Artist's impression of the proposed Hinkley C nuclear power station

Earlier today (21 October), it was announced that a commercial agreement has been struck between the government, EDF Energy and two Chinese Energy firms to turn Hinkley Point C (HPC) into the UK’s first nuclear power plant for 20 years.

EDF expects to take the majority stake of between 45-50 per cent, whilst China National Nuclear Corporation and China General Nuclear Power Corporation could share between 30-40 per cent ownership of the new plant in Somerset.

It marks the first new nuclear power station since Sizewell B in 1995, and is aimed to start replacing the former generation of nuclear power stations, the majority of which are scheduled for redundancy in the 2020s.

The government announcement has been met with mixed reactions in the wake of public anxiety following recent revelations about the increases in UK energy prices. The site will not become operational for at least a decade, whilst the decommissioning of former sites such as at Sellafield remain long term projects also.

Official estimates

Government estimates that the 430-acre site will ‘generate enough electricity to power nearly six million homes once operational, bring 900 permanent jobs to the area and create around 25,000 jobs during construction’.

The existing plant at Hinkley currently produces about one per cent of the UK’s total energy, but this is expected to rise to seven per cent once the expansion is complete in 2023.

Government further claimed that building a new fleet of nuclear power stations ‘could reduce bills by more than £75 a year in 2030’, thereby ‘helping to keep the lights on, cut emissions and reduce consumer bills over the long-term’.

The government ‘will ensure’ that the operator of Hinkley Point C will be responsible for the full costs of decommissioning and its share of the costs of waste management.

This is part of the government’s Nuclear Industrial Strategy, which sets out shared commitments with industry.

‘An excellent deal’

Secretary of State for Energy, Edward Davey said: “This is an excellent deal for Britain and British consumers.

“For the first time, a nuclear power station in this country will not have been built with money from the British taxpayer.

“It will increase energy security and resilience from a safe, reliable, home-grown source of electricity.

“This deal is competitive with other large-scale clean energy and with gas – and while consumers won’t pay anything up front, they’ll share directly in any gains made from the project coming in under budget and from refinancing or equity sales.

“We are creating one of the most attractive electricity investment markets in the world – and this is a clear sign that investors are already responding, even before our electricity market reforms become law.”

‘Into the deep pockets of Chinese and French corporations’

Under the deal, EDF will be guaranteed a strike price of £89.50 per megawatt hour generated for 35 years from when the plant starts opening – twice the current market level, and a figure that will be topped up through taxpayer levies.

Critics are highlighting this as a subsidy to the nuclear industry, with Dr Paul Dorfman of the Energy Institute at University College London, commenting: "What it equates to actually is a subsidy and the Coalition said they would never subsidise nuclear".

"It is essentially a subsidy of between what we calculate to be £800m to £1bn a year that the UK taxpayer and energy consumer will be putting into the deep pockets of Chinese and French corporations, which are essentially their governments."

Leader of the Opposition Ed Miliband added: "We've got a Prime Minister who says he can fix prices 35 years ahead for the energy companies but he can't freeze prices now for the consumer. No wonder we've got a cost of living crisis in this country."

Call for focus on renewable energy

Environmental campaigners are also concerned about the impacts the agreement will have on renewable energy. Friends of the Earth’s Policy and Campaigns Director Craig Bennett said: “The quickest way to end our costly fossil fuel dependency is though energy efficiency and renewable power, not new reactors that will suck up precious investment and take years to complete.

“Investment in German renewables has led to a massive fall in the wholesale cost of electricity. The government should be following this example, instead of locking the UK into costly nuclear power for decades.

“Investors are crying out to develop Britain’s vast renewable energy potential, but they need the confidence to do so. That’s why they want a clean power target in the Energy Bill.”

UK nuclear waste conundrum

Currently one sixth of the UK’s energy generated is by nuclear reactors dotted around the coast. Most of the UK’s low-level waste (which accounts for 90 per cent of the total) is stored at Drigg in Cumbria in thousands of steel containers. But for intermediate and high level waste, the body responsible, the Nuclear Decommissioning Authority (NDA), decided that what it calls ‘geological disposal’ – in other words, burying it deep beneath the ground – is the safest way to manage it.

Sellafield (where 70 per cent of the UK’s total nuclear waste either arises or is reprocessed) is due to be decommissioned over the next decade and the National Audit Office recently published a report that condemned the operator of the plant for failing to develop a long-term plan for the site. It described nuclear waste being stored in run-down buildings at the site as an ‘intolerable risk’ to public health.

So far, the search for where a geological disposal facility can be located has proved fruitless, after Cumbria - the last remaining community to volunteer to host the site - withdrew from the search process earlier this this year.

EDF has not yet made public how it expects to manage its nuclear waste.

Speaking of the commission of Hinkley C, nuclear waste consultants and authors of Too Hot to Touch: The Problem of High-Level Nuclear Waste, William and Rosemarie Alley warned: “The nuclear industry has no business building new reactors until it demonstrates that it can stop talking about solving the waste problem, and actually do it! “

“One of nuclear power’s strongest points is that it can play an important role in addressing climate change, yet the fact remains that most leading nuclear power producing countries—the UK, USA, Canada, Germany, and Japan—do not even have a geologic repository in the planning stage... Research and development needs to continue on these technologies but let’s keep in mind that, in real time, the world’s nuclear reactors continue to be piling up spent nuclear fuel.”

“Building new nuclear power plants without at least breaking ground on a geologic repository is just asking for trouble down the road."

Read more about the initial agreement between the government and EDF Energy or discover more about the legacy of nuclear waste in Resource 69.