Energy. Our modern life, as we know it, depends on it. And it’s never more on the mind of the modern consumer as it is during autumn, when the weather gets colder and nights get longer. This also happens to be the time of year when the ‘Big Six’ energy companies all announce their price change for the year, and the news is predictably grim.
SSE kicked things off with an 8.2% rise on 2012, British gas announcing a 9.2% rise, and now Npower have announced an eye-watering 10.4% rise in their tariffs from a year ago . A blow to consumers it is indeed.
But why the rises? According to Npower COO Paul Massara, the reasons are threefold: Government schemes (31% more tax); rising distribution costs (10% rise); and wholesale energy prices (3% rise). Not exactly reassuring for the ever-tightening purse strings, particularly if you’re now one of the 4.5 million people in the UK living in ‘fuel poverty’. Still, you could live in Sweden, where the average tariff for a kilo-Watt-hour (kWh) of natural gas is €0.11523 per kWh, a whole 2.6 times the UK cost, as of May this year.
Even so, the idea of the UK government announcing a plan to give a French energy producer a guaranteed energy price must sound sickening.
Yet the plan for more nuclear power does just that, as the announcement has been made this week of the economic terms for a new nuclear reactor that will be built at Hinkley in Somerset. Hinkley Point C, as it is referred to, will be on an adjacent site to Hinkley’s two currently operating reactors, and is claimed to be able to produce the same amount of energy as ’30,000 onshore wind farms’, although EDF haven’t made a claim to the actual capacity of the plant yet.
But why, you ask? Surely this is Britain giving up foreign money to the French (and to the Chinese, who will own a 30-40% stake in the plant), just so that we can pay more for our electricity and create lots of environment-destroying nuclear waste while we’re at it?
Not quite. Let’s look at the money numbers first. EDF say the construction of Hinkley Point C will cost £14 billion, which is a lot of money by anyone’s standards. It’s also claimed that the construction of the plant could create as many as 25,000 jobs during construction, and 900 long-term operating jobs. So seeing as job creation has been the government’s number one goal since coming to power, it ticks that box.
In return for this, EDF will receive £92.50 for every Mega-Watt-hour (MWh) they produce over a 35 year period, which could fall to £89.50 per MWh if EDF follow through on a plan to build another reactor at Sizewell in Suffolk.
Compare this to the government’s own estimates that a nuclear plant commissioned in 2013 has a total levelised cost* of £72-93 per MWh. Whilst the initial price paid seems high, further reflection shows that this would seem to be a pretty fair price. It must also be pointed out that the price for the electricity that’s provided is fixed, so although the government ensures that EDF receives their £92.50 per MWh, it will reap back any money EDF receives above the quoted tariff, which could help to reduce energy costs for consumers in the future.
There’s also the question of the timescale of the project. Even if this project is signed off in early 2014 as expected, then we’ll still wait a good 15-20 years whilst the plant is built and commissioned (nuclear plants are notoriously long building projects, because of the safety concerns involved). By that point, the energy sector could look very different to what it is today, especially if oil and gas prices trend in the upward manner that they are expected to. In addition, there is the question of inflation, which will naturally reduce the value of the tariff being paid by the time Hinkley C’s electricity comes onto the grid.
Engineering for the Environment, or in Spite of it?
So why nuclear over renewables? Surely investing all this money into wind, solar tidal etc. would be better than this environmentally damaging rubbish? The rap sheet against nuclear power is long: radioactive waste that stays radioactive for millions of years; the potential for catastrophic accidents such as those seen at Chernobyl or, more recently, at Fukushima; and the fact that uranium ore is non-renewable. All of these questions are valid reasons not to use nuclear. In fact, the entire German nation used these motivators as a decision to rid themselves of nuclear energy by 2022.
However, they have been largely overblown in the popular media, as have the pros for nuclear power: a 1 GW nuclear reactor will produce 30 tonnes a year of waste, whilst a similarly sized coal plant will produce 300,000 tonnes of ash (although ash doesn’t have to be buried for hundreds of thousands of years, that’s still a huge amount of pretty useless waste). Furthermore the incident rate in the nuclear industry per unit of energy generated is the lowest of any major energy generation industry (Markandya & Wilkinson, 2007) and on top of that uranium ore is expected to last more than a century, even with a major growth in its usage (Jewell 2011).
The nuclear decision is largely a question of trust. Nuclear is already a very dependable technology with relatively low operating costs for a low carbon technology (even the best localised costs for wind projects started in 2012 range between £76-111 per MWh, and solar clocks in at an eye watering £145-203 per MWh).
The ability of nuclear power to be a reliable base load type of power generator is also an important factor, considering the UK is rapidly approaching an energy gap and the threat of blackouts increases and unfortunately renewable energy requires energy storage systems in order to provide the same level of supply dependability. As people tend not to be very happy when the lights go out unexpectedly, nuclear is the most reliable low-carbon alternative to fill said gap.
A clean, carbon-free renewable future is the dream of many, including many of us here at the CSCT. However, until then, it appears nuclear energy is part of the UK’s energy future, whether we like it or not.
*Levelised cost is the entire cost of the project, from commissioning and construction to waste disposal and decommissioning, divided by the amount of energy the plant is believed to produce over its lifetime. See this report for more information.
Jewell, J. (2009) Ready for Nuclear Energy?: An assessment of capacities and motivations for launching new national nuclear power programs, Energy Policy, 39(3), pp. 1041-1055. Available through Science Direct (restricted access)
Markandya, A. & Wilkinson, P. (2007) Electricity Generation and Health, The Lancet, 370(9591), pp.979-990. Publicy available