Tuesday, 30 October 2012

Nuclear strike price to be higher than wind? - While wind development is 'capped'.

The Government seems poised to announce a policy that will see nuclear power paid more than onshore wind. In the process onshore wind development will be capped. Consumers will be big time losers as the Government prepars to give nuclear power a higher 'strike price' per MWh for electricity generated compared to the strike price to be paid to onshore wind. They will end up paying around double the subsidy for a given amount of onshore wind compared to nuclear power. It looks like a pretty clear way of signalling that nuclear power is to be given a big advantage over wind power.

There is a lot of speculation about what the Government will set as the 'strike price' for nuclear power, not to mention whether it will be high enough to bring forward nuclear projects without a government 'blank cheque' (underwriting). However, one paradox seems to be going unnoticed. All the bets on the figure for nuclear seem to be higher than anything onshore wind is likely to receive.

Various people have mentioned £100 per MWh as the likely strike price for nuclear power. It is being described as a cap!(?) So what sort of a 'cap' is this if nuclear gets paid 25 per cent more than wind for the same output? Under a feed-in-tariff regime the figure paid to onshore wind is likely to be no higher than around £80 per MWh. Is the Government really going to make it so plain that onshore wind is cheaper than nuclear power? Even £100 per MWh is unlikely to be enough to lead to nuclear power plant being built - although we will see quite a few windfarms at £80 per MWh.

The Government seem poised to make the contrast even starker by 'capping' onshore wind development in some sort of deal with George Osborne - to placate anti-windfarm Tories. So suggests Business Green http://www.businessgreen.com/bg/news/2219518/is-the-chancellor-preparing-to-cap-new-onshore-wind-farms

Consumers will, with nuclear compared to onshore wind, have to pay an excess of £50 per MWh (over and above a wholesale electricity price of £50 per MWh) compared to only £30 with onshore wind - and to cap that as well nuclear power will have a much longer contract period - 25-30 years compared to maybe only 15 years for onshore wind. Altogether consumers will end up paying around 100 per cent extra to subsidise nuclear power compared to getting the same amount of energy from wind power.

Besides making consumers pay bigtime to satisfy Tory anti-windfarm MPs, this smacks of giant political bias in favour of nuclear rather than wind power. All overseen by a Liberal Democrat Energy Secretary! If onshore wind was paid £100 per MWh we could have a lot more onshore windfarms - but the Government clearly prefers to have nuclear if it can. How can the Government justify such a policy? Certainly not according to public opinion which sees wind as being preferable to nuclear power. But Government policy will have this exactly the other way around - with a twist of the wind 'capping' knife thrown in.

And we have claims that Hitachi's reactors are 'reliable' - even though half of the Advanced Boiling Water reactors in operation work for less than half the time! At least you can predict windspeeds in advance with some accuracy, which is more than you can say for nuclear power stations which suddenly go offline.

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

See my letter in the Guardian which also puts forward these sentiments at: http://www.guardian.co.uk/environment/2012/nov/02/the-beauty-of-wind-farms

Also, see letter published in the Daily Telegraph signed by me and a number of leading academics (and Jonathan Porritt): http://www.telegraph.co.uk/comment/letters/9662333/Barack-Obamas-potential-for-action-beyond-the-shores-of-America.html

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