Head of Environment & Green Transition
After a month of chin-stroking, the Government has after all decided to give the go-ahead for a new nuclear power station at Hinkley Point in Somerset.
Now Hinkley C’s backers, the French company EDF and China General Nuclear – both state owned – can start to spend the eyewatering £18 billion (excluding finance costs) it’ll probably cost to build it.
As we’ve pointed out before, that price tag makes Hinkley C the most expensive object ever built on Earth (to say nothing of the £30 billion of subsidy it’ll tie up until the year 2060, by which time Mrs May would be 104 years old).
Hinkley’s biggest problem has always been this albatross of a pricetag, particularly when you stop to think about what that much money could do somewhere else (otherwise known as the ‘opportunity cost’).
What else would £18 billion get you?
You could put a 4kW solar panel on at least 2.9 million households – enough to meet the power needs of the average 3 bedroom home. That’s at today’s prices, too – about £6,500 per installation. Hinkley won’t even start generating for ten years – how much will costs have dropped by then alone? Solar is 70% cheaper than it was a decade ago already, and even conservative estimates expects it to keep on getting 10% cheaper every year. All of which makes that 2.9 million a considerable underestimate.
That’s what you could get for the £18 billion construction cost. And Hinkley’s £30 billion subsidy would also go further if used for solar. The Solar Trade Association says you could get the same amount of power as Hinkley for half the total subsidy cost, because of the ludicrously privileged deal carved out to encourage EDF to go ahead with the plant in the first place.
Image credit:Tom Bastin via Flickr
Or what about using that money to save energy, not generate it?
OK, so Hinkley makes electricity, and most homes are heated by gas. But still, you could put solid wall insulation – effective, but costly – on about 1.8 million houses, assuming a cost for each home of about £10,000. That’d cut the nation’s fuel bills by as much as £800 million, every year* – a one off investment with a huge ongoing stimulus effect, to say nothing of its impact on fuel poverty.
The point isn’t that the backers of Hinkley should take their £18 billion and make our homes warm and energy self-sufficient. Project finance doesn’t work like that. But it does demonstrate the choices that we face with our energy system: huge centralised kit, or millions of power stations in everyone’s homes?
Everything that’s happening in battery innovation and renewable technology is leading us ever further towards the latter. Come 2060, what will our grandchildren think of how we chose to spend our money?
[* assumptions based on figures from Which?: assumed average cost of a solid wall insulation installation: £10,000; average energy bill savings as a result £145 – 445 a year]
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