China to Invest in New UK Nuclear Plants? Updated

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Chancellor puts together deal to have Chinese financial backing for building nukes

China has redeveloped its economic muscle. In all but two of the last 20 centuries, China was the world’s largest economy. It also is the longest surviving system of government, as chinese people will tell you, seeing a continuity of culture from before the western Christian era to today, despite upheavals and changes of government. With the combination of far-sightedness, huge size and recent economic development, China is bound to play a major part in global political, environmental and economic events in the future.

This week UK Chancellor George Osborne visited there, in company with London mayor Boris Johnson. Osborne announced that the UK and China were very close to making a deal to build a new nuclear reactor at Hinkley Point in somerset at a cost of £14 bn. It looks likely that China would end up owning about 30% of the plant, in partnership with French nationalised electricity company EDF, which would build the nuclear station. China has 17 nuclear reactors and is currently building many more. Britain has serious problems with ageing power plants and electricity supply will be very tight this winter, according to Ofgem. This government and the previous one have shied away from making the decisions to commit to new power plants: coal is dirty, gas less so but is now expensive – hence the recent consumer price rises – and renewables, while expanding considerably, remain a small part of the power generation mix. The government’s Green Deal hasn’t been at all successful in getting householders to invest in green improvements.

Olkiluto Reactor Hall in Finland. Photo by Areva
Olkiluto Reactor Hall in Finland. Photo by TVO

Is nuclear power the way forward? This is probably the most polarised debate in green policy. The arguments boil down to

  • Is it sensible to have foreign companies controlling essential infrastructure?
  • Is nuclear and its waste safe?
  • Can nuclear plants deliver power in time to reduce the fossil fuel damage to the climate?
  • Are renewables more cost-effective and better value?

These arguments will run for a long time. I think the critical questions are the first and third. Although currently large swathes of the UK political elite decry nationalised industries, they see no problem with foreign nationalised companies owning critical parts of the UK infrastructure. I foresee problems with this in the future as energy gets tighter.

Turbine Hall at Olkiluto 2. Photo TVO

Turbine Hall at Olkiluto 2. Photo TVO

The third point is also important: it takes a long time to build a nuclear power plant and the upfront costs are a significant factor, particularly if there are construction time overruns, as there were in the last two French-designed plants built in France and Finland. It is difficult to be certain about how the costs stack up as there are many uncertainties. See here for comaprison costings

Gas power stations are usually completed in around three years, and onshore renewable installations (being much smaller and less complicated) in months. The OECD Nuclear Energy Agency quotes 5 -8 years to construct a nuclear plant, excluding the legal and permitting times – which are likely to have increased in the wake of the Fukushima disaster.

Although there is a plan for Britain to build at least 12 new nuclear reactors at five sites by 2030 – 17 years away, it doesn’t seem that this is a practical scheme and it would be better to move strongly toward renewables in a much shorter timeframe, perhaps with new, cleaner gas-fired power stations replacing the dirty old coal ones which have to be decommissioned.

Update Monday 21st October : New Nuclear Power Station announced!

The UK  government has today announced that two new nuclear power stations will be built at Hinkley Point in Somerset, with construction by EDF of France and financial backing from China. While the necessity of building new power plants, as discussed above, is paramount, the new nuclear power stations have fixed a price at £92.50 per megawatt hour over 35 years – which is double the current wholesale price for electricity. It is hard to say whether this is a good deal or not for the UK consumer, this blog not having access to a crystal ball. What is certain is that the power plant will take years to build – let’s say ten years including the legal matters and overruns, and Britain has more pressing short-term energy problems, as discussed above.

Not only that, but more severe problems have emerged at Fukushima. See detailed article link. It may be that the damaged Japanese reactor is not a guide to what might happen here, but levels of incompetence, buck-passing, and coverups are not unique to the Japanese nuclear industry.

So it is not at all clear that this is a wise decision by the government. We shall have to wait and see.