Hinkley Point is go. After a summer of suspense, the government has all but confirmed this morning that the new nuclear power station will go ahead. A “new agreement” with EDF, the project’s French developer, will give the Government greater control over any potential sale of EDF’s controlling stake.
The Government claims the plant will provide “seven percent of Britain’s electricity needs for sixty years”. Yet from the start, support for the project has left expert opinion out in the cold.
A former Tory energy secretary described the deal as “one of the worst ever”. The projected 2025 completion date is likely to come too late to solve our baseload capacity gap. And the £18bn project locks the government in to an electricity cost that is almost double its current price. According to E3G chairman, Tom Burke, Hinkley is “a 20th Century solution to 21st Century problems. Bigger is no longer better”.
Perhaps unsurprisingly, the public is against the project.
So why do it? And what does its belated, beleaguered birthing tell us about May’s government’s own potential for nuclear fissure?
The Osborne overplay
For George Osborne, the former Chancellor, bigger energy projects often appeared to mean the best – as has been the pattern in Western energy history. Sails, steam, and power stations – each innovation has been larger, pricier and more centralised than the last. Hinkley promised to top this list with panache. It would be an atomic cathedral with Osborne as high priest.
Chinese backing for the deal has also made the undertaking all the more grandiose. For the Chancellor it promised the start of a “golden decade” between Britain and the world’s fastest rising power. “Britain has rediscovered its ambition and we are thinking big again,” Osborne said at the launch of his national infrastructure commission.
The Government stalls
At first it appeared that Theresa May’s sweep to power would be defined by a clean sweep of the Osborne slate. Not only did she sack the then-Chancellor and purge his allies, she swiftly abandoned his target of achieving a 2020 budget surplus.
Announcing a delay to Hinkley gave further weight to this manoeuvre – May would appear cautious where Osborne had been cavalier. French unions’ qualms over EDF’s role in the project had already slowed down its sign-off. The past concerns of May’s chief of staff, Nick Timothy, over the security ramifications of Chinese involvement now came to the fore.
But a very different story, meanwhile, was being spun by Osborne’s successor, Philip Hammond. “Our hope is that EF will be able to come to a conclusion quickly and then we will be able to go ahead with this project,” Hammond told a BBC journalist at the G20 summit in China.
Such comments suggest that completing what Osborne started was perhaps always the plan.
Earlier this week the Government failed to grant the new National Infrastructure Commission (NIC) full statutory independence. This leaves the Treasury free to disregard the recommendations of its recent report – including the fact that simply improving the management of our current assets could save us four Hinkleys worth of energy for a fraction of the cost.
Pressing ahead with Hinkley, according to the Government, alongside other “modest” and “deliverable” infrastructure projects, will allow the Chancellor to offer action on large portions of the “ infrastructure pipeline”. It will also allow him to make a splash in the Autumn Statement – and answer Labour’s concern with protecting union interests. “It is vital this contract goes ahead”, Labour minister Barry Gardiner said on the BBC’s Today programme, pointing to the promise of 26,000 new jobs and apprenticeships.
A divisive project
Whatever the intentions behind the Hinkley delay, reactions to it have been far from well-controlled – both from outside the party and within.
The Chinese government has been understandably outraged by the aspersions cast on its intentions to British security. And it appears that this week’s last-minute delays have been driven by Greg Clark’s attempts to hammer out a better deal.
In his role as head of the new Department for Business, Energy and Industrial Strategy, Clark is already carving out a strong reputation. As such he is more likely to be aware of the numerous and increasingly compelling alternatives.
The wind power giant Dong Energy has claimed it could replace all Hinkley’s electricity sooner and at a lower cost, a McKinsey report suggests energy efficiency measures could reduce electricity demand by a further 23 per cent by 2030, and solar power has already added a third of Hinkley’s capacity since 2010 – half of which was delivered in just 18 months.
Hinkley’s legacy
The Hinkley delay may thus have started as an attempt to put May’s stamp on an old Osborne project. But it is increasingly looking like useful cover to hide a divided party.
Clark’s comments to this morning will help restore an impression of unity. Hinkley “is an important upgrade of our energy supplies” and “a major step forward” for the UK’s new nuclear program, he told the BBC’s Norman Smith.
But today’s display of Tory unity on Hinkley could yet become tomorrow’s meltdown. As the UK’s capacity crunch grows and the construction delays that have plagued similar projects take hold, the case for an alternative, cheaper and more distributed energy solutions is only likely to strengthen.
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