UK energy secretary admits for the first time that any delays or cancellations to new nuclear reactors would not compromise national energy supply:
The UK’s energy secretary has admitted for the first time that the lights would stay on if new nuclear reactors at Hinkley were cancelled or delayed.
Amber Rudd has previously said that “energy security has to be the number one priority” and that new gas and nuclear power would be “central to our energy-secure future”.
But in a letter released on Tuesday in reply to MPs on the energy and climate change select committee, which asked what contingency plans were in place if Hinkley is delayed or cancelled, she said: “While we have every confidence the deal will go ahead, we have arrangements in place to ensure that any potential delay or cancellation to the project does not pose a risk to security of supply for the UK. I am clear that keeping the lights on is non-negotiable.”
She also said that delays to the troubled plant could risk the UK missing its targets to cut carbon emissions, and that alternatives could cost more but would not represent a “significant increase” in cost in the short term.
The final decision by French-state owned company EDF to go ahead with Hinkley has been repeatedly delayed and the billion of pounds of state subsidies and the feasibility of the giant project have been widely criticised. Last week one of the UK’s major investors, Legal and General, called Hinkley “a total waste of money”.
EDF, their Chinese partners and the UK and French governments have insisted Hinkley will be built, with French economy minister Emmanuel Macron saying on Sunday the project would go ahead.
In Rudd’s letter, she says: “Macron has publicly provided assurances that ‘the decision must be agreed ahead of EDF’s shareholder meeting [12 May]’.” In March, EDF’s finance director resigned and its trade unions have warned the Hinkley project could severely damage the company.
Rudd said that without Hinkley, energy security would come from the capacity market, where the government offers subsidised contracts for guaranteed electricity supply. The Institute for Public Policy Research has called the capacity market “unfit for purpose”.
Rudd said there was also “detailed monitoring and governance arrangements to ensure we have sufficient intelligence and foresight on any issues that might delay construction further down the line, so that alternative capacity can be put in place.”
She said alternative sources of supply “would be unlikely to present a significant increase” in energy bills for delays known about before 2021. But she also warned: “There is also a risk though that any delay could put at risk our decarbonisation targets – one of the key reasons the government is supporting Hinkley Point C in the first place.”
A report from the government’s National Infrastructure Commission in March found that “smart power – principally built around three innovations, interconnection, storage, and demand flexibility – could save consumers up to £8bn a year by 2030, help the UK meet its 2050 carbon targets, and secure the UK’s energy supply for generations.”
Angus MacNeil, chair of the energy and climate change committee, said: “[Rudd’s] letter shows the government has had to finally concede the need for a Plan B on Hinkley, although the detail is sketchy. New capacity must be brought online in a way that is compatible with our decarbonisation targets. That means limiting the role of fossil fuels and maximising the use of smarter low carbon options to meet demand.”
The shadow energy and climate secretary, Lisa Nandy, said: “This letter is new evidence that ministers have lost control over the future of this project. We now need to see a detailed plan B that protects billpayers and ensures we achieve legally binding pollution goals.”
Rudd was also asked by the select committee what liabilities taxpayers would face if the project was cancelled at this stage. She said: “At this stage, as no contracts have yet been signed, there are no liabilities which would fall to the UK taxpayer or consumer.”
But she said, once the contracts are entered into, there were small risks of compensation payments if the project was cancelled, though these are “almost entirely within the control of the UK government”. In March, the Guardian reported that the Hinkley deal contains a “poison pill” which could leave taxpayers with a £22bn bill if a future UK government closed the plant before 2060.
John Sauven, Greenpeace’s UK director said: “There is absolutely no reason that the UK could not meet our decarbonisation targets if the government dropped Hinkley and gave renewable energy businesses a fraction of political and financial support that nuclear and fossil fuel companies enjoy.”
East Devon Watch 