The Government should scrap its costly Hinkley Point deal and accept renewables can keep the lights on

Will the UK need new nuclear power in 2025?

With EDF’s decision on Hinkley Point C likely to be delayed until next year it is imperative that the government re-assesses the need for new nuclear power in 2025. The exponential rise in renewable power generation worldwide, reported in a recent paper in Nature Materials, has radically changed the electricity supply scene since 2006 when Labour decided for new nuclear. Renewable power has made new nuclear unnecessary in the UK and a possible electoral liability in 2020.

Why does the government think the UK needs new nuclear power?

Energy Secretary Amber Rudd said recently “new nuclear is the only proven low-carbon technology that can provide continuous power”. This statement is demonstrably incorrect in all respects. Until a prototype works, new nuclear remains an unproven technology and the carbon footprint of its construction cannot be accurately estimated. Furthermore, Rudd appears unaware that a number of proven, low-carbon technologies are already delivering continuous power to the UK grid. Data produced by her own Department of Energy and Climate Change (DECC) shows that in 2014 hydropower contributed 1.7 GW to the grid. Also six bio-electricity technologies, all capable of continuous power operation, together produced 4.5 GW of electric power. That is already 6.2 GW of continuous power, nearly twice the 3.2 GW that Hinkley will struggle to produce by 2030.

How fast is bio-electric power expanding?

Bio-electricity could provide ten times 3.2 GW before the first of the two proposed reactors at Hinkley operates. Our analysis in Nature Materials shows that, were these six bio-electricity technologies to continue expanding at the average rate they achieved from 2011 to 2014, they would produce 32 GW of power by 2024. Two of these proven renewable technologies, hydropower and biomethane produced from the anaerobic digestion (AD) of farm and food waste, have the lowest carbon footprints of all forms of electricity generation. The carbon footprint of existing nuclear generators is a matter of considerable controversy in the scientific literature but is probably at least five times higher. The low carbon footprint of AD is well established. If the waste is left to rot on farms or in landfill it produces copious amounts of greenhouse gases.

Will the UK need continuous power in 2025?

Not if renewable installations continue to expand, even at a lower rate than recent years. Flexible, not continuous, power generation is needed to back up wind and photovoltaic (PV) power. The German Kombikraftwerk project, led by Kaspar Knorr a co-author on our Nature Materials article, showed how the electricity demand on a national grid like Germany, or the UK, can be supplied 24/7 all year by 80% wind and PV power. Only about 15% of flexible bio-electric power and 5% storage power back-up are needed. Many bio-electricity generators are capable of flexible operation. The government should be aiming its flexible capacity subsidies at new electricity generators fuelled by AD biomethane rather than polluting fossil fuel generators as at present.

How quickly could the UK get an all-renewable electricity supply?

Not many people are aware that the renewables are already delivering ten times the 3.2 GW of power that the two Hinkley reactors may produce in 2030. Our data predict that, when definitive figures are available for 2015, the total installed renewable power in the UK should be at least 32 GW. Renewable installations in the UK were expanding exponentially before the cuts. The 32 GW figure for 2015 will be a ten-fold increase since 2006. If the subsidies were restored, so renewables continue to expand at the average rates they achieved over the past decade, the UK could have an all-renewable UK electricity supply before 2025. New nuclear power would clearly be redundant.

Did the government make the cuts to protect new nuclear?

This seems likely from the future scenarios that DECC published last November. All their scenarios show renewable power, which expanded 10 times in 9 years, not even doubling in the next 20 years. Amber Rudd explained in November that most of the small renewable expansion in the 2020s would be from offshore wind. Hence, a Tory government has intervened in two highly successful, exponentially expanding markets, PV and onshore wind, aiming to reduce their expansion to zero by 2020 so as not to threaten their top priorities: higher carbon and more expensive nuclear and natural gas electricity.

Why does the government want to protect natural gas electricity?

This becomes clear from DECC’s scenarios for the future wholesale price of electricity. The exponential expansion of the renewable markets has reduced the wholesale price of electricity as Good Energy has shown. Germany has demonstrated that wholesale electricity prices will continue to fall, if wind and PV penetration is allowed to increase. On the other hand, all DECC’s scenarios show the wholesale electricity price rising after 2020. DECC expects the price to be dominated by natural gas costs. Intriguingly, this suggests the government doesn’t believe its own claims that fracking produces cheaper natural gas. The government hopes the wholesale cost of electricity will rise in the 2020s because their nuclear subsidy commits consumers to pay, as a levy on electricity bills, the difference between the wholesale price when Hinkley operates and the guaranteed high nuclear price. The lower the wholesale price the higher the levy and the higher the electoral discontent. Hence it is crucial to government plans for new nuclear that renewable expansion is curtailed so that natural gas can keep the wholesale price high. How ironic for a government claiming to cut the renewable subsidies to protect “hard-working bill payers”.

