Hinkley Point C is a crucial capital investment that will secure lower cost electricity
Investment in Hinkley Point C - the first new nuclear plant to be built in the UK in 20 years is set for final approval on Thursday 28 July 2016. Professor Martin Freer, Director of the Birmingham Energy Institute and Dr Jonathan Radcliffe, Senior Research Fellow in Energy Storage, University of Birmingham, respond to today’s debate between French Utility, EDF, who will be financing most of the £18bn project.
Professor Martin Freer, said:
‘This is an exceptionally important decision for the future of the UK power generation infrastructure. Without Hinkley Point C and its successors, for example Sizewell C, there was going to be a very substantial hole in the UK’s generating capacity. Though the upfront costs are high, this is a crucial capital investment that will secure lower cost electricity over the operation of the HPC plant, which will be the next 60 years, and through the associated civil build project provide much needed stimulus to the UK economy. For those of us who have been holding our breath over the last few months, this is a moment for a sigh of relief.’
Dr Jonathan Radcliffe, said:
‘After years of technical, regulatory and financial wrangling, there was simply too much at stake for British and French Governments to let this deal unravel. The reasons are complex, but it is symptomatic of the energy policy muddle we have experienced for ten and more years. Government has been dipping in and out of market interventions almost at random, and has done a deal here which future bill-payers, not tax-payers, will cover. When assets such as Hinckley Point C will last for 40 years, we need a more strategic approach to re-designing energy markets that are appropriate for low carbon (and low marginal cost) generation, and incentivising reductions in demand. Business models which rely on selling more units to make more profit may not be viable in the long term. The new Department for Business, Energy & Industrial Strategy must look to the future: how will the energy system and markets drive, or respond to, a massive take-up of electric vehicles, and decarbonisation of heat (partly through electric heating) through the 2020s, with the introduction of new ‘smart’ technologies like energy storage.’