AEP Misses The Point About Hinkley
By Paul Homewood
AEP comes to the right conclusion for the wrong reasons!
There is little point reprinting the article, as he simply rehashes his old argument that we can replace Hinkley with offshore wind:
Offshore wind contracts in Holland and Denmark are already coming in far below the Hinkley strike price of £92.50 per megawatt hour, even allowing for hidden subsidies. The same companies say they can match this relatively quickly in Britain.
The industry has vowed to reach a target of £69 per MWh by 2025, driven by economies of scale.
And of course there are still the same old holes in his arguments:
1) The projects in Holland, which he constantly mentions, are not comparable, because all the considerable costs of transmission are being paid by the government. In addition, the state is also paying for all of the exploration, provision of site data and environmental impact assessments.
For a proper comparison, at the most recent auction last year offshore wind contracts were awarded at £119.89/MWh at 2012 prices, or £126.85 at current prices.
It is true that George Osborne set a cap at £105/MWh (again at 2012 prices) for the next CfD round, in his last budget. This will fall to £85/MWh for projects commissioned by 2026. But there is no guarantee that this will end up attracting any bidders, or that future chancellors won’t simply raise the price.
Hoping that something comes along in ten years time is no way to run the country’s energy policy.
2) He ignores the fact that trying to compare nuclear with wind power is comparing chalk and cheese. Nuclear provides reliable, dispatchable baseload. Wind does not.
He whittles on about battery storage, which does not exist in anything like the scale needed. Even if it did, it would add colossally to the cost of wind power.
He shows how poorly he understands energy markets when he says:
Britain will always need reliable ‘base-load’ power to supplement renewables but big nuclear reactors are a poor way to do this. They cannot easily be switched on an off.
The whole point about baseload is that it does not have to constantly switched on and off, a reason why the existing nuclear plants we have are so successful at providing that very same baseload.
3) To replace Hinkley’s output with offshore wind would require an extra 7.2 GW of offshore wind capacity, on top of the 5.1 GW we already have, and the extra 17.4 GW already planned or projected.
This is not small feed.
And, of course, we would still need an extra 3.2 GW of reliable backup capacity, such as CCGT, to cover for wind’s intermittency, a fact that even Richard Black, who is paid to shill for renewable interests, admits.