See the story in the Times that EDF wants to be paid £165 per MWh (198 euros per MWh) for its proposed 3.2 GWe reactor and Hinkley C in Somerset, UK. In the story below they (EDF) claim this is still cheaper than offshore wind. In fact currently, under the UK Renewables Obligation offshore windfarms that have been recently and are now being installed are being paid around £135 per MWh (2xs £42.00 per MWh renewable obligation certificate value plus wholesale electricity price at £50 per MWh). EDF has been forced to come clean on nuclear costs, so now it is making dubious claims about offshore wind.
In the UK solar pv is now being paid £160 per MWh and onshore wind £92 per MWh – and wind power prices are inflated by the inefficiencies of the Renewables Obligation (compared to the ‘feed-in tariff’ system price that is quoted as the basis for EDF nuclear power). In addition, of course, the consumer will be locked into paying for nuclear for 25 years under the EDF plan, whereas the renewable energy support only lasts for 15 years.
Will the British Treasury sign off on this plan to increase average British electricity prices by 8 per cent for 25 years to produce 6 per cent of UK electricity from nuclear power? I don’t think so. See earlier blog 'Why it is impossible for the Government to fund Hinkley C' for more details and comment.
French demand high price for ‘rescuing’ nuclear industry with two new reactors
Last updated at 9:00PM, July 15 2012
Families and businesses are being asked to find an extra £2.8 billion a year for the next 25 years by EDF Energy as the price of rescuing Britain’s faltering nuclear power programme.
The Times has learnt that the French state-backed energy giant will not build two new reactors in Somerset without huge subsidies, paid for through fixed levies on the electricity bills of consumers and businesses for decades to come.
The company has begun talks with the Department of Energy and Climate Change about its planned £14 billion Hinkley Point nuclear plant and intends to decide at the end of the year whether to go ahead.
Under the Government’s electricity market reforms, low-carbon generators will earn more than the market rate for electricity to make it economic to build nuclear plants and offshore wind farms.
According to well-placed industry sources, EDF Energy has told officials that it needs about £165 per megawatt hour, almost four times the existing wholesale price of electricity, if it is to go ahead with Hinkley Point.
City analysts said that the additional cost of building these two reactors at such a heavily subsidised rate, rather than, for example, cheaper gas-fired plants, would be £68 billion over 25 years, or an average of about £50 extra a year on every household bill. Businesses would be face an even bigger charge.
John Sauven, the executive director of Greenpeace UK, said: “Anyone who is able to turn on a calculator can now see that the nuclear industry has been misleading us for years. The Government’s energy policy is based on the fiction that nuclear power would be cheap. At these prices, it would be a very costly mistake that would see consumers paying billions of pounds in subsidy for decades to come.”
The Government has warned EDF Energy, and its junior partner Centrica, that nuclear power subsidies must be lower than offshore wind power to ensure public acceptance. The company argues that the total costs of the giant new offshore wind projects planned for the North Sea will be £180 per mw/h, making nuclear slightly cheaper.
Spiralling nuclear costs could force the Government to abandon or reduce its nuclear new-build programme. The Times revealed in June that the cost of the Hinkley Point project had soared by 40 per cent to a mid-range estimate of £14 billion. EDF Energy wants to build at least four reactors in the UK.
A spokesman for EDF Energy denied that it would negotiate with the Government for a £165 per mw/h subsidy, claiming that it was “too early to talk about specifics”. A source close to the company did say, however, that it had begun modelling different scenarios for the level of subsidy required.
One senior City analyst said: “I wouldn’t be surprised they want to keep that number out of the public domain.”
The Government will offer special subsidies to EDF Energy because its package of electricity market reforms will not be ready for several years. Last week, the coalition appointed the accountant KPMG to represent it when formal negotiations begin.
EDF Energy said that the subsidy for nuclear “will represent a fair and balanced deal for customers. It will show the cost competitiveness of nuclear new build. The process will be transparent — and the details published in due course.”
Learn about policy options for implementing renewable energy by making amendments under the forthcoming Government Energy Bill at a Conference on January 18th at the University of Birmingham: http://www.claverton-energy.com/wp-content/uploads/2012/11/Feeding-Renewable-Policy_yc_5_10_2012.pdf
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Sorry this is at a slight tangent but what is the base load of wind, if that makes sense. The amount that a wind turbine will consistently produce regardless of weather. (obviously if no wind no power but when spread over an entire wind farm in real world example I assume one or two keep turning) or where could I find that information.
ReplyDeleteThe reason I ask the question is that the Govt could mandate utilities (Water, sewage, railways etc.) to buy a percentage of non-interruptible green electricity and I wondered how wind/renewables would fair vs nuclear under such a senario? Obviously at a major percentage of the countries electricity it wouldn't work but at the 6% Hinkley could provide it might.
What you're asking for is known as 'capacity credit'. At small penetrations (6% is small, right?) capacity credit is almost equal to average generation level. Which is some 20-40 % of nameplate capacity depending on siting.
DeleteThe alleged undesireability of subsidies for renewables is one of the pro-fossil fuel crowd's hobby horses. Yet very few of them voice similar concerns about fossil fuel subsidies, despite the fact that according to the International Energy Agency they are six times more than those for renewable energy. With these data in hand, anyone who criticises renewables for requiring subsidies needs to be challenged: "So what about fossil fuel subsidies?".
ReplyDeleteWhat you are asking for known as capacity credit. small penetrations (5% is small, right?) capacity credit almost equal average generation level.
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