Winds of spare change
Theresa May should look to Denmark instead of France to secure Britain’s future energy needs. The new prime minister on July 29 put plans to build two nuclear reactors at Hinkley Point under review. Gallic nuclear knowhow would be one way to satisfy the country’s demand for carbon-neutral electricity – but May should be heeding the message coming out of Scandinavia too.
As things stand, the UK is proposing to guarantee French state-controlled utility EDF a minimum price of 92.50 pounds for each megawatt-hour of electricity produced at the 18-billion-pound Hinkley Point project. Back in 2013, when the deal was struck, offshore wind was almost 50 percent more pricey.
Wind technology’s costs have plummeted since then. The latest generation of wind farms on the ocean is producing electricity for less than 85 pounds per megawatt hour rather than 130 pounds, new data from state-controlled Danish utility DONG Energy shows. Bigger and more efficient turbines contribute, as well as improvements in construction and grid connection.
This progress, which is faster than even DONG expected, is undermining the economic case for Hinkley Point. Offshore wind is already 8 percent cheaper. And the gap is likely to widen, as the industry continues to be on a steep learning curve, while construction costs for nuclear plants have a notorious tendency to creep upwards.
Renewable energy’s usual issue is intermittency. But offshore wind out at sea is strong and steady, so turbines generate power 98 percent of the time. Replacing Hinkley Point’s planned capacity of 3.2 gigawatts with offshore wind would admittedly require building wind parks of twice that size – offshore turbines on average deliver only around half of their nominal capacity. But as there is no shortage in potential locations for offshore wind farms, such a large scale ramp-up is technologically possible.
Offshore wind is not just cheaper, but also less risky than Hinkley Point. Wind parks usually go on the grid within four years, compared to at least a decade for planned nuclear plants. Similar reactors in Finland and France are dogged by a tripling of costs and years of delay. And the UK taxpayer would have to pay the nuclear subsidies over 35 years, while those for wind farms usually run less than half that long.
That’s before the wind turbines’ other obvious benefit: they don’t leave toxic radioactive waste behind. If May wants to pull the plug on Hinkley Point, she has a ready-made case.