As Britain gears up for a nuclear power renaissance, the spotlight has moved from the new £18bn reactors at Hinkley Point C to Moorside in Cumbria.
Billed as the biggest nuclear plant in western Europe, the planned Cumbrian reactor is an important part of the UK’s plans for a new generation of reactors to maintain energy security. But its future has been thrown into doubt by a financial crisis at Toshiba, the Japanese group leading the consortium to design and build it.
Toshiba wants to sell out. A Korean state-backed utility called Kepco is tipped to buy in. UK business secretary Greg Clark will visit Seoul this week to meet senior South Korean government officials and industry executives to discuss potential investment.
Big questions remain over the terms of any Korean participation, particularly whether the British government would be willing to contribute towards the estimated £10bn to £15bn needed to build the plant, or at least provide credit guarantees.
Mixed signals have emerged from the Treasury and Clark’s Department for Business, Energy & Industrial Strategy about whether the government is willing to commit public money to the expensive and risky business of building nuclear reactors.
Hinkley Point C gives clear reason for caution. As part of the 35-year deal signed with France’s EDF in 2013 to build the plant in Somerset, the government agreed to pay £92.50 for each megawatt hour of electricity.
Wholesale energy prices have fallen since the price was agreed, leaving the government on the hook for the potential difference when the reactor is up and running. Future top-up payments could run to billions.
Pricey, but the alternatives to not pushing ahead with nuclear new builds are stark: higher bills, insecure supplies, continued carbon emissions and even blackouts.
The lesson from Hinkley as the government mulls how to fire up Moorside? Avoid locking yourself in for the long term at an expensive rate for a technology which is still developing and likely to get better – and cheaper.