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Hinkley branded expensive mistake

Hinkley branded expensive mistake

Npower chief leads charge against deal to build £24bn nuclear power plant

Danny Fortson Published: 9 August 2015, Sunday Times.

A SENIOR energy executive has condemned Britain's first nuclear power
plant in a generation as an "expensive mistake" that could haunt our
"children's children".

The broadside from Paul Massara, chief executive of energy supplier
RWE Npower, is the highest profile attack yet on the controversial
£24bn project. It comes as the government inches toward a deal with
EDF Energy, the French nuclear giant, and two Chinese state energy
companies, to finance and build two reactors at Hinkley Point,
Somerset.

The plant, the first since the Sizewell B reactor was completed in
1995, would take 10 years to build. It would be underwritten by 35
years of subsidies tacked on to household bills. David Cameron has
targeted a visit by Chinese president Xi Jinping in October to sign
the accord.

Massara has called for an "Office of Energy" to assess whether Hinkley
and other big policy bets make sense given the changes sweeping
through the energy industry, from the rapid fall in green energy costs
to efficient homes and appliances that are reducing demand.

Massara said: "We will look back and think that nuclear was an
expensive mistake. It's one of those deals where my children, and my
children's children, are going to be thinking, 'Was that a good deal?'
These big central planning bets are likely to be the wrong answer."

The government has guaranteed that EDF can sell electricity from
Hinkley C at £92.50 per megawatt hour. This will rise with inflation,
so that by its first year of expected operation in 2026 it will have
jumped to about £120 an hour - nearly three times today's wholesale
rate.

British energy consumption, meanwhile, is falling by 1%-2% a year
thanks to better insulation and more efficient white goods.

Cables under the Channel open the possibility of a surge of cheap
electricity from the Continent. Amid those changes, making a
half-century bet on a single plant looks questionable, Massara said.
He added: "We must allow innovation and new technology to find its
way."

EDF said last night that relying on intermittent renewables or the
vague promise of innovation is not the answer. And with plants still
needed for times when the wind doesn't blow and the sun doesn't shine,
"nuclear remains competitive with any other technology".

The company added: "This is before we count the enormous benefit of a
multibillion-pound investment in Britain, with the impact on jobs,
skills and our global industrial competitiveness. Hinkley Point C will
provide 25,000 job opportunities during construction and supply 7% of
the UK's electricity demand."