As I suspected would be the case, the UK government last
week went ahead with its plan to approve the Hinkley Point nuclear power
station. I touched on some of the cost issues back in August. But what I
find interesting is that no-one is talking about the demand-supply balance in
the electricity market. UK electricity consumption, for example, declined by
13% between 2005 and 2015, with industrial demand down 21% and domestic demand falling
by 14%, despite all those new gadgets which are now such a feature of our homes.
One reason for this is that EU legislation requiring us to install low energy
lighting has had a significant impact on reducing consumption (the pesky EU!). Interestingly,
domestic output has fallen even faster (by 15%) and imports now make up 6% of consumption,
compared with 2% a decade ago.
The collapse in demand is not just a UK phenomenon – it is evident in Germany too, on roughly the same scale. So why do we need such a costly new power station, particularly since we can get a lot of our energy from renewables? One reason is that the UK has to replace its ageing nuclear capacity and is also committed to phasing out coal-fired stations by the middle of the next decade, so it does need to bring new capacity onstream. Why not from renewables? One answer is that sources such as wind and solar cannot be guaranteed to provide the steady baseload which industrialised societies need.
Germany, for example, which has massively ramped up its renewables capacity over the last decade has experienced periods when there is so much electricity coming onstream from wind sources that other sources have to curb output in order to prevent the grid from overloading. This also means great peaks and troughs in wholesale prices, which play havoc with the planning decisions of utility companies. Moreover, the German government is granting huge subsidies to green energy, but has not been successful in reducing carbon dioxide emissions because at those times when green sources cannot meet demand, the grid has to turn to coal-fired stations.
The argument often used by environmental groups that the planned output of Hinkley could be met by building four large offshore wind farms is arithmetically correct, but it is unlikely to operate at the same efficiency and would thus not be able to meet baseload demand. It is thus illustrative to look back at the British experience with nuclear generation plans to see that much of the over-optimism which accompanied plans for nuclear expansion in the 1970s is being rehashed today. Thirty to forty years ago, the CEGB (which was then responsible for the UK’s electricity output) argued that many of the overruns in completing nuclear plants on time, which was responsible for so much of the cost overrun, could have been avoided if the UK had bought the US pressurised water reactor rather than developing its own. The PWR has always been dogged by safety concerns (Three Mile Island, anyone?). And plans for the European PWR, expected to be used at Hinkley, are experiencing similar concerns. One of the suppliers at EDF’s facility in Flamanville in Normandy, has already informed the French nuclear inspectorate that anomalies have been detected in the nuclear reactor vessel, resulting in “lower than expected mechanical toughness values.”
Such issues contribute to the cost problems associated with nuclear generation. In 1967, the CEGB argued that nuclear could deliver energy for as little as 0.48p/KWh. By 1979 that estimate had more doubled. Today, EDF is being guaranteed a minimum of 9.25p/KWh – roughly double the current wholesale price. One reason for the substantial markup is to allow for the almost inevitable cost overruns: EDF’s Flamanville facility is already six years and three times over budget.
Then there is the issue of importing and disposing of the fuel used in the process. Security of supply used to be one of the main considerations determining whether to choose between coal and nuclear. With no large scale coal mining now occurring in the UK, this has dropped off the agenda as most solid fuel now has to be imported (the UK currently imports most of the uranium used in power generation from Australia). Getting rid of spent fuel is more problematic: High level waste is stored for 50 years at the Sellafield plant in north-west England and it is planned to be deposited in a deep mined geological facility. Unfortunately, no suitable site for such a facility has yet been found. We may enjoy the benefits of Hinkley Point’s electricity today (or more likely tomorrow) but it is future generations which will have to work out what to do with the waste.
The collapse in demand is not just a UK phenomenon – it is evident in Germany too, on roughly the same scale. So why do we need such a costly new power station, particularly since we can get a lot of our energy from renewables? One reason is that the UK has to replace its ageing nuclear capacity and is also committed to phasing out coal-fired stations by the middle of the next decade, so it does need to bring new capacity onstream. Why not from renewables? One answer is that sources such as wind and solar cannot be guaranteed to provide the steady baseload which industrialised societies need.
Germany, for example, which has massively ramped up its renewables capacity over the last decade has experienced periods when there is so much electricity coming onstream from wind sources that other sources have to curb output in order to prevent the grid from overloading. This also means great peaks and troughs in wholesale prices, which play havoc with the planning decisions of utility companies. Moreover, the German government is granting huge subsidies to green energy, but has not been successful in reducing carbon dioxide emissions because at those times when green sources cannot meet demand, the grid has to turn to coal-fired stations.
The argument often used by environmental groups that the planned output of Hinkley could be met by building four large offshore wind farms is arithmetically correct, but it is unlikely to operate at the same efficiency and would thus not be able to meet baseload demand. It is thus illustrative to look back at the British experience with nuclear generation plans to see that much of the over-optimism which accompanied plans for nuclear expansion in the 1970s is being rehashed today. Thirty to forty years ago, the CEGB (which was then responsible for the UK’s electricity output) argued that many of the overruns in completing nuclear plants on time, which was responsible for so much of the cost overrun, could have been avoided if the UK had bought the US pressurised water reactor rather than developing its own. The PWR has always been dogged by safety concerns (Three Mile Island, anyone?). And plans for the European PWR, expected to be used at Hinkley, are experiencing similar concerns. One of the suppliers at EDF’s facility in Flamanville in Normandy, has already informed the French nuclear inspectorate that anomalies have been detected in the nuclear reactor vessel, resulting in “lower than expected mechanical toughness values.”
Such issues contribute to the cost problems associated with nuclear generation. In 1967, the CEGB argued that nuclear could deliver energy for as little as 0.48p/KWh. By 1979 that estimate had more doubled. Today, EDF is being guaranteed a minimum of 9.25p/KWh – roughly double the current wholesale price. One reason for the substantial markup is to allow for the almost inevitable cost overruns: EDF’s Flamanville facility is already six years and three times over budget.
Then there is the issue of importing and disposing of the fuel used in the process. Security of supply used to be one of the main considerations determining whether to choose between coal and nuclear. With no large scale coal mining now occurring in the UK, this has dropped off the agenda as most solid fuel now has to be imported (the UK currently imports most of the uranium used in power generation from Australia). Getting rid of spent fuel is more problematic: High level waste is stored for 50 years at the Sellafield plant in north-west England and it is planned to be deposited in a deep mined geological facility. Unfortunately, no suitable site for such a facility has yet been found. We may enjoy the benefits of Hinkley Point’s electricity today (or more likely tomorrow) but it is future generations which will have to work out what to do with the waste.
No comments:
Post a Comment