Response to Government announcement about new nuclear power plant at Hinkley Point C
Commenting on the announcement today by the UK Government that it will allow the construction of a new nuclear power plant at Hinkley Point C in Somerset, Professor Sam Fankhauser, Co-Director of the Grantham Research Institute on Climate Change and the Environment and Co-Deputy Director of the ESRC Centre for Climate Change Economics and Policy at the London School of Economics and Political Science, said:
“The Government’s announcement will reduce uncertainty about the ability of the UK to meet its emissions reduction targets and to decarbonise its power sector. Over the past few years, UK governments have been hindering and shutting down options for low-carbon electricity, for instance by the sudden removal of subsidies for onshore wind and by the withdrawal of funding for the development of carbon capture and storage, so it should be welcomed that it has not also shut the door on nuclear power. Analysis by the Committee on Climate Change has shown that it would be very difficult for the UK to achieve the average cut in annual emissions of greenhouse gases of about 57 per cent over the period between 2028 and 2032 compared with 1990, as required by the Fifth Carbon Budget which was passed by Parliament in July, if neither new nuclear power plants nor carbon capture and storage technology are operating.”
“There has been much speculation about whether the strike price for electricity from Hinkley Point C of £92.50 per megawatt-hour is too high. However, it is important to note that such an assessment requires estimations of the wholesale price of electricity for the 35-year period from when Hinkley Point C starts operating, which is not likely before 2025. Such estimates cannot be made with any precision and are subject to large uncertainties. Many renewable technologies are likely to be able to supply electricity at a cheaper price by 2025, but calculations by the Committee on Climate Change show that it is unlikely that demand for electricity in the UK could be supplied entirely by renewables by that date. The Committee has also pointed out that electricity generated by Hinkley Point C is likely to be cheaper than electricity supplied by coal- or gas-fired power plants, assuming that there is a carbon price that is consistent with the UK’s emissions reduction targets. Hence Hinkley Point C is still likely to be a cost-effective electricity generator compared with the alternatives.”
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NOTES FOR EDITORS
- The ESRC Centre for Climate Change Economics and Policy (https://www.cccep.ac.uk/) is hosted by the University of Leeds and the London School of Economics and Political Science. It is funded by the UK Economic and Social Research Council (https://www.esrc.ac.uk/). The Centre’s mission is to advance public and private action on climate change through rigorous, innovative research.
- The Grantham Research Institute on Climate Change and the Environment (https://www.lse.ac.uk/grantham) was launched at the London School of Economics and Political Science in October 2008. It is funded by The Grantham Foundation for the Protection of the Environment (https://www.granthamfoundation.org/).