Hinkley on hold

Will next Tuesday be the day EDF finally gives the go-ahead to a new nuclear power plant at Hinkley Point C? The French energy giant’s board meeting offers another opportunity to secure the so-called “final investment decision” that would mark the point of no return for the company’s involvement in the scheme, ending doubts that – nearly seven years after the scheme was proposed – are still preventing work taking place on site.

If it feels like we’ve been here before, we certainly have. Most recently, in January; before that, in autumn 2015; and before that, in summer 2014. And that’s just this final hurdle. Warm words over Hinkley have been around almost ever since the government gave backing for a new generation of nuclear power in 2006. So far they haven’t amounted to an awful lot.

As a result, few would be comfortable betting that next Tuesday will yield anything different. Hinkley’s board is still reportedly split over a decision; particularly since one of the company’s other huge nuclear power construction projects, at Flamanville in France, is still not complete almost a decade after it began.

This is despite the fact that it would be easy to assume, from the length of time EDF has been involved in the project and the amount of political and media coverage it has had, that the reaching of a final investment decision is already a done deal. It’s certainly the impression that some within the client want to give, having leased office space in Bristol ready to run the project, and, Building understands, told the supply chain to prepare for “unconstrained spending”.

The importance of Hinkley Point C to the UK’s future energy supply is starkly evident in the estimate of the electricity it would provide

But until a decision is confirmed, those suppliers have every reason to proceed with extreme caution – or, indeed, not at all. The stop-start history of the project, which saw initial site work begun in 2012 but paused last April amid funding delays, has already come at a cost to some of those lined up to work on the project. People allocated to work on the scheme have had to be paid, some for months, before they could be reallocated to other projects. For one consultant, the delays to the scheme have meant the difference between projected growth and the business staying flat.

Against this backdrop, despite EDF’s rallying cry, firms lined up to work on the scheme would be foolish to commit resource without the security of that final investment decision. Which means that, even if a decision is taken next week, or next month, there will in all likelihood be further delays while companies pull their teams together. And so, however hopeful these companies - or the UK government – may be that EDF will commit post haste, every week that this does not happen is pushing the actual start date on the scheme even further behind.

The importance of Hinkley Point C to the UK’s future energy supply is starkly evident in the estimate of the electricity it would provide – some 7% of the country’s needs and the electricity for 6 million homes. When you consider that National Grid recently reported that the grid has a spare capacity of just 1.2% at times of maximum demand, the warnings about “lights going out” if the project does not go ahead do not seem like scaremongering at all.

While the nuclear industry – and those who envisage wanting to use a lamp or make a cup of tea in 2023 – wait on EDF’s decision, however, there is at least some positive news for the UK’s future energy supply this week, in the perhaps unlikely shape of the nation’s recent damaging  flurry of storms.

Wind farm developers, apparently encouraged by the extreme weather increasingly hitting the UK, have upped investment dramatically. Research shows there are £29bn worth of schemes in the pipeline at an early enough stage that they still need to appoint contractors; which equates to more than double the value of schemes awarded in the past five years.

According to WSP PB, wind farms contributed 11% of the UK’s electricity output in 2015, hitting 17% amid December’s especially wild weather. The contribution from an individual wind farm like the £15bn Hornsea One, which became the latest to be signed off by investors last week, is obviously far less than one nuclear power station could provide were it to go ahead. But as EDF continues to stall, the cumulative energy generation of these planned wind schemes is one silver lining from the UK’s storm clouds that could make a sizeable difference to the population in years very soon to come.

Sarah Richardson, editor