Hinkley Point shows how monetary policy and fiscal policy have merged

Overnight has come what may prove to be a really good piece of news for the UK economy. One way of knowing this is to note that there are vested interests against it as illustrated by this from the BBC.

Hinkley Point delay is a high-stakes bet by government

Actually I agree with that but for opposite reasons. You see the original plan was a high stakes bet because of this.

Oct 2013 – UK government agrees £92.50 per megawatt-hour will be paid for electricity produced at the Somerset site – around double the current market rate at the time.

I always thought that we ( the UK taxpayer) were overpaying for this future supply of electricity which at full output would be around 7% of the total UK supply. Since then the world of power supply has changed in many ways. One of these is represented by the way that the oil price back then was in an era christened on here as being like it was influenced by a US $108 per barrel tractor beam. Now as I type this Brent Crude Oil is below US $43 per barrel.

We cannot directly translate lower oil prices into lower domestic energy costs for two reasons. Firstly we use related but not the same products such as gas for example and secondly we are looking a long way into the future. But there have clearly been ch-ch-changes. For example if we look at the official data for industrial energy prices (excluding climate change levy) the index was at 123 in 2013 and 124.9 at the start of 2014 but was 106.4 in the first quarter of 2016. So if we were overpaying back then the situation has got worse.

I found myself in City-AM today with this view.

Hinkley Point looks ever more like an economic disaster waiting to happen…

Monetary Policy

This now comes into the story and let me highlight it by something which did not change this morning. From the Bank of Japan.

The Bank will purchase Japanese government bonds (JGBs) so that their amount outstanding will increase at an annual pace of about 80 trillion yen.

This has led to a situation where as I discussed yesterday Japan can borrow at -0.17% for ten years and indeed did borrow at 0.35% for forty years earlier this week, We can see a similar situation in Europe where the ECB (European Central Bank) is buying some 80 billion Euros of bonds a month as it too chomps away on them like a powered up Pac-Man. This too has led to a large grouping of negative bond yields and even Italy with its banking problems can borrow for 10 years at 1.2% as I type this.

So the “bond vigilantes” were routed in the same manner as General Custer at Little Big Horn. We know live in a world where we see both negative interest-rates and yields fairly regularly. There are various estimates around of how many bonds are now offering a negative yield and the largest I have seen was for US $11 Trillion but of course the exact number changes frequently.

The UK Specifically

Apart from a brief post Brexit referendum surge in UK Gilt prices in the 3/4 year maturity zone the UK has avoided negative Gilt yields. However we are seeing what are for us all time lows in yield and highs in prices. Let me illustrate with some tweets by me from yesterday.

The UK 5 year Gilt yield had a closing low of 0.3% today! Think of fixed-rate mortgages if you think that doesn’t matter.

The UK ten-year Gilt yield fell to 0.7% as we saw all-time lows in such measures. However I was already thinking of the implications for Hinkley Point.

With the thirty-year UK Gilt yield at a mere 1.6% it must be cheaper for the UK to build itself!

What was happening with Hinkley Point?

The BBC put it thus about the funding.

French firm EDF, which is financing most of the £18bn Hinkley Point project in Somerset, approved the funding at a board meeting………They are also concerned that the plant is being built by foreign governments. One third of the £18bn cost is being provided by Chinese investors.

Actually there were doubts about whether EDF ( mostly owned by the French government    ) could afford the project including on its own board.

Ahead of Thursday’s vote on whether to approve the project, an EDF board member, Gerard Magnin, resigned, saying the project was “very risky” financially……Earlier this year, EDF’s finance director, Thomas Piquemal, had resigned amid reports he thought Hinkley could damage EDF itself.

The fundamental issue here was that it was UK policy under Chancellor Osborne to reduce UK borrowing and the national debt so we ended up with this as described by Michael Liebreich.

Between them, chancellor George Osborne and DECC secretary Ed Davey agreed that the private sector would bear the risk of constructing and operating the project, at a stroke doubling its cost of capital and cost of power.

Meanwhile in a universe far far away we could have been taking advantage of France’s ability to borrow extremely cheaply ( ten-year yield 0.13%) although the irony is we did not know hat back in 2013! There would be a wry amusement in Mario Draghi and the ECB financing UK nuclear power.

Could EDF build it anyway?

There are genuine questions on this front as shown in this from Anthony Hilton in the Evening Standard from January.

But its two previous attempts to build this kind of reactor have been troubled. One in Normandy was budgeted to cost €3 billion (£2.8 billion) and be ready by 2012 but it will now not be finished until 2018 and the cost has more than tripled to €10.5 billion. The other in Finland is 10 years behind schedule and at least €5