Hinkley Point C mothballed

Nuclear Monitor Issue:

#810

4495

09/09/2015

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Article

More delays are being predicted for the Hinkley Point C nuclear project − originally expected to be generating electricity by Christmas 2017. As revelations emerge that the site has been effectively mothballed since July 1 this year, the Stop Hinkley Campaign is calling for the project to be cancelled now, rather than waiting for its slow death.

Hinkley C is now delayed by more than five years, and will probably be delayed further according to Alan Whitehead MP. The Government wants 35% of UK electricity to be supplied from nuclear by 2028, so all the other sites will have to be magically completed by then. "Not a snowballs chance in hell that all this will happen", Whitehead says.

Instead of a complete nuclear programme by 2025, the likelihood is that there will be one plant and maybe not even that operational at that point. Time, you might think, for a plan B. What about filling the low carbon generation gap with much more easily deployable, speedily buildable, better financeable renewables? Oh, we've just taken most of those programmes out and shot them. Bit of a mess then, really.¹

Recently the media was predicting that David Cameron and China's president, Xi Jinping, would sign a deal at a meeting in the UK in October which would signify that a Final Investment Decision on Hinkley Point C had been made. The Chinese are expected to fund two thirds of the scheme.²

However there has been a chorus of voices calling for Hinkley C to be cancelled, or at least re-examined.³ Paul Massara, Chief Executive of RWE nPower said nuclear was "an expensive mistake".⁴ A Daily Telegraph editorial said "there is a risk of being lumbered with a white elephant under current plans. Amber Rudd, the energy secretary, needs to reassess them before committing taxpayers to what may be an unsustainable project at Hinkley Point."⁵

Peter Atherton of Jefferies Investment Bank calculated that we could build around 15 gas-fired power stations replacing the whole thermal generation fleet for the same price.⁶ HSBC Energy Analysts said Hinkley is becoming harder to justify and there is ample reason to cancel the project.

And the Chancellor's father-in-law, former Conservative Energy Secretary Lord Howell of Guildford, described Hinkley as "one of the worst deals ever for British households and British industry". He told the House of Lords that while he was personally "very pro-nuclear", he would "shed no tears" if the "elephantine" scheme was to be abandoned "in favour of smaller and possibly cheaper nuclear plants a bit later on".⁷

Perhaps all of this had something to do with Amber Rudd launching a project to examine the actual cost of electricity generation − including not just the cost of constructing offshore wind farms, for instance, but also of connecting them to the national grid. It will also examine nuclear power and conventional energy. The study is being conducted by Frontier Economics, the consultancy chaired by former Cabinet Secretary Lord O'Donnell.⁸ Although this might also have more to do with the Tories ongoing attack on renewables. One source told the Daily Mail: "We might conclude we need less renewable energy than we thought because there are other ways of doing it cheaper – by using technology to reduce consumer demand, for instance".⁹

Now the Construction Products Association (CPA) is predicting that the start of the main works on the nuclear site will be delayed until 2018.¹⁰

Mothballed

Two recent articles in Click Green and Professional Engineer indicate that Hinkley Point C is now officially mothballed. We already knew that site preparation work at Hinkley Point C was stopped in April 2015, up to 400 construction workers were laid off, and the Final Investment Decision was delayed until the autumn.¹¹ What wasn't clear at the time was that NNB Genco – the consortium planning to build the reactors which consists of EDF Energy, China General Nuclear Corp and other investors − put a cap on future spending on the project.¹²

On July 1 the site entered Care and Maintenance which means that activity at the site is limited to the management of material stockpiles and water management zones, remediation of asbestos contaminated land and archaeological surveys.¹³

The budget cap seems to have been more severe than the Office for Nuclear Regulation (ONR) was expecting. ONR charges NNB Genco for all the work it carries out to regulate its activities.

ONR says it has taken the decision to suspend the production of future inspection reports until a Final Investment Decision is made. It has also suspended attendance at the local liaison committee – the Community Forum. These suspensions are most likely because NNB Genco no longer has the budget to pay for them, so the consortium will have asked ONR to stop visiting the site to do inspections and stop attending the forum because it can't afford to pay.

In retaliation ONR says it is "monitoring the impact of the budget constraint upon NNB Genco's competency and capability". In other words NNB Genco had better watch out or it will lose its status as an organisation competent and capable of holding a nuclear license.

