The Lessons of Hinkley Point C

Why Nuclear Needs to Get Cheaper, Faster


The recent announcement for a new nuclear plant in the UK, known as Hinkley Point C, has generated varying levels of enthusiasm and dismay for nuclear advocates. With a total cost to first operation at £16 billion, Hinkley has caused some, including George Monbiot, to argue that expensive nuclear is unacceptable, even if it is low-carbon. On this point Monbiot is right. Yes, Hinkley is expected to be competitive with new combined cycle gas in the UK and its strike price is lower than government-agreed strike prices for other clean energy options. But what we need is for nuclear power, as the only sufficiently scalable solution, to reach a price point where it’s the political no-brainer for replacing and displacing coal and gas. The lessons from the UK are that we urgently need a stronger and more visible vision and plan for better nuclear prices and faster roll out, and this needs to come from the industry.

October 29, 2013 | Ben Heard,

The energy-geek world I inhabit has been abuzz this week with the announcement of commercial terms for the construction of 3.2 GW of new nuclear power in the UK, to be known as Hinkley Point C. Total cost to first operation is £16 billion, comprising £14 billion in construction and £2 billion in costs to date. At £5,000 kW installed, we are talking some serious coin here.

To put that generation size in the Australian context, it’s about the same as the combined capacity of Loy Yang A and B. These dirt-burning brown-coal power stations provide 47 percent of Victoria’s electricity and about 25 million tCO2-e per year. Hinkley Point C is a massive energy development.

A wholesale price of £92.50/MWh has been agreed for the first 35 years of the life (which will drop to £89.50 if a new reactor at Sizewell is built). This price includes mandated funding of future decommissioning and waste management. Should market prices rise above this, the operator will return the difference. Should prices fall below this, the operator will be topped-up.

What has been achieved in the UK is worthy of praise. This deal provides certainty for both investors and consumers. Without certainty there will be no large capital investment in clean energy of any flavor. This reform structure should be of interest to anyone who wants to see clean energy of any kind enter private markets at appreciable scale.

As Kirsty Alexander of Nuclear Industry Association in the UK stated:

The Hinkley deal represents the first achievement of the Electricity Market Reform, designed to attract non-public investment into areas the market would not in itself invest in.

Left to its own devices, the market is more likely to invest in gas power stations. Capital costs are low, and although the cost of the fuel is high and unstable, these costs can be passed on to consumers. Low carbon technologies like nuclear and renewables have the opposite character. They have high capital costs and low running costs. This is why the International Energy Agency said that EMR was essential to delivering a transition to low carbon energy.

This harks back to remarks made by Professor Tony Owen regarding the prospects for nuclear investment in Australia, previously reported here:

If the CEO of, say, Origin Energy said to the board, “I’ve got a great idea. Let’s spend $5bn of the company’s money, for which we will not start seeing a return for at least 5 years,” he would be laughed at. In fact he would probably be sacked.

The UK market reform to appears to have succeeded in overcoming this barrier. The very fair question remains: Is this a good or a bad price? As ever, comparison is the only sensible way to answer it.

Compared to current wholesale prices in the UK, it looks awful. It’s nearly double, and close to the retail price. This comparison is relevant if such prices were expected to continue. They are not. Dirty coal provides about 40 percent of UK electricity at currently much cheaper prices. This situation is coming to an end. So retrospective comparisons are of limited use. It is more informative to compare to the other options moving ahead.

Hinkley is expected to be competitive with new combined cycle gas in the UK. (Government estimates range from £89-£111 MWh.) That’s a big tick. The strike price is also lower than the government-agreed strike prices for other clean energy options. This is shown below (and discussed in further detail in a recent post from Mark Lynas).

The above prices are a little soft on the clean energy competition, as they do not incorporate system costs like grid enhancement for effective management of intermittency or provision of backup.

The Hinkley price has no impact in 2013; it will have an impact in the 2020s, right through to 2080! With a 60-year rated life, the UK is bringing on 3.2 GW of clean electricity price certainty for the first 30 years. That’s impressive. If one also considers the phenomenally large advantages of nuclear in terms of land use and resource consumption and the absence of air pollution, this is a clean energy project that deserves support.

Impression of the Hinkley C development. Nuclear remains unbeatable for massive, reliable clean energy on a minimal footprint. 

