The Nuclear Solution

6 September 2017

Balfour Beatty has announced that it is EDF Energy’s preferred bidder for the Hinkley Point C nuclear power station tunnelling and marine works package. The four-year contract will involve the construction of three tunnels for a total of 9.5km in length and 7m in diameter. The tunnels will form part of the cooling system required.

Hinkley Point C is the fi rst of the new generation of nuclear power plants to be built in the UK, and the fi rst to be constructed for more than 20 years. As always, nuclear power comes under fi re from all corners. Even the National Audit Offi ce has argued that costs and risks have not fully mapped out in a report published this year.

The project is estimated to cost GBP 18bn to construct and should meet 7% of Great Britain’s power requirements in the mid-2020s. The cost will be met entirely by France’s EDF and China’s CGN, which will then exact GBP 92.50 (in 2012 prices) per MWh of electricity generated.

This ‘strike price’ has been the source of much of the criticism, which is approximately double the current wholesale rates. The auditors have noted that this was due to a lack of competition, but stated clearly that the government has committed consumers and taxpayers to a high cost and risky deal.

The problem with a strike price is that if prices dip below the agreed sum, the country is committed to topping up to that level (until 2035 in this case). Although if prices soar above it, the plant owners would suffer.

However, nuclear needs to happen. Solar is looking like the runaway victor in the renewable sector and we can expect exciting things from that industry, but with the numerous energy storage options still woeful (although the comparatively primitive option of pumped storage, which requires tunnelling, leads the pack in terms of energy retention), the only effective way to guarantee base load power levels during weaker generating hours, while still being low-carbon, is nuclear.

Besides the fact that a substantial portion of existing capacity is fast approaching the end of its working life, new electricity demands may provide a sudden shock to the system sooner rather than later. The expected rise of the electric car in particular will transfer an enormous amount of energy demand from petroleum to electricity, and society needs to be ready. Nuclear and/or storage is the future for much of our energy production. Fortunately for the industry, both (currently) require tunnelling. Unfortunately for the country, one seems to be expensive and the other technologically challenging.