ONR says its inspectors "continue to engage with the programme of design and safety case activities" related to the start of nuclear safety related construction. Its August newsletter said that further submissions are expected in September this year and the Pre Construction Safety Case related to nuclear island construction was ready for ONR to begin initial engagement at the end of July this year.¹⁴

So while some desk work appears to be continuing all major work on-site appears to have stopped and NNB Genco is so uncertain that the final investment decision will be positive it has asked ONR to stop as much work as possible to save money – even to the point of threatening its own status as a nuclear capable organisation.

Stop Hinkley Spokesperson Roy Pumfrey said:

"With the Chinese stock market in turmoil it is hardly surprising that the construction industry is predicting yet more delays to this £24.5 billion project. But we think the CPA is being overly optimistic. By 2018 the renewable industry will have had another 2 or 3 years of falling costs and innovation, whereas nuclear costs just keep rising and technical problems mount up. Somerset should kick EDF out now so that we can get on with building the sustainable industries we need to tackle climate change, capture the jobs required and transform our energy and transport system into one over which communities have more control."

Alternative view

The Western Daily Press (August 26) gave an alternative view. It said EDF Energy played down the ONR's decision to suspend work on future inspection reports. And they reported some analysts who felt the Chinese financial turmoil would actually make an investment in Hinkley more likely. The newspaper reports that the Final Investment Decision is likely to be made in Paris after the August holidays are over, and then an announcement will be made during Chinese President, Xi Jinping, visit in October. The announcement could even see the President visit Hinkley.

The Ecologist reports that there has probably been some heavy EDF spinning in recent weeks in response to the negative coverage about the HSBC report and other bad news afflicting the Hinkley C project. As part of its media offensive, EDF has also put the word out that it is placing £1.3 billion in contracts to the mainly UK based contractors, and that a deal with China should be finalised within weeks.

So what's the real situation? For a start, says The Ecologist, it would be extremely unwise for the UK to commit any serious money to the Hinkley C project until there is a single example of a working reactor of the EPR design and legal challenges in the European Court have been safely dealt with. So until both of those major obstructions are out of the way, it's hard to imagine any meaningful deal being signed.

Now maybe the government itself has turned against the project altogether. The mood in government is increasingly towards bypassing the Hinkley C project and its failed EPR design altogether, and going straight for the more affordable AP1000 design (which has problems of its own). And EDF is desperately fighting back.

The Ecologist concludes very possibly David Cameron and Xi Xinping will sign a piece of paper in October, but will Hinkley C ever be built? The smart money says no.¹⁵ The Western Morning News said there's a big elephant in the room – Hinkley Point C − and some say the big creature in the room is actually a vast, unaffordable white elephant. When it comes to something as vast and vital as future energy generation, we can't have any elephants stalking around the room.¹⁶

Meanwhile EDF-Areva has confirmed that it will bear the cost of any over-runs associated with the Hinkley Point C nuclear power project. After Olkiluoto, Flamanville and Taishan this represents a big risk for the newly merged French state-owned company as all three of those projects have experienced costly delays.¹⁷

References:

1. Alan Whitehead MP 5th Aug 2015 https://alansenergyblog.wordpress.com/2015/08/05/the-chinese-nuclear-fai...

2. Guardian 4th August 2015 www.theguardian.com/environment/2015/aug/04/deal-to-build-uk-nuclear-pla...

3. See Stop Hinkley Press Release 13th August 2015 www.stophinkley.org/PressReleases/pr150813.pdf

4. Sunday Times 9th August 2015 www.thesundaytimes.co.uk/sto/business/Industry/article1591057.ece

5. Telegraph 12th August 2015 www.telegraph.co.uk/news/worldnews/11796778/Nuclear-warnings.html

6. Guardian 9th August 2015 www.theguardian.com/environment/2015/aug/09/planned-hinkley-point-nuclea...

7. Independent 4th August 2015 www.independent.co.uk/news/uk/home-news/government-under-pressure-to-aba...

8. H&V News 24th Aug 2015 www.hvnplus.co.uk/news/government-to-calculate-cost-of-generating-electr...

9. Mail on Sunday 22nd Aug 2015 www.thisismoney.co.uk/money/news/article-3207201/Energy-review-spells-en...

10. Construction Products Association Press Release 24th August 2015 www.constructionproducts.org.uk/news/press-releases/display/view/cpa-for...

11. Gloucestershire Echo 2nd April 2015 www.gloucestershireecho.co.uk/400-jobs-lost-Barnwood-based-EDF-stops-sit...