Hinkley Point C nuclear power station
|Hinkley Point C nuclear power station|
The headland at Hinkley Point with the current power stations visible in the background
Location of Hinkley Point C nuclear power station in Somerset
|Country||England, United Kingdom|
|Location||Somerset, South West England|
|Operator(s)||Expected NNB Generation Company|
|Nuclear power station|
|Units planned||2 × 1,600 MWe|
|Nameplate capacity||3,200 MW|
|Strike price = £92.50/MWh|
On 18 October 2010, the British government announced that Hinkley Point – already the site of the disused Hinkley Point A and the still operational Hinkley Point B power stations – was one of the eight sites it considered suitable for future nuclear power stations. NNB Generation Company, a subsidiary of EDF, submitted an application for development consent to the Infrastructure Planning Commission on 31 October 2011. In October 2013, the government announced that it had approved subsidized feed-in prices for the electricity production of Hinkley Point C., with the plant scheduled to be completed in 2023 and remain operational for 60 years.
A protest group, Stop Hinkley, was formed to campaign for the closure of Hinkley Point B and oppose any expansion at the Hinkley Point site. In October 2011, more than 200 protesters blockaded the site. In December 2013, the European Commission opened an investigation to assess whether the project breaks state-aid rules  with reports suggesting the government's plan may well constitute illegal state aid.
On 22 September 2014, news leaked that "discussions with the UK authorities have led to an agreement. On this basis, vice-president Almunia will propose to the college of commissioners to take a positive decision in this case. In principle a decision should be taken within this mandate" with a final decision expected in October 2014. On 8 October 2014 it was announced that the European Commission has approved the project, with an overwhelming majority and only four commissioners voting against the decision.
In January 2008, the UK government gave the go-ahead for a new generation of nuclear power stations to be built. Hinkley Point C, in conjunction with Sizewell C, could contribute 13% of UK electricity in the early 2020s.
Until November 2004, EDF was a French government corporation, but it is now a limited-liability corporation under private law (société anonyme). The French government partially floated shares of the company on the Paris Stock Exchange in November 2005, although it retains almost 85% ownership as of the end of 2007. The French-owned EDF bought EDF Energy Nuclear Generation Ltd, then known as British Energy, for £12.4 billion in a deal that was finalised in February 2009. This deal was part of a joint venture with UK utility Centrica, who acquired a 20% stake in EDF Energy Nuclear Generation Ltd as well as the option to participate in EDF Energy's UK new nuclear build programme.
In September 2008, EDF, the new owners of Hinkley Point B, announced plans to build a third, twin-unit European Pressurised Reactor (EPR) reactor at Hinkley Point, to join Hinkley Point A (Magnox), which is now closed and being decommissioned, and the Hinkley Point B (AGR), which has a closure date for accounting purposes of 2023 but is likely to be closed much later.
In 2011, Elizabeth Gass sold some 230 acres of her Fairfield estate at Hinkley Point for about £50 million. There are conflicting reports about whether the land was for the development of nuclear power or a wind farm.
In February 2013, Centrica withdrew from the new nuclear construction programme, citing building costs that were higher than it had anticipated, caused by larger generators at Hinkley Point C, and a longer construction timescale, caused by modifications added after the Fukushima disaster. In March 2013 a group of MPs and academics, concerned that the 'talks lack the necessary democratic accountability, fiscal and regulatory checks and balances', called for the National Audit Office to conduct a detailed review of the negotiations between the Department of Energy and Climate Change and EDF.
In March 2014, the Court of Appeal allowed An Taisce, the National Trust for Ireland, to challenge the legality of decision by the Secretary of State for Energy and Climate Change to grant development consent. An Taisce lawyers say there was a failure to undertake "transboundary consultation” as required by the European Commission’s Environmental Impact Assessment Directive. Lord Justice Sullivan said that "he did not venture that it had a real prospect of success, it was desirable that the court should give a definitive view as to whether there should be a reference to the Court of Justice of the European Union and, if not, on the meaning of the Directive". In July 2014 the Court of Appeal rejected An Taisce's application for a Judicial Review on the basis 'that severe nuclear accidents were very unlikely... no matter how low the threshold for a "likely" significant effect on the environment... the likelihood of a nuclear accident was so low that it could be ruled out even applying the stricter Waddenzee approach' 
The UN, under the Convention on Environmental Impact Assessment in a Transboundary Context, has also ordered the Department for Communities and Local Government to send a delegation to face the committee in December, on the “profound suspicion” that the UK failed to properly consult neighbouring countries.
Permits and licences
On 26 November 2012, it was announced that the UK Office for Nuclear Regulation (ONR) had awarded a nuclear site licence to NNB Generation Company, a subsidiary created by EDF Energy. This was the first nuclear site licence awarded for a nuclear power station in the UK since 1987, when one was granted for the construction of Sizewell B in Suffolk.
