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Today's entry reports on the agreement of a 'strike
price' for nuclear energy and the latest on judicial
reviews.
In order to encourage electricity generation of different types,
the government is offering guaranteed prices for electricity
generated by various different sources, to absorb fluctuations in
market prices and price different types more attractively.
Back in June, strike prices were announced for 13 types of
electricity generation, and today the government has finally
announced the figure for the proposed Hinkley Point C power
station, for which consent was granted under the Planning Act 2008
in March. The price is £89.50 per megawatt if EDF also bring
forward Sizewell C in Suffolk, and £92.50 if it doesn't.
That would seem to be a perverse incentive for EDF, but presumably
their economies of scale would be greater than £3 per
megawatt. The price is indexed-linked and is to last for 35 years,
but will be reviewed after 7 1/2, 15 and 25 years.
The announcement is here. It is
accompanied by a graphic showing that while Hinkley Point C will
take up 430 acres, an equivalent solar farm would take up 130,000
acres and an onshore wind farm 250,000 acres - a bit of a
non-sequitur since it is not referred to in the text and in any
event the strike price for solar and offshore wind is higher.
Here is a table of the different strike prices with nuclear
added, compared with the current cost of electricity - you saw it
here first!
Generation type
£ per megawatt
Current wholesale price of electricity
47
Landfill gas
65
Sewage gas
65
Nuclear (if Hinkley and Sizewell)
89.5
Energy from waste (with Combined Heat and Power)
90
Nuclear (if just Hinkley)
92.5
Hydro
95
Onshore wind
100
Biomass conversion
105
Dedicated biomass (with CHP)
120
Geothermal
125
Large solar photo-voltaic
125
Anaerobic digestion
145
Advanced conversion technologies
155
Offshore wind
155
Tidal stream
305
Wave
305
Legal challenges
Meanwhile, on 5 December the High Court will be hearing two
judicial review challenges against the decision to grant
development consent for Hinkley Point C on 19 March.
First, given that a judgment is unlikely until the new year, a
10-month delay is unhelpful if, as the Overarching Energy National
Policy Statement says, all forms of electricity generation are
urgently needed. Given that a claim must be made in six weeks under
the Planning Act, the vast majority of this time has been spent
since the claim arrived at the court. There is currently a consultation on reform of judicial
review that includes proposals to establish a specialist planning
tribunal, so the government is certainly alive to this point.
In terms of what the claims are about, briefly, An Taisce, the
Irish counterpart to the National Trust, has challenged the
decision on the ground that the UK government should have consulted
the Irish government before the application was made given the
potential for 'transboundary effects', and Greenpeace has
challenged the decision on the basis that the government should not
have given consent when there was no prospect for the long-term
storage of nuclear waste in play. From what I have heard I
don't expect either claim to succeed.
The Observer had an article on
the An Taisce claim yesterday. The organisation said that this was
a wider issue than just Hinkley, and it was even more concerned
about a proposed new plant at Wylfa on Anglesey, closer to Ireland
than Hinkley. There has been no consultation of foreign governments
on that project so far - the only ones where consultation has
occurred are 14 offshore wind farms and one harbour project.
Furthermore no nuclear project other than Hinkley has even started
pre-application consultation yet, but perhaps today's
announcement will encourage other projects to come forward. There
is also a consultation on a revised process for
long-term nuclear waste disposal, so there is development on that
front.
While today is significant for agreement being reached between
the government and EDF Energy on financial issues, the project must
wait another three months or so - or longer if there are appeals -
before planning issues are fully dealt with and spades can be put
in the ground.
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