Commentator George Monbiot bemoaned that the UK has not instead moved to commission its first PRISM fast reactor that will operate using waste as fuel. I share his enthusiasm for the technology and his frustration at the recent silence. I also believe and hope that these two nuclear projects are far from in competition with each other in the UK. Hinkley Point C is 3.2 GW in size, equivalent to around 11 PRISM reactors. GE Hitachi currently wants to construct two of them in the UK, the first two commercial builds in the world. The only outcome of nuclear versus nuclear is a loss in the fight against climate change, and the environmental imperative for clean energy is far greater than that for near-zero waste.

I argue that nuclear power represents great long-term value when all the reliability and environmental benefits are considered against a relatively small premium compared to fossil fuels. Sadly, “great value” and “too expensive” are perfectly capable of co-existing. On that point Monbiot is also right that it’s still too damn expensive. We need to replace every coal plant in developed nations and displace every future coal plant in a fast growing developing world. This is not the type of price that will do it.

In the case of the UK, market reform has supported the great value of nuclear over the considerable up-front expense. It seems adequate political consensus on the following key points was required:

•Climate change is real and urgent

•Emissions must be cut deeply. That cannot all be done with offsets; clean electricity is required

•Energy policy that actually provides for a certain and secure future is required

•Nuclear power is required to meet the challenges outlined above

I only wish turn-key political solutions were as exportable as turn-key nuclear solutions. Consider Australia:

•Our newly governing Liberal/National Coalition has a track record of comparatively greater nuclear support. It also has current leadership that has downgraded climate change to a national irritation for which the cure seems to be some sort of aggressive cultural and intellectual de-lousing.

•Our recently deposed Labor Party took huge political hits to put a price on carbon dioxide emissions, while maintaining opposition to nuclear power. (I am very impressed and encouraged that senior Labor figures are putting this policy position forward for reconsideration under the new leadership.)

•Our Australian Greens shout “climate emergency” (and I agree), only to take a deep breath and attack nuclear power as seemingly the only thing worse than climate change.

So, take a political mess like that and prices at anything like £5,000 per kW and what have you got? Little chance for large-scale clean energy, that’s what. Or, take developing markets where the imperative to supply lots of electricity right now far outweighs concerns about climate or pollution and what have you got: construction of everything and anything, including a massive new fossil sector that our climate budget can ill-afford.

What we need is for nuclear power, as the only sufficiently scalable solution, to reach a price point where it becomes the true no-brainer for replacing and displacing coal and then gas. It’s amazing how much a massive and undeniable price advantage can cut through political quagmire. High prices require equally high political consensus and the opposite is also true. Unless we get prices that drive a rapid expansion all on their own, we are likely to continue to see failures globally of the type Australia has seen since 1960: growth in clean energy, with bigger growth in fossil fuels.

Australian electricity generation by fuel type 1960-2008 (Environment Victoria 2011)

Furthermore, it seems nuclear opponents are increasingly dressing up their ideological bias in the economic case as their traditional arguments fail. Their economic arguments are unbalanced and with a clear agenda and they are not completely wrong!

The recent US experience with a gas boom is the case in point of what needs to happen with clean energy. There, electricity production has moved strongly away from coal, and emissions have fallen to 1994 levels. It’s the right example, with the wrong fuel that falls well short of the outcome we all need.

The two lines heading up in the US are wind and gas, with gas doing much more than wind. Image from The Breakthrough Institute Report “Coal Killer.”

The lessons from the UK this week are hugely encouraging. With the right positioning of politics, electricity market reform for large scale clean energy is possible. What we need now is for nuclear industry players to speak to us and tell us how, over the coming years, they are going to deliver this product at lower and lower prices, to ease the political pressure and make commissioning great big gobs of clean energy the no-brainer it needs to be. Will this come through Generation III+ small modular reactors (SMR), integral fast reactors (IFR), liquid fuel thorium reactors (LFTR) or simply big learning gains through the new build currently taking place? (We are already seeing the latter in China and South Korea.) Hopefully, lower prices will come from all these places and more.

Nuclear power is clean. It’s safe. It’s efficient. It can make a big difference, fast. Waste can be managed until we use it as fuel, and fear of radiation can be defused. It is, as I have said, a great value. What advocates cannot do is make it cheaper than fossil fuels when it isn’t, in a world with weak consensus on climate change action and lackluster energy planning.

