To ‘C’ or not to ‘C’, that is the question…

Author: Caroline Lockyer - Glenigan utilities sector expert

It was reported recently that Whitehall Officials could be looking at ways of pulling out of the Hinkley Point C proposal. Late July 2016 saw the new Government cause an unexpected delay to the scheme by saying it needed to be reviewed further and an announcement would be made Autumn 2016.

Hinkley Point C has now been dubbed as not essential when it comes to the UK meeting it’s energy and climate change targets.  

They are listing reasons for further delays as security and viability for the possibility of pulling out of the scheme. Financial issues would clearly arise which ever decision is made regarding the go ahead of the nuclear power station, but following the Brexit decision, how much damage will this do to international relations?

With over £24 billion of investment, Hinkley Point C promises to secure our future energy needs. Glenigan first reported on this project during 2001 and now, almost 15 years later, the scheme is still in doubt. 

Fact - It will operate for at least 60 years and should be capable of producing 7% of the UK’s electricity - enough for 5 million UK homes.

Hinkley Point C will be a 3.2GW power station, creating approximately 25,000 employment opportunities throughout it’s 10 year build programme. It will revitalise the UK’s nuclear power stations also causing a great knock on effect throughout the surrounding communities. 

If Hinkley Point C does not go ahead, what will become of the Government’s energy targets? 

The Energy and Climate Intelligence Unit (ECIU) have said opting for "established" approaches instead would save bill payers £1bn a year in total.

One of the report's authors, former Npower chief executive, Paul Massara - who now runs North Star Solar - said: "You are looking at a deal which is two and half times the current price, it goes on for 35 years and effectively this report today shows we can transition to a low carbon, affordable secure option without Hinkley and that's what we should be doing."

Mr Massara said a more "flexible" cost saving approach was needed that "includes things like demand-side management, which means people can turn down their electricity demand and manage their demand, with smart meters and batteries which are going to come in the next five to six years".

Smart metres are beginning to be rolled out, so is this the way forward for electricity, with householders taking responsibility for their own demands for this product? However, we are doing this already, to a degree, there are alternative methods and enough battles between the energy supply companies to keep us all aware of how competitive that particular market is. 

However, the Government has guaranteed EDF a fixed price for the electricity it produces for 35 years. That fixed price is £92.50 per megawatt hour - nearly double the current rate.

That is expected to push up energy bills for consumers in the long run.

June/July 2016, National Grid speculated that the UK has a whole would miss their energy targets for 2020. These targets were only set in February 2016 and 3-4 months later, it’s predicted they won’t be reached. Will there be consequences as a United Kingdom if we do not reach these targets, which have also been previously missed?

How broad are energy minister’s shoulders? What are the Government’s assurances of hitting these targets? 

Will solar farm subsidies be re-injected to boost the renewable energy industry, will there be a push on wind farms and gas fired powered stations, or is this all hot air?

There’s more than just this project in the balance, it feels like industry confidence is beginning to waiver and with so many European contractors in this particular sector, along with investors, it needs a boost. 

Autumn 2016 is when the Government have said they will reach a decision regarding Hinkley Point C, the Prime minister `May or May not’ give this the go ahead, but whatever the decision, I’m sure there will be repercussions.