Utility Week

UTILITY WEEK | 23RD - 30TH SEPTEMBER 2016 | 19 Finance & Investment to maintain and retaining control of key energy companies and assets." "The UK is now taking a more proac- tive approach than under previous govern- ments," he added. Certainly, the new conditions have done little to dampen the enthusiasm of CGN, which has a 33 per cent stake in Hinkley Point C, and EDF. EDF says the new frame- work provides a "sound basis for the projects at Hinkley Point, Sizewell and Bradwell". CGN says it is now looking forward to devel- oping these three new nuclear sites. Giving Hinkley the go-ahead is seen by advocates as vital for the UK. They say it will address the capacity gap expected in the mid-2020s, but also claim it is a timely sign to international investors that the UK is open for business, despite the uncertainty of Brexit. Throw in the local economic boost that Hinkley contracts will give to UK com- panies – for example, a £100 million deal for Welsh steel to be used in construction – and the Ž nal approval of Hinkley is certainly painted in a rosy light. For mournful Hinkley opponents, such arguments are no comfort. They say it is a twentieth century solution to a twenty-Ž rst century energy challenge – an investment we will regret as a nation when renewables, combined with energy storage, demand-side response and energy e' ciency measures, show that our demand forecasts and knowl- edge of grid operation today are irrelevant to a shaken up world of distributed, low carbon energy. Environmentalists also worry about the sense of signing up to the responsibility of storing more nuclear waste for centuries to come – especially given the BBC's recent exposé of safety concerns at SellaŽ eld. It will be some time before we see who is right. BEIS's green light for Hinkley will trigger movement on long-awaited construc- tion work, but it is unlikely the plant will be Ž nished before 2025. In the meantime, other infrastructure projects will need to forge ahead and the government has shown inves- tors are welcome – mostly. No single fuel source will guarantee supplies. O ur electricity challenge is enormous and meeting it will require a range of technologies and inno- vation. New nuclear power stations, including Hinkley Point C, are an important part of the transition to a lower carbon, reliable generation mix. There is no ideal single source for all of our power, and nor is there likely to be by the mid-2020s. Some who opine on these issues are far from having the same understanding, with many column inches Ž lled with the pointless technology vs technol- ogy arguments in recent times. The reality is that it is only through the best calibration of low-carbon power sources, demand management, e' ciency and the promise of gradually emerging storage techniques that a lower carbon system can be developed. Baseload power remains a requirement, and on crowded islands there is an obvious advantage in having some concentrated power generation ability along- side much more diverse local generation. There is no contradiction in supporting the development of di˜ erent low-carbon technologies – they will all have a role to play in the transition. Neither is there a free way of building the infrastruc- ture to generate electricity. All low-carbon sources have a signiŽ cant initial capital cost, and low or no fuel costs thereaš er. That is partly why the contract for di˜ erence mechanism has been introduced. Nobody knows what the cost of fossil fuels and carbon pricing combined will be in ten years' time. Providing a › oor for prices to stimulate investment is as important to o˜ shore wind projects at £140 and £150/ MWh as it is to Hinkley at £92.50/MWh. In both cases, costs of future projects are likely to be lower and all of the responsibility to build the plant is with the developer – it is only when power is produced that the consumer will pay a contribution. Even with an acknowledged tightening of capacity, the lack of new gas power stations being built shows there is little commercial value in CCGT unless there is either an advanced incentive or if it displaces low- carbon capacity. So while an argument for o˜ shore wind and gas as a magical answer to everything might suit those whose economic interest is in both, it is unlikely to be a feasible response in isolation, either for a˜ ordabil- ity or decarbonisation. The reality today is that we need a balanced low- carbon mix that will meet our electricity needs for the future. Nuclear is a part of that, just as it has been the underpinning of low-carbon power for decades. Getting on and delivering that mix should now be the priority and focus of energy industries, a challenge serious play- ers must now show themselves up to meeting. Opinion Tom Greatrex, Chief executive, NIA £18bn construction costs £92.50/ MWh agreed strike price 3.2GW generating capacity 10yrs estimated construction time 60yrs life expectancy "Having thoroughly reviewed the proposal for Hinkley Point C, we will introduce a series of measures to enhance security and will ensure Hinkley cannot change hands without the government's agreement." "Having thoroughly reviewed Point C, we will introduce ensure Hinkley cannot change hands without the government's Greg Clark, Secretary of State for Business, Energy and Industrial Strategy THE BIG NUMBERS

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