In March 2013, three environmental permits setting levels for emissions from the proposed power station were granted.
Throughout 2013 the operator has been in negotiations with the Department of Energy and Climate Change and other government agencies. A major sticking point has been a demand by EDF Energy for a guaranteed price for the electricity to be produced, which was about twice the current UK electricity rates. The project is part of the UK's plans to implement a fifty per cent cut in greenhouse gas emissions by the mid-2020s, which provide for building this and several other nuclear power plants. By 2013, the operator had invested about £1 billion in site preparation and other start-up costs. If built, the plant will produce about 7% of the UK's electricity needs. Total installation costs are supposed to be £14 billion.
On 19 March 2013, planning consent was given, but agreement on electricity pricing was still required before building could start.
The UK wholesale electricity price in 2013 is about £48 per megawatt-hour (MWh). EDF has negotiated a guaranteed fixed price – a "strike price" – for electricity from Hinkley Point C of £92.50 per megawatt-hour (in 2012 prices), which will be adjusted (linked to inflation) during the construction period and over the subsequent 35 years tariff period. The price could fall to £89.50/MWh if a new plant at Sizewell is also approved. Research carried out by the Energy Policy Research Group at the University of Cambridge argues that no new nuclear power plants would be built in the UK without government intervention. The construction cost are estimated to be £24.5 billion.
One analyst at Liberium Capital, described the strike price as 'economically insane': “as far as we can see this makes Hinkley Point the most expensive power station in the world... on a leveraged basis we expect EDF to earn a Return on Equity (ROE) well in excess of 20% and possibly as high as 35%.
For comparision, strike prices for renewable energy projects commissioned in 2014–2015 have been set to £155/MWh for offshore wind farms, £145/MWh for geothermal, £120/MWh for photovoltaic power stations, £100/MWh for hydroelectricity, and £95/MWh for onshore wind power. These prices are in all cases maximum strike prices and regress on an annual basis with expected cost reductions taken into account. For projects commissioned in 2018–2019, strike prices are set to decline by £5/MWh for geothermal and onshore wind power, £15/MW for offshore wind projects and £20/MWh for utility-scale solar PV projects, while hydro power remains unchanged at £100/MWh.
"Having considered the known terms of the deal, we are flabbergasted that the UK Government has committed future generations of consumers to the costs that will flow from this deal". According to Policy Connect, ROE could be between around 19 and 21%, with "broadly two possible reasons...firstly, the risks faced by EDF could genuinely be greater, therefore commanding a higher rate of return. Alternatively, or in addition, the negotiating process may not have been effective in driving down the expected rate of return relative to risk. A lack of competition in the negotiating process could have been influential here. The European Commission has questioned the likelihood of the first of these explanations, in light of what is already known about the allocation of risk".  David Howarth, a former Liberal Democrat MP, has doubted "whether this is a valid contract at all" under EU and English Law. Franz Leidenmuhler, a specialist in EU state aid cases and European competition law, has written that "a rejection is nearly unavoidable. The Statement of the Commission in its first findings of December 18, 2013, is too clear. I do not think that some conditions could change that clear result."
Jim Ratcliffe, the chairman and chief executive officer of the Ineos chemicals group, recently agreed a deal for nuclear power in France at £37.94 (45 Euros) per megawatt-hour. He said of the Hinkley Point C deal: 'Forget it. Nobody in manufacturing is going to go near £95 per Mwh'. Similarly, the Finnish company Fennovoima has signed a contract with the Russian company Rosatom to build a 1200 MW greenfield nuclear power plant, Hanhikivi I, in Pyhäjoki in northern Finland. The Finnish project is estimated to 'deliver electricity at “no more than €50 (£41) per megawatt-hour”' with planned completion in 2024. The construction costs are more than twice that of two similar EPR reactors at Taishan, China, agreed in November 2007 at €8 billion (£6.7 billion) including 'supply of fuel to 2026 and other materials and services for them'. EDF has been facing 'lengthy delays and steep cost overruns' on an EPR nuclear plant that it is building at Flamanville  in France. Areva has similar problems with budget overrun and schedule at its EPR nuclear plant project at Olkiluoto in Finland, leading France's energy minister to say that 'an overhaul of the country’s state-controlled nuclear energy industry was imminent'  and for EDF to say a decision on Hinkley Point C 'might not be made any time soon'.
The UK government strike price is lower for some renewables: £85 per megawatt-hour for sewage gas and £65 for landfill gas. The UK government draft strike price for large solar photo-voltaic is £110 per megawatt-hour in 2019  and renewable energy costs are expected to drop further.
In December 2013, the European Commission opened an investigation to assess whether the project breaks state-aid rules. Joaquin Almunia, the EU's Competition Commissioner, referred to the plans as "a complex measure of an unprecedented nature and scale" and says that the European Commission is not "not under any legal time pressure to complete the investigation". In January 2014, an initial critical report was published, indicating the government's plan may well constitute illegal state aid, requiring a formal state aid investigation examining the subsidies.
