The long read: Building Britains first new nuclear reactor since 1995 will cost twice as much as the 2012 Olympics and by the time it is finished, nuclear power could be a thing of the past. How could the government strike such a bad deal?
Hinkley Point, on the Somerset coast, is the biggest building site in Europe. Here, on 430 acres of muddy fields scattered with towering cranes and bright yellow diggers, the first new nuclear power station in the UK since 1995 is slowly taking shape. When it is finally completed, Hinkley Point C will be the most expensive power station in the world. But to reach that stage, it will need to overcome an extraordinary tangle of financial, political and technical difficulties. The project was first proposed almost four decades ago, and its progress has been glacial, having faced relentless opposition from politicians, academics and economists every step of the way.
Some critics of the project have questioned whether Hinkley Point Cs nuclear reactor will even work. It is a new and controversial design, which has been dogged by construction problems and has yet to start functioning anywhere in the world. Some experts believe it could actually prove impossible to build. Its three times over cost and three times over time where its been built in Finland and France, says Paul Dorfman, from the UCL Energy Institute. This is a failed and failing reactor.
Others have pointed to the cost. At present, the estimated total bill for Hinkley Point C is 20.3bn, more than twice the London Olympics. To pay for it, the British government has entered into a complex financial agreement with lectricit de France (EDF), the energy giant that is 83% owned by the French government, and China General Nuclear Power Group (CGN), a state-run Chinese energy company. Under this contract, British electricity consumers will pay billions over a 35-year period. According to Grard Magnin, a former EDF director, the French company sees Hinkley as a way to make the British fund the renaissance of nuclear in France. He added: We cannot be sure that in 2060 or 2065, British pensioners, who are currently at school, will not still be paying for the advancement of the nuclear industry in France.
Many British observers agree that the deal is ludicrously favourable to EDF a dreadful deal, laughable says Prof Steve Thomas, who works on energy policy at the University of Greenwich. But even insiders at EDF arent entirely happy with it. In the months before the EDF board finally signed off the deal in autumn 2016, the finance director resigned, along with Magnin. The Hinkley Point project remains very risky, Magnin told me. He is particularly concerned about EDFs ability to complete the project before the current deadline of 2025. Why have we reached this point? asked Magnin. It is the construction of a house of cards.
Not everyone has lost faith in the project. When John Hutton was business secretary in 2008, he announced that the government would encourage the safe and affordable development of nuclear reactors. Back then, he insisted the plants would be completed well before 2020, and wouldnt receive a penny in subsidies from the British government. Today, despite those earlier promises having been broken, Hutton still lobbies for nuclear: Were not just creating power stations, he told me. We are making history.
But the irony of Hinkley Point C is that by the time it eventually starts working, it may have become obsolete. Nuclear power is facing existential problems around the world, as the cost of renewable energies fall and their popularity grows. The maths doesnt work, says Tom Burke, former environmental policy adviser to BP and visiting professor at both Imperial and University Colleges. Nuclear simply doesnt make sense any more.
The story of Hinkley Point C is that of a chain of decisions, taken by dozens of people over almost four decades, which might have made sense in isolation, but today result in an almost unfathomable scramble of policies and ambitions. Promises have been made and broken, policies have been adopted then dropped then adopted again. The one thing that has been consistent is the projected cost, which has rocketed ever upwards. But if so many people have come to believe that Hinkley Point C is fundamentally flawed, the question remains: how did we get to this point, where billions of pounds have been sunk into a project that seems less and less appealing with every year that passes?
After winning the 1987 election, Margaret Thatchers government launched plans to privatise the entire electricity market. But in the months following this announcement, it became clear that selling off Britains three dozen nuclear units was going to pose a problem. A former civil servant closely involved with the privatisation remembered the shock of discovering the sheer scale of the risks and costs associated with the creaking first generation of nuclear plants. Whereas government policy papers could massage figures and make optimistic projections, the prospectus, which provided financial information for potential investors, could not bend the truth. A government paper was one thing, said the former civil servant, but if the figures were misleading in the prospectus, it was a criminal offence. That was not at all like a government paper, to be honest. It was quite a moment for us all.