahead, at first there will be little impact.
Hinkley Point C construction worker and excavator
“In the short term, this delay in extra baseload capacity from Hinkley Point C is unlikely to cause major problems in supply. National electricity demand (~34GW per hour, on average) is lower across the year than in 2007 (~40GW per hour) when the Hinkley C project was instigated,” Phil Hewitt, director at EnAppSys said. “Renewable generation is also playing a larger role than it was in 2007. The increase in the wind fleet, coupled with the large solar build-out in 2016, have led to combined wind and solar generation producing, on average, 18 per cent of GB generation per half-hour settlement period in the first six months of 2017.”

However in the long term it is difficult to avoid the conclusion that the delay to the project will increase energy bills for the British public as well as adding emissions.
The new projected completion date means that the station will come online after the existing stations at Hartlepool, Heysham 1 and Hinkley Point B are scheduled to close, with a combined loss of 2.2 GW from the system.

“Torness, Dungeness B, Heysham 2 and Sizewell B are currently scheduled to still be running at that point, but if further baseload power is still required, to fill any gap that Hinkley Point C would have, it will have to be procured from thermal units,” says Hewitt. “This will either be from the extension of existing plant, or the creation of new capacity via long-term Capacity Mechanism contract(s). This would increase GB CO2 emissions versus those if Hinkley Point C were active.”

Hinkley Point C was also guaranteed a strike price of à‚£92.50/MWh hut Hewitt points out that power prices have since fallen, as have the costs of renewable technologies and batteries.

“The longer Hinkley Point C takes to be built, the more expensive it may become in comparison with other generation types. Given the trends in reduced demand and increased utility of renewable generation, the country may be able to manage without Hinkley Point C for a while longer.”

Meanwhile the World Nuclear Association‘s press spokesperson told PEi that EDF’s statement on the costings was in line with their transparent and accountable approach to the project, before adding some context as to the likely impact of delays.

David Hess said, “For people outside of EDF and industry number crunchers, the points of interest are that the CfD and strike price for HPC remains unaltered, and the companies still expect to hit their milestones as long as construction gets underway next year. This does not affect what is paid by consumers, rather it means that the company now expects to generate less profit from the project. At 8.5 per cent IRR it is still, presumably, very profitable.”

“There is an increased risk of a construction delay, which the company will no doubt seek to avoid. If the potential delays happen then the IRR goes down to 8.2 per cent. So it is still profitable and the UK public still do not end up paying any more than was fixed by the CfD.”

Last year, outgoing CEO Vincent de Rivaz told the Daily Telegraph, “We have forensically identified the risks that always exist on a large industrial project and we have taken action to address all of them. We have learned the lessons from Flamanville and Taishan. We will be transparent and accountable for the way we deliver safely and on time and on budget, and how we continue to address the risks.”

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