UK nuclear power plant gets go-ahead
EDF have played a good hand well with the negotiations over Hinckley Point. This deal does two things; first, it means that this new generation of nuclear power stations will finally get built and secondly finally debunks any remaining notion that nuclear offered us cheap energy.
The price the government has guaranteed to pay for the energy generated at Hinckley is around twice the current wholesale price. This will be paid for by energy consumers as bills inevitably rise.
Of course, Hinckley Point won’t start feeding electricity into the grid until 2023 and at current rate of energy inflation, we can safely assume that this wholesale price will appear good value by then. If energy costs continue to rise at the rates they have since 2009, they will rise by around 115% by 2023.
Nuclear energy may help address the energy security issues facing the UK, but it won’t be the source of low cost energy that many of its advocates have long claimed. For companies with large energy consumption, the commercial case for investing in self generation has never been more compelling.