NNWE comments on Energy Costs APPG meeting

NNWE report and comment on UK Parliament All Party Parliamentary Group meeting on Energy Costs with Dr Nigel Knee, EDF Energy 

Last week, NNWE attended a very interesting meeting of the All Party Energy costs group in the UK Parliament. Addressing the meeting was Dr Nigel Knee, Head of Nuclear Policy at EDF who came along to justify the costs of Hinkley Point C and its generous CFD. Dr Knee started off with a tour d’horizon of the changes in energy generation over the last forty years and the challenges ahead particularly the move away from fossil fuels. His argument was that ultimately future energy generation lay with gas, renewables and nuclear; a sentiment not many can disagree with. Taking that as his basis for the future, he compared the costs of the various sectors, making the point that onshore wind and solar didn’t have a great future. He also made the point that of course both technologies are highly intermittent and pointed out that the last few high pressure winter weather days in the UK would have seen some of the lowest levels of wind and solar generation at a time when energy use is at its greatest.

Dr Knee then talked about the development of Hinkley Point C and particularly the deal signed in October 2015 bringing Chinese investment into the UK nuclear power sector. One interesting point to note was that Bradwell will be majority owned by the Chinese Nuclear Power Company (CGN) which means that they will be using their own imported technology and expertise.

He finished his presentation with an impressive array of photos showing various stages of the construction of a nuclear power station and the technologies that will be used at Hinkley, essentially making the point that the planning and construction of a nuclear power station is a huge and very time-consuming undertaking, hence why the costs are so great. The latter part of the presentation was clearly an attempt to justify Hinkley’s costs and combined with the financial comparison with offshore wind that he also mentioned, it made for a pretty convincing argument.

Dr Knee then faced some challenging questions, not least from well known energy analyst Peter Atherton who questioned some of Dr Knee’s future energy costs assumptions. After a fair bit of to-ing and fro-ing between them, trading statistics and cost scenarios, Dr Knee said that perhaps ‘they ought to agree to disagree’.

Despite claiming that 60% of Hinkley Point C’s construction value will come from British companies, when challenged on the likely UK supply chain content for Sizewell and Bradwell Dr Knee was unable to answer as he said that no decision had been made. This is probably true but it does demonstrate how the UK government has let the Chinese nuclear sector enter the UK market with absolutely no guarantees of what the UK nuclear sector will get out of their construction of Sizewell and Bradwell in particular.

Certainly, it backs up the point that welcome as Chinese investment is, the entire UK nuclear sector should start lobbying the UK government now to ensure that there are strings attached and that the  Chinese are ‘good neighbours’. One of the principal conditions for the most likely large subsidy given to develop the two nuclear power stations should be a very high percentage of construction value from the UK; certainly at least the equal of if not greater than Hinkley’s 60%. A lot of public acceptance of subsidised new nuclear is based on the benefit to the UK economy; ignoring that will not guarantee a future for new nuclear wherever it is built.