We need to keep working for that climate consensus, for sensible long-term policy to support massive clean energy and to overcome the ill-conceived objections to nuclear. At the same time we urgently need a stronger and more visible vision and plan for better nuclear prices and faster roll out, and this needs to come from the industry.


Ben Heard is the director of Decarbonise SA, dedicated to moving South Australia to zero greenhouse gas emissions, where this post originally appeared


  • Very sensible arguments.  However, I don’t think the industry is the problem.  Industry can’t step up to implement innovative nuclear solutions when confronted by 10 years and $1Billion to jump through regulatory hoops and mountains of paperwork for each new product.  Big things have to change in the political arena or else industry dollars will simply stay away. Ridiculous regulation must go and be replaced by smart, efficient regulation.  Fear of things nuclear, bordering on superstition where low-level radiation is concerned, must be dispelled. We need a new cultural and political consensus before industry can make this happen. 

    Given the right environment, private capital and entrepreneurial energies can bring new ideas and designs forward to be sifted and sorted in a competitive and dynamic marketplace.  Just look at what free market competition did in the computer / IT industry. Lower the barriers and this can happen. 

    In short, I see political challenges stemming from cultural ignorance, high levels of misinformation, and push-back from Big Oil as the biggest barriers to be overcome in the quest to make nuclear-power systems cheap and fast-to-market.

    By Steve on 2013 10 29

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    • I don’t think the industry is the problem… We need a new cultural and political consensus before industry can make this happen. 

      I happen to believe the industry is primarily the solution, and I concur with the barriers outlined in your comment. Working on the cultural and political consensus is what I and many other non-industry people do very actively.

      We need the industry to join us more actively than it currently does, rather than wait for us to succeed. We need more support than we are getting. Providing very clear plans and visions of just what could be achieved were barriers to be broken down would be a great start.

      By Ben Heard on 2013 10 29

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      • Communication is a two-edged sword, Ben. I think the work you and other non-industry people do toward cultural and political consensus has not gone unnoticed by the industry. Its one thing to make specific or general suggestions such as the clarifications you have requested here. Its easier to advocate specific possibilities than vague generalities. “The Industry”—more likely speaking as individual consortia—could then reply on corporate sites, press releases, or (perhaps) on WNN. But one problem for any closer collaboration will be the perception of you or any of the rest being perceived as corporate shills. Distance has its virtues. And perhaps the industry does not wish to be perceived as whining about government regulations. Fossil advocates will term such as being anti-safety.

        Though it is curious. I see in WNN today China rolling out new nuclear plant at about the same rate the West rolls out new coal: about 4 to 6 years. And Jordan hopes to do the same with Rosatom. Here in the U.S. the NRC last December put approval of all new nuclear applications in doubt while it reconsiders its confidence in long term waste management arrangements over the next two years. Our Congress held hearings this summer on the draft Nuclear Waste Administration Act (NWAA S.1240), a bipartisan product of Congress and the President’s Blue Ribbon Commission on America’s Nuclear Future. American readers might advocate their congresspersons to support this measure.

        By Ed Leaver on 2013 10 30

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        • Ed, I think “the industry” (a term we will need to accept for this discussion) is in a very difficult and challenging position in this regard, and everything you have said is correct.

          Your second half nails the issue though which is this: how’s the current strategy working out for us? Not so well, and it’s time for change.

          So long as I remain independent of the nuclear industry I will happily sink the boot in as I feel required. I am also proud to associate with what I think is a fantastic technology and a lot of very smart, driven and ethical people. What I actually mean though is that I can only work with what I either find or can develop myself from analysis. It would be good to find some much more developed concepts and plans.

          It is my opinion that the time has come for “the industry” to assert, very pro-actively, not merely their right to exist and operate without disproportionate constraint but in fact their crucial role in solving the energy/climate conundrum for which an innovative and supportive regulatory environment is in the best interests of the whole damn planet. That would carry great weight if accompanied by descriptions of what such accelerated innovation could achieve and how it is currently stifled. The solar industry does this much, much better with a product that will always be vastly inferior.

          Were I in industry shoes, I would be spoiling for a public fight with the fossil sector about safety. I wouldn’t be whining, I would be painting a picture of what we are losing from constrained innovation and over-protection in nuclear leading to fossil fuels being waved through.