The European Commission decision on 8 October 2014 adjusted the "gain-share mechanism" whereby higher profits are shared with UK taxpayers. Rather than a 50-50 profit share if the project returned above 15%, the revised "gain share mechanism" will see the UK taxpayer get 60 per cent of any profits above a 13.5% return.
European Pressurised Reactor
EDF plans to use two of Areva NP's EPR design, with a net power output each of 1,600 MWe (1,630 MWe gross). The first commercial EPR power stations are currently being built at Olkiluoto Nuclear Power Plant in Finland and Flamanville Nuclear Power Plant in France. These reactors were meant to lead a nuclear renaissance, but have been substantially delayed and are running over-budget. Two more EPR units, Taishan 1 & 2, are being built in China.
The Union of Concerned Scientists has referred to the European Pressurized Reactor, currently under construction in China, Finland and France, as the only new reactor design under consideration in the United States that "...appears to have the potential to be significantly safer and more secure against attack than today's reactors.". However, George Monbiot, a vocal supporter of nuclear power, says that "the clunky third-generation power station chosen for Hinkley C already looks outdated, beside the promise of integral fast reactors and liquid fluoride thorium reactors. While other power stations are consuming nuclear waste(spent fuel), Hinkley will be producing it." 
The EPR design can use 5% enriched uranium oxide fuel, optionally with up to 50% mixed uranium plutonium oxide fuel, which is a fuel that partly recycles/consumes constituents of spent fuel produced by other reactors. The EPR is the evolutionary descendant of the Framatome N4 and Siemens Power Generation Division KONVOI reactors.
In February 2013, a poll published by Ipsos MORI which queried 1046 British individuals determined that support for new nuclear generation capacity was at 42% of the population. With the proportion of the population opposed to new nuclear generation being reported as unchanged at 20%, close to the lowest recorded proportion, by the agency in 2010, of 19% opposed. The results also report that the proportion of the population that was undecided or neutral had increased, and it stood at 38%.
In 2013 a survey by Harris Interactive of more than 2000 UK respondents found that 'one in four people (24%) considered nuclear power to offer the greatest potential' alongside solar (23%) and ahead of wind power (18%). Immediately following the announcement of the agreement between EDF and the government, 35% considered it to be a positive step, 21% felt it was a negative development and 28% were indifferent.
A protest group, Stop Hinkley, was formed to campaign for the closure of Hinkley Point B and oppose any expansion at the Hinkley Point site or elsewhere in the Bristol Channel and Severn Estuary. The group is reportedly concerned that the new generation of power stations will store nuclear waste on site until a permanent repository is found – claiming this is an unknown length of time and, could potentially take decades. The group issued a press release opposing any plans for a new power station on 24 September 2008, when it was announced that EDF had offered to acquire British Energy, the protest group has acknowledged that opposition in the local area is by no means unanimous.
In October 2011, more than 200 protesters blockaded the site. Members of several anti-nuclear groups that are part of the Stop New Nuclear alliance barred access to Hinkley Point power station in protest at EDF Energy's plans to renew the site with two new reactors.
In February 2012, about seven protesters set up camp in an abandoned farmhouse on the site of the proposed Hinkley Point C nuclear power station. They were reportedly angry that "West Somerset Council has given EDF Energy the go-ahead for preparatory work before planning permission has been granted". The group also claimed that a nature reserve is at risk from the proposals.
On 10 March 2012, the first anniversary of the Fukushima nuclear disaster, two hundred anti-nuclear campaigners formed a symbolic chain around Hinkley Point to voice their opposition to new nuclear power plants, and to call on the coalition government to hold back on its plan for seven other new nuclear plants across the UK. The human chain was planned to continue for 24 hours, with the activists blocking the main Hinkley Point entrance.
1980s PWR proposal
An earlier proposal for a Hinkley Point C power station was made by the Central Electricity Generating Board in the 1980s for a sister power station to Sizewell B, using the same pressurised water reactor design, at a cost of £1.7 billion. This proposal obtained planning permission in 1990 following a public enquiry, but was dropped as uneconomic in the early 1990s when the electric power industry was privatised and low interest rate government finance was no longer available.
During 2014, while awaiting the final decisions about whether the project will go ahead, 400 staff had been undertaking initial preparation and construction work. This work included access roads and roundabouts for increased construction traffic, park and ride schemes for the site workers, and a new roundabout for the village of Cannington. Further plans include the construction of a sea wall and a jetty for ships to deliver sand, aggregate and cement for concrete production.
- Energy policy of the United Kingdom
- Energy use and conservation in the United Kingdom
- Nuclear power in the United Kingdom
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|Wikimedia Commons has media related to Hinkley Point.|
- Infrastructure Planning Commission
- EDF Energy Consultation Site
- Stop Hinkley Local protest group web site