Hinkley financial crisis shows UK folly on new nuclear

The Scottish National Party has said the financial crisis surrounding the future of the Hinkley Point C nuclear plant demonstrates yet again the folly of the UK government’s decision to spend huge amounts of public money to subsidise new nuclear power stations. The future of the Hinkley Point C nuclear plant in Somerset is facing a financial crisis as Areva, a shareholder in the project and the designer of the proposed reactors, has seen its shares plunge by almost a quarter.

Areva warned it must suspend future profit predictions because of problems centred on a similar power station project in Finland. Both that scheme at Olkiluoto and another at Flamanville in France are massively over-budget and over-schedule, forcing Areva to consider whether it needs an injection of new cash to survive. Hinkley Point C in Somerset will be the first new nuclear power station to be built in the UK in a generation, and could be eligible for consumer funded payments of around £1 billion per year – totalling around £35billion over the 35 year length of the contract. This is compared to the 15 year contracts being offered to renewable energy projects.

The European Commission has previously warned that Hinkley C will push up consumer bills, stating the power station “could hardly be argued to contribute to affordability – at least at current prices, when it will instead and most likely contribute to an increase in retail prices”. The Commission’s warning was backed by the Delivering Renewable Energy Under Devolution report, published late last year, which found that the UK Government’s recent decisions on nuclear power could increase energy bills.

Commenting, SNP Energy spokesperson Mike Weir MP said:

“This demonstrates yet again the huge folly of the UK’s decision to spend huge amounts of public money to subsidise new nuclear power stations. Despite the mounting evidence that it is hugely expensive with other stations going vastly over budget and  being years behind schedule the UK government are determined to continue to throw billions of pounds into promoting new nuclear. By diverting money away from renewables to new nuclear the UK Government’s plans are also damaging the renewables sector.

“Hinkley is a bad deal that will push up bills and cost the taxpayers a fortune for many, many years to come.

“Scotland neither needs not wants new nuclear. We have huge potential in renewables that can generate clean green energy for the future.”