          The blowback would be predictable, which means it can be prepared for. The nuclear technology industry needs to do something counter-intuitive after so many decades of being slapped: defy expectations by making the biggest target of itself imaginable, backed by a strong plan, and start the mother of all public conversations.

          By Ben Heard on 2013 10 31

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  • This absurd nuclear propaganda is undermined by the links you cite from your own Breakthrough Award winner Mark Lynas. The contract price for nuclear is based on a 35 year contract, while the comparison just slightly higher prices for renewables are for 15 year contracts. From Lynas: “Just to be clear what we’re talking about, ‘strike prices’ are guaranteed prices for 15 years for each renewable technology.” Obviouly if the costs of renewble projects were amortized the same time period, they would beat this boondogle without saddling the world with nuclear waste, nuclear weapons proliferation hazards, the risk of meltdown and all the other unacceptable hazards associated with nuclear power.

    And according to that same Lynas article, the contract prices for renewables that go on line before any new nuke could possibly be built will be well below the prices shown in this article, making your argument even weaker.

    When are you guys going to get it? Nuclear power is dead. No amount of lies and nuclear industry funded propaganda will ever save it.

    If you are going to peddle completely misleading propoganda, you should at least be sophisticated enough to not completely discredit your propganda with links from your own award winners.

    By Fred Unger on 2013 11 03

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  • Thanks, Fred. I think it generally unwise to confuse price with value. For instance, the Solar Technology Association has apparently offered Secretary of Energy and Climate Change Edward Davey a strike “price” of $138/MWh in 2019. That energy might in fact be a good value if Mr. Davey can get it. And if he can use that energy when he does. One might also be mistaken by confusing the incremental cost of using a MWh of intermittent non-dispatchable energy at current market penetration of but a few percent, with the incremental cost using an incremental MWh of intermittent non-dispatchable energy when its market penetration is above approximately 20%. Surprisingly, this is not a small distinction.To put things on a like-for-like basis, suppose the Renewable Energy Association incorporated a subsidiary—call it REA Ltd.—formed for the express purpose of marketing electric energy to the UK. The negotiation might start something like this:

    Mr. Davey: “So good to meet you, Mr. REA, do sit down. Here is my problem:  I shall need to purchase 2 TWh electric energy each year for 35 years starting in year 2023. This electric energy must be produced at total carbon emission of no more than 50 tonnes CO2 per GWh, and must be delivered into my grid upon my customers’ demand, although at no time shall my customers demand more than 3.2 GW peak. All costs for hardware, real estate, water and sea rights, storage, waste management, decommissioning, carbon capture and storage, and any additional transmission capacity needed to tie your electric energy into my electric grid is to be borne by you. Further, I fear whatever solution you propose must be able to scale 25-fold within those 35 years. Can you provide such electric energy service, and if so, at what cost?”

    This is not an idle question. Mr. Davey is tasked with keeping Britain’s lights on at low cost and very low carbon emissions. He must ask essentially the same of any electric service provider, including himself.

    By Ed Leaver on 2013 11 03

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  • Fred: Nuclear power plants have lifetimes of 40+ years. By contrast, wind turbines have lifetimes of 10-20 years, while solar panels have lifetimes of perhaps 30 years, but degrade by about 1% per year.

    Does it make sense to have a 35 year contract for a wind farm that will only last 20 years?

    By Adam on 2013 11 05

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    • Does it make sense to have a 35 year contract for a wind farm that will only last 20 years?

      Much hidden there. Wind turbine maintenance is the wind farmer’s job; he can factor it into his cost. Mr.Davey’s job is keeping the lights on at low carbon and low cost. Wind and solar power is useful to him only to the extent he can manage demand and provide adequate storage and fossil backup. Wind contracts usually ask Mr. Davey bear all costs for grid integration, hydro dams and generating equipment, fossil plant capitalization, fuel, operations, and emissions management, including carbon capture and storage. Mr. Davey is also usually asked to purchase wind power whenever it’s available, and bear the cost of curtailing other sources. Mr. Davey should probably enter into wind and solar contracts for no longer, and for no greater amounts, than he can reasonably project these costs. That wind turbines and solar panels may be quickly installed and turbines die young is but further argument against the need for long-term renewable contracts.

