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Commentary: Nuclear power plant construction in Britain: A bottomless swamp

Dark clouds are once again hovering over the planned construction of the Hinkley Point C (HPC) nuclear power station in Britain, which has attracted much attention as the most ambitious nuclear power project in Europe. Despite the extraordinary high estimated costs of building the plant and generating power there, the project has managed to survive so far with the support of the successive governments.


From last year to this year, doubts about the costs and related technological problems have surfaced again, creating fear that the government may carry out a “reexamination” of the project anytime soon. Such concerns present a serious threat to Hitachi Ltd. and other Japanese firms that are betting their futures on nuclear power plant construction in Britain.


The root cause of the uncertainty surrounding the HPC project lies in Electricite de France (EdF), France’s government-owned, largest power utility, which is building the plant. When British Prime Minister Theresa May gave a go-ahead to the project in September 2016, various tricks were used to impress the public with low construction costs, which were initially set at £18 billion (¥2.7 trillion), with some investment from China General Nuclear Power Group thrown in.


Within less than a year after the plan was announced, EdF started revising cost estimates and other details, which are nothing surprising given the French utility’s past behavior. In July last year, for example, EdF said the construction costs will increase by about £1.5 billion. Furthermore, the utility said that the foundation work for the site of the plant would have to done over again and that the completion of the first reactor and generator would be delayed by 15 months.


The latest plan envisages completion of the power station in 2025 at the total cost of £20 billion. A reporter of a British business newspaper says, however, that nobody will believe any of these figures.


The HPC nuclear power station will comprise two third-generation European Pressurized Reactors. The trouble is that this type of plant is not yet in operation anywhere in the world. EPRs are currently under construction at the Olkiluoto nuclear power plant in Finland, the Flamanville nuclear power plant in France and the Taishan nuclear power plant in Guangdong province, China. But the startup dates for all three have been postponed from the original targets.


The date for a trial-run of the Olkiluoto plant was originally set for 2009 but after a series of delays, the target date now is May 2019 — already a delay of 10 years. The construction costs, originally estimated at €3 billion, has nearly tripled to €8.5 billion (about ¥1.15 trillion).


For the Flamanville plant, the trial-run date has been pushed back by at least six year while the costs have also more than tripled to €10.5 billion. The construction schedule has also been revised for the Taishan plant in China, which was supposed to become the world’s first operating EPR facility in 2016. Late last year, moreover, a defect was discovered in the deaeration equipment of a reactor, casting doubt about the current target of starting operation by the end of 2018. All these incidents point to chronic cost increases and schedule delays associated with EPRs.


Concerns about the costs related to the HPC station are smoldering within the British political circles. The contract between the May administration and EdF includes a “contract for difference” provision, which calls on the British government to purchase electricity from EdF at a rate higher than the market price, with the aim to make the ostensible costs look lower. Under that provision, EdF will receive £92.5 per 1 megawatt-hour of electricity — twice the market price. Moreover, the contract for difference clause is to remain valid for 35 years.


In the British House of Commons, both ruling and opposition members resent the contract, which they said will only bring exorbitant profits to the French firm. In November, a special audit committee of the House demanded that the government rewrite the contract, claiming that the British taxpayers will have to pay as much as £30 billion to EdF — about ¥4.5 trillion.


In this situation, the renewable energy industry has launched an attack against the proponents of nuclear power by offering low prices. An offshore wind power generation company recently contracted with the British government to supply electricity at £57.5 per megawatt-hour for 15 years. Its claim for contributing to prevention of global warming, coupled with supplying electricity at a lower price and in a safer way, has helped those calling for a review of the HPC project gather strength.


The aforementioned British journalist points out that much has changed since the original first of the Hinkley Point reactors started operating in the 1960s. Nobody could imagine the shale oil revolution and the sharp declines in the costs of renewable energy sources, and these drastic changes have made nuclear power generation obsolete, the journalist says. While Germany and France are shifting away from nuclear power, Britain pushes nuclear power generation. It has adopted the policy citing the need to achieve the goal of both ensuring a stable energy supply and reducing greenhouse gas emissions.


In addition to the Hinkley Point C project, plans are being floated to construct the Wylfa Newydd nuclear power station on Anglesey Island in northern Wales and the Sizewell C nuclear power plant in Suffolk, England — quite a rare expansion of nuclear power in an advanced industrial country.


Undertaking the construction of Wylfa Newydd is Horizon Nuclear Power, a British energy company wholly owned by Hitachi Ltd. of Japan. The British government is now faced with an unexpected rise in the construction costs, due to additional safety measures necessitated by the nuclear disaster at Tokyo Electric Power’s Fukushima No. 1 nuclear power plant in March 2011, such as the hardening of the plant site with concrete. This has proved once again that nuclear energy is no longer an inexpensive means of generating electricity in comparison not only with fossil fuels but also with renewable energy sources.


May decided on the HPC project shortly after taking office when her approval rating was high. Now, however, the future of her government is not certain and the situation is getting worse with Britain’s coming exit from the European Union crushingly weighing on it. But she has kept silent on a series of demands for a reexamination of the project.


In France, meanwhile, President Emmanuel Macron picked Nicolas Hulot, an ardent environmentalist, for the post of minister of ecological and solidary transition. Hulot’s current interest is pushing for an expanded use of electric vehicles. But his stance of calling for phasing out nuclear power generation has not changed.


The uncertainty of the future of the HPC project demonstrates that there are too many uncertain factors for Hitachi to think of what next step to take. There are a mountain of things on which the company must carry out in-depth studies before betting its future on present British politicians.


This is an abridged translation of an article from the March issue of Sentaku, a monthly magazine covering political, social and economic scenes.

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