Will the government succeed in halting the expansion of onshore wind and PV?

This is unlikely, if one looks at the worst performances of the renewable markets over the past decade. Let’s consider a “no-subsidy” scenario that assumes PV and onshore wind expand at half the rate they achieved in their worst performing year of the last decade. Rudd indicated that offshore wind might receive some future subsidies, so assume offshore wind expands with its worst year-on-year increase. In this case, UK wind and PV will total around 88 GW in 2025. This is similar to the 87 GW we estimate Germany had installed by 2015. Hence the wholesale price of UK electricity in 2025 should be around the 2.4 p/kWh (@ 0.77 £/Euro) that Germany achieved in 2015. This should be compared with the current 4 p/kWh in the UK (APX Group UK). On this scenario, should Hinkley start in 2025, Britain’s “hard-working bill payers” will be funding around 7 p/kWh of the guaranteed 9.25 p/kWh nuclear price.

On the 'no- subsidy' scenario for renewables what happens to new nuclear power?

The renewables should reach their targets for an all-renewable UK electricity supply around 2029 on the “no-subsidy” scenario. In an all-renewable electricity supply, wind fluctuations take the wind and PV supply above demand for around half the year. Inflexible nuclear power will then have to compete with cheap, excess wind power for expensive storage. This will add to the cost of nuclear electricity, already higher than the 2029 market price by the cost of the modifications necessary now and even when the prototypes work. These are not covered by the government’s guarantee. For the other half of the year, flexible bio-electricity will supply the back-up. On this scenario, there will be no demand for continuous and expensive nuclear power in the UK in 2029. It could all end up being exported to countries with fewer renewables, like France, at a price massively subsidised by Britain’s “hard-working bill payers”. If Hinkley starts in 2025 with the performance DECC expects, the nuclear subsidy will be around £820M each year on the “no-subsidy” renewable scenario. The subsidy will double should the second Hinkley reactor come on stream around 2030, leading to a total bill, over the 35 years of the guarantee, of £53B, which could all end up supporting low electricity prices abroad. This is a minimum estimate as the guaranteed nuclear price is index linked from now to start-up and for the whole 35 years of operation. DECC predicts the total subsidy will be £4.4B – £19.9B because they hope the natural gas price will rise and the renewable expansion can be halted. The nuclear price guarantee could be a vote loser at the 2020 general election, when it will be clearer how soon the UK will have an all-renewable electricity supply.

Why is DECC unaware of the benefits of exponentially rising renewables?

DECC’s future electricity plans are based on a computer programme “Pathways to 2050” that balances electric energy (kWh) year-by-year rather than electric power (kW) second-by-second as the National Grid must. A nuclear reactor of a certain power will generate around 7 times as much electrical energy in a year as a number of solar farms with the same power. In terms of energy nuclear appears 7 times as useful as PV, justifying the pro-nuclear decision which had already been taken. “Pathways to 2050” cannot explain why in 2014, when only 1% of UK electrical energy came from PV, the wholesale price of electricity fell, primarily due to cheaper PV power. The explanation is that PV power supply is highest around noon, when the daytime power demand and wholesale electricity price are high.

What should the UK government do given EDF’s latest delay?

The government should stop bucking the market, withdraw its guaranteed nuclear price and compensate for the loss of nuclear by backing the cheaper competition. If the subsidy cuts are restored, so that renewable power expands as it has for the past decade, by 2019 we could have 88 GW of wind and PV and the wholesale electricity price down from 4.0 p/kWh to 2.4 p/kWh. If the restored subsidies are paid from taxation, as are most of the higher subsidies to natural gas, Britain’s “hard-working bill payers” would see all this fall reflected in their electricity bills. A nice boost for the government at the 2020 election.

Emeritus Professor Keith Barnham is a Distinguished Research Fellow at Imperial College London. He is author of The Burning Answer: a User’s Guide to the Solar Revolution (2014). Further background is available on burninganswers.com