Renewable energy providers are set to help bear the cost of the new Hinkley Point nuclear reactors, which could ultimately see the cost passed on to consumers through their energy bills.
It has emerged that the cost of accommodating the giant reactors on the National Grid, thought to be around £160 million a year, is set to be shared across all generators, not only those producing nuclear power.
It effectively means that providers of renewable power such as wind and wave energy will have to bear the brunt of maintaining the new Hinkley Point development, the multi-billion pound plant in Somerset which will be able to power around 5 million homes once operational.
The first reactor will come into use by 2020, with the second set to be ready by 2024, though the long-term maintenance of the site is now an issue of contention.
Spreading the cost
According to the National Grid, the decision to spread the cost is because “increasing costs on larger users could delay the commissioning of large nuclear plants by a number of years”.
However, this method could actually amount to something of a subsidy for the new power stations, according to critics such as Professor Catherine Mitchell, an energy policy expert at the University of Exeter.
She told the Guardian there is “no justification” for nuclear being exempted from paying the additional costs to the system, other than to make nuclear look cheaper than it is in relation to other sources of electricity.
“It is clear to me that were there a genuine, transparent and comprehensive examination of the costs and benefits to society of nuclear versus renewables, the latter would be of far greater value both in the short and long term,” Professor Mitchell added.
Responding to the criticism, an EDF spokesman said the costs of balancing the system and maintaining reserves have always been proportionally spread or socialised across all those on the system.
“The maintenance of such a reserve is to the benefit of everyone: customers, generators and suppliers,” he said, adding that major offshore windfarms could benefit from the upgrading of the grid back-up system.
One common point put forward by those opposed to spreading the charge is that offshore windfarms are not connected to the grid by a single cable and so do not pose the same risks.
“All renewable generators are paying the additional costs here, but not causing the need. The cost should lie where it falls,” a source told the Guardian. “National Grid obviously had its arm twisted at some point. Its justification is unconvincing.”
Nevertheless, the move has received the backing of the government, with the Department of Energy and Climate Change (DECC) noting that the system will require back-up reserve to be available due to the intermittent nature of some types of low-carbon generation, or in the event of a large generator failing.
This therefore underlines the importance of having a balanced energy mix, the DECC noted, though the department has so far refused to elaborate on how exactly the grid costs will be spread.
However, Greenpeace noted that providing back-up for nuclear reactors is expensive and said that the spreading of the cost is “another implicit subsidy” to ensure major nuclear plants are constructed without people realising they are footing the bill for it through their energy bills.
Professor Mitchell pointed out that state-sanctioned support for new nuclear power is ultimately being paid for by consumers, with the government even acknowledging this by saying that the public will not be forced to foot any “unfair subsidies” – as opposed to no subsidies whatsoever, as was originally promised when discussions took place in 2010.
She added that the nuclear benefits will not only unfairly impact the renewable sector, but ultimately leave customers out of pocket.
“Renewables will be supported with 20-year contracts rather than nuclear’s expected 40 years and the unknown costs of nuclear waste and accidents will also be placed on customers via government,” Professor Mitchell concluded.
However, the government is backing the new development, with Business Secretary Vince Cable saying nuclear power has the potential to play an “increasing role” in meeting the UK’s future energy need.
Launching a new strategy document, which reveals the coalition intends to have reactors at five new sites around the country developed by 2030, Mr Cable said the nuclear industry will provide “significant opportunities” for economic growth.
The report also revealed that the expected cost of the Hinkley Point development has now risen to £14 billion – 40% higher than the initial estimate of £10 billion.