Nuclear deal matters to Scotland

While there is no immediate prospect of Scotland getting a new nuclear power station, the Hinkley Point nuclear deal still matters to us. 

UK energy secretary, Ed Davey, has signed the first new 35 year nuclear contract with French state-backed utility firm EDF, backed with Chinese finance. Even Davey recognised the deal is a gamble, with an estimated cost of at least £80bn over the life of the two new reactors to be built in Somerset. The actual cost will depend on how energy prices move over the next 30 years. Promises of no subsidy for nuclear have been sidestepped by putting the cost onto the consumer. 

The detail of the deal can be viewed in the EDF Energy press release. CEO Vincent de Rivaz said: “What we are announcing today is a good, fair and balanced deal for consumers, the UK and EDF. The project will kick start the UK nuclear programme and will help rebuild the nation’s industrial stamina. The progress so far on the project reflects the great skill and determination of a world class team which is ready to get to work and turn Hinkley Point C into a reality. ” 

The main focus of comment has been on the cost of the deal. Reactor construction costs elsewhere have been subject to cost overruns and more than 40% of the jobs will go overseas. Antony Froggatt, from the Chatham House thinktank, said EDF’s costs projection had already increased markedly. “In 2006, its submission to the government’s energy review stated it would cost £28.80 per megawatt-hour in 2013 values. This more than threefold increase [to £92.50], over eight years, puts the cost of nuclear electricity at about double the current market rate – higher than that produced by both gas and coal-fired power stations, and more costly than many renewable energy options.” 

The anti-nuclear Scottish Government response was led by Energy Minister Fergus Ewing. He said: “Today’s announcement confirms that consumers across the UK will be paying for nuclear generation until after the middle of this century. The single nuclear station at Hinkley could be eligible for consumer funded payments totalling around £1 billion per year, depending on wholesale prices. These payments will apply for the length of the contract being awarded – which, at 35 years, dwarfs the 15 years being offered to renewable energy technologies. The guarantee of support and subsidy under this contract until after the middle of this century also sits in sharp contrast with the lack of a UK Government commitment to support our offshore renewables sector and its potential beyond 2020” 

He also made reference to the “Scottish Government’s drive towards a balanced energy portfolio”. The Scottish Government’s energy policy is many things, but ‘balanced’ is not one of them. They also have no problem with relying on existing plants to provide much needed baseload generation in Scotland. 

The shadow energy secretary, Caroline Flint, said Labour supported nuclear power, but claimed: “David Cameron is now in the ridiculous position of saying that they can set prices 35 years ahead for the companies producing nuclear power, while insisting they can’t freeze prices for 20 months for consumers while much-needed reforms are put in place.” 

The case for nuclear power as part of the low emission energy mix is strong and the Scottish energy unions have long supported the replacement of at least one of our existing stations. However, to get EDF to sign up to the investment the UK Government has had to pay a high price over a time period that renewables can only dream about. English consumers may be picking up the tab for Scottish renewables, but Scottish consumers will have to pay for this deal as well.

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