It is looking increasingly likely that the British Government is about to cave-in to EDF's demand that the British energy consumers should pay what could be massive cost overruns for building Sizewell C nuclear power plant. But what has not been discussed so much is how the contract the Government is likely to offer EDF will reduce deployment of renewable energy schemes.
A report in The Times signals that EDF chiefs is meeting the Chancellor to complete the details for how to dress up what is in effect a blank cheque for Sizewell C. It reported that the withdrawal of Hitachi from the Wylfa site was a 'shock'. Hitachi's move which has been expected for a year, is not a shock to people in the energy industry. It became apparent (to me at least!) long ago that new nuclear plant can only be built if they are given an effective blank cheque (that is the promise of an unlimited supply of cash) from some state-backed energy monopoly.
At the moment Hinkley C power plant is being built with the backing of the French state who will pay EDF's bills for the plant's cost overruns. But EDF has been told that the French state won't pay for another British nuclear power plant at Sizewell C. So EDF bosses are telling the Brits that they have got to have Sizewell C, and that the Government will have to promise a scheme whereby the Government will have to ensure that EDF' cost overruns are recompensed.
Of course we are treated to many press reports and consultants explaining that the costs of Sizewell C will be less than Hinkley C, but this somewhat begs the question of why it is then that EDF needs a promise that the British state will ensure payments of cost overruns.
What, however, is less understood is that EDF will be expecting the same sort of contract as given to them for Hinkley C which allows nuclear electricity generation to crowd out production from future renewable energy plant. EDF will be given so-called 'baseload' contracts that mean that when electricity wholesale prices are low or even negative they will still get paid the same level of high premium prices. Meanwhile future wind and solar pv projects will be effectively forced offline by the nuclear power plant because they will not receive premium prices.
This type of 'baseload' contract is another form of hidden subsidy to new nuclear power stations that raises the real price of nuclear power beyond the fictional prices quoted in government reports. Meanwhile the cost of this subsidy to nuclear power's (for generating power at a high price when the power is not needed) is borne by renewable energy, whose costs thus increase. Yet of course this hidden subsidy is entirely a creature of the biased contracts that the Government offers nuclear power. Nuclear power is given preferential contract treatment because it is called' baseload'. And yet it bears no penalty for being inflexible -that is unable to change its output to fit in which demand and supply patterns.
Given the wealth of alternative low carbon generation options, as well as the prospect of being able to balance the electricity system better without these nuclear power plant, there is no need to build these plant given their great expense, besides any other reason. However EDF not only has immense political clout as a big multinational corporation owned by the French state, but they also have the support of a large number of civil servants - indeed there is a much larger number of civil servants dealing with nuclear power compared with renewable energy.
https://www.thetimes.co.uk/edition/business/frances-edf-demands-clarity-on-british-nuclear-power-plans-00t6gbmlg
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