Theresa May’s government has put the brakes on Hinkley Point C, the first nuclear power station to be built in the UK in twenty years, with a final decision to be made in September.
But the government should stop agonising and cancel the project. There is no commercial or environmental sense in investing billions into a project that is outdated before construction has even begun.
The UK government agreed a deal with EDF, the French energy company behind the project, which locks in the price of energy at £92.5 per MWh, indexed at 2012 prices for 35 years. This cost is more than 50% higher than the cost of new onshore wind projects at £61.10 per MWh today.
Not only does the deal look bad at today’s prices, but other renewable sources, such as solar, are experiencing such rapid efficiency improvements, they are expected to reach £50-60 per MWh by 2025. As the National Audit Office has stated: “the cost competitiveness of nuclear power is weakening as wind and solar become more established.”
Advocates of Hinkley Point argue the 3.2 GW of power, equivalent to 7% of the UK’s energy requirement, is necessary to manage the intermittency of solar and wind energy. But this reveals a misunderstanding of the rapidly changing energy market. The cost of energy storage has fallen rapidly in recent years.
Today lithium-ion battery prices are around 30% third of what they were in 2010.
By investing in storage technology and renewable energy sources like wind and solar that are cheaper than the large scale nuclear project, not to mention better for the environment, Britain could create an energy market that works better for consumers and the planet.
But the government has to make smarter investments in the future of energy. Hinkley Point C is not the answer.