      By Ed Leaver on 2013 11 05

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  • I also have mixed feelings about this reactor project.  While it’s great news that Britain is proceeding with new nuclear, the agreed-on price is, frankly, an embarrassment, which plays right into the anti’s strongest (economic) argument.  It’s too high by a clean factor of 2.  As a nuclear advocate, I find it very hard to accept that nuclear could ever cost that much.  5,000 US dollars/kW was hard enough to accept, let alone 5,000 pounds.  Not too long ago, they were promising ~$2,000….
    As many have pointed out here, these high costs are entirely due to absurd regulations that are thousands of times more strict than those applied to fossil fuels, in terms of dollars spent per life saved (or per unit of public health/environmental benefit).  Unlike fossil fuels and other industries, cost/benefit analyses are simply not applied to nuclear regulations, which would utterly fail any such evaluation.
    Advanced reactors (e.g., Gen4, thorium, etc..) will not solve this problem.  That would be trying to apply a technical solution to what is a political/regulatory/public-prejudice problem.  No technology will be able to compete on such an unfair playing field (with miles of paperwork required for even the simplest tasks, for nuclear only).
    We need to demand an end to this absolute double standard, where even a tiny chance of nuclear pollution is deemed unacceptable and must be avoided at any cost, while fossil fuels get to pollute continuously, for free.  We need to demand a complete review of all nuclear regulations, and subject them to cost/benefit analysis.  We need to eliminate extremely onerous construction/fabrication QA requirements that are uniquely applied to the nuclear industry (e.g., NQA-1).  After all that, we need to get a modular reactor (SMR) assembly line going (probably in China).  LWRs would be fine….

    I speak about all these issues at:

    By Jim Hopf on 2013 11 05

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  • Ben, China is building two EPR’s at Taishan.  They are on time and on budget with an estimated cost of $7.2B ... for both reactors.

    Why?  If you can answer that question you will have done everyone a service.

    By SteveK( on 2013 11 07

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    • I cannot answer your question definitively. I would hope Areva could and would but they won’t. Why not? Besides being arrogant? Even with Atomic Anne put out to pasture? On a related subject; Lightbridge is developing a new, all-metallic fuel rod for PWRs. It will enable a 30% uprate in power for plants designed to use it. They say they have the data for an EPR uprate from 1.6G to 2.1Gwe. Larger steam turbines and generators are needed, but the plant is basically the same. (Also, the fuel operates at 1000*F cooler than current Uoxide fuel, making for a huge safety upgrade.) And so, we get a 30% uprate with relatively minor increased capital expenditures. Coming soon to a nuclear power plant near you. (China is in discussion with them re. a site large enough for 3 reactors, but where they need the output of 4.)

      By Paul Wick on 2013 11 09

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  • Hypothetically, one might wish to allow the possibility that a dollar US might stretch a bit further in China than in the US. I’m more concerned with “on time and within budget”—whatever they are - and if not, how much overshoot.

    By Ed Leaver on 2013 11 09

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  • Your article is pure propaganda. You simply deny the safety issues by saying nuclear is safe and clean, while the demonstrable fact from experience is that it is neither. The cost of relocating half the population of Somerset if this thing blows has not been considered in any calculations. And don’t say it can’t blow, because that’s what was said about Fukushima. And Chernobyl. Nuclear energy is a disaster waiting to happen and there is no other energy source which renders whole swathes of land unuseable for all time.

    By Terry on 2014 01 12

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    • there is no other energy source which renders whole swathes of land unuseable for all time

      Chernobyl had an estimated population of 500 in 2010. That’s about 3% of the pre-disaster population, but still hardly “unusable for all time.” Next to desertification, sea level rise and other negative impacts of fossil fuel-induced climate change, it doesn’t even begin to compare.

      By L.J. Lim on 2014 01 15

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      • For that matter, do you believe the large amounts of land taken up by solar panels or wind turbines is usable for any other purpose as long as the power is needed?

        By L.J. Lim on 2014 01 15

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      • The land taken up by wind turbines can be and is used for farming. Solar panels are mostly placed on roofs, thus taking up space that would otherwise be doing nothing. Chernobyl was in a sparsely populated area of a large country, whereas Somerset is a different proposition. And there is still no satisfactory solution for the nuclear waste problem.
        Let’s just forget this deadly and dead-end nuclear technology and move ahead with the renewable infrastructure that gives the human race a future.

        By Terry on 2014 01 16

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