With the real prospect of power cuts blacking out UK industry and homes in the foreseeable future, new nuclear is not an assured low-carbon energy policy saviour while key decisions hang in the balance. Jon Herbert looks at the long negotiations.

 

In March, the Government granted planning consent for the construction of Hinkley Point C, the first of a new generation of nuclear power plants the UK hopes to build for a sustainable energy future. But unless the price is right, French energy giant EDF could still walk away from the £14 billion construction and operation deal.

There is growing concern that the UK could have insufficient power-generating capacity to meet future energy needs. The problem is that the Government says it has no money. Instead, it wants the private sector to finance future nuclear. Private investors in turn say they need long-term assurances before committing huge capital sums. Even then, enormous practical hurdles remain. Meanwhile, environmental groups argue that no truly sustainable solution can ever include nuclear.

With the outcome far from clear, it could again be time to store candles in the cupboard ready for rolling power black-outs 40 years on from the last major British electricity crisis.

Splitting the difference

As old fossil-fuel-fired power stations are taken offline and renewables fail to fill the widening energy gap, a new generation of nuclear plants designed to generate until the mid-century has been seen as a handy stopgap.

It took just three years to assemble the world’s first commercial nuclear power station at Calder Hall in Cumbria (then Cumberland). Built entirely by British know-how and expertise, it began producing power for the grid in 1956.

But new UK nuclear stations 60 years on are far from a foregone conclusion. There are political, financial, commercial, logistical and technical obstacles to be crossed before the first watt is generated in the 2020s.

The decisions to be taken are daunting. However, so too is the prospect of making no positive decision. Everything hangs in the balance as Whitehall and business leaders spar around simple issues with enormous consequences.

Nuclear options

Although a number of high-calibre consortia are involved with bids for the potential construction of new UK nuclear plants on up to eight coastal sites adjacent to existing nuclear stations, the focus is on plans for a Hinkley Point C plant in Somerset that would be built by preferred contractor EDF.

For a number of sound reasons, the Government is tied into a lengthy technical approval and licensing process, along with protracted talks on the economic and long-term commercial viability of atomic power. Even if this phase is successful, it will be followed by a long construction stage, including major earthmoving, tunnelling and transport infrastructure projects before nuclear engineering itself can begin.

The danger of delays at any point, and even the real possibility of project cancellation, could see the target opening dates of 2020 for the first reactor and 2024 for the second easily missed.

The current sticking point is talks between ministers and EDF on a guaranteed minimum sale price for nuclear power throughout the station’s foreseeable lifespan. This is the so-called strike price that the French energy giant says it needs firmly in place to justify a big investment decision.

The problem is that this single figure will be binding until 2060. If a long-term strike price is unavoidable, everyone is keen to get it right and avoid a legacy of miscalculation.

On paper, the two sides seem to be miles apart. EDF is said to have called for a strike price that is 25% above what the Government wants to pay and some 20% higher than the projected price of onshore low-carbon wind power, which only attracts a 15-year tariff advantage.

The delay is also said to be costing EDF £1 million a day, and it has already spent £800 million to keep the project alive. Recently, the company cut back on preparatory work and laid off workers in Somerset to contain costs. But equally, both sides have a great deal to lose from failed negotiations.

If the Government is unable to conclude a deal, it runs the risk of appearing to be incapable of pushing through strategic infrastructure projects vital to wealth and job generation. Its long-term low-carbon energy policy might also be jeopardised.

With some 1000 suppliers already approved for the project’s procurement chain, there would also be significant employment and economic losses. The Government would also like the UK to be seen as a potential exporter of new nuclear skills and expertise. But it is fearful of agreeing to an energy price that is too high, particularly if a new natural gas boom materialises in the next 20 years.

From EDF’s perspective, success in carrying out a project of the size of Hinkley Point C would be a considerable feather in its international cap as a nuclear leader. Failure could be damaging.

Ground work

If the Somerset investment goes ahead, two nuclear reactors will be constructed on a headland into the Bristol Channel five miles north of Bridgwater, five miles west of Burnham-on-Sea and next to Hinkley A and B. The project could create some 20,000 to 25,000 jobs during construction, 900 permanent operational posts and generate enough power for five million homes, or some 7% of UK power needs.

Permission for site preparation work given last July will include clearing a valley to the west of the existing A and B plants. But that will only be the start of an extensive logistical exercise. Another priority will be to build the Cannington bypass, which will be capable of carrying huge volumes of construction traffic.

Enormous vehicle parking facilities and three worker campuses will also be needed. In addition, Combwich Wharf will have to be developed to help bring construction materials to site. These activities alone could take 18 months to two years to finish.

When it comes to engineering the two approved UK European pressurised water (EPR) reactors, complete with their associated turbine halls and electricity sub-station to prepare power for the grid, there will still be an enormous amount of preparatory work to finish first on the 420-acre (170-hectare) site.

It is estimated that three million cubic metres of earth will have to be moved. In addition, a number of 3-kilometre-long cooling water tunnels remain to be bored. Only when this work is substantially completed can site work proper begin, to construct a base up to ground level on which the complex reactor-building phase can begin.

If work begins in 2014, allowing for a year of testing, the first reactor could come online by 2020, unless there are further delays.

On a project that has been likened to building all the facilities of the 2012 London Olympics, employee personnel issues are also important. Security, training, co-ordination, accommodation and welfare are major tasks that lie ahead.

With so many people working in tandem on site, coming up to speed while being fully aware of what other contractors are doing at the same time will be a crucial management activity.

But because contracts are not issued until the Government approves the nuclear construction programme, recruiting and inducting suitable workers is held in abeyance and must then go ahead at speed — a reversal of the military maxim “rushing to wait” to “waiting to rush”.

Although the operating costs of nuclear power stations after horrendous construction costs are relatively low, there is no escaping the additional price of waste disposal, decommissioning, security, accident response and insurance. The Government has said it will not fund nuclear development, but few states have managed to avoid footing the bill for these contingencies.

The net result is that engineering projects of strategic importance to the 21st century could still be balanced on a knife-edge.

Remember to store matches along with the candles.

 

 First published by Croner-i on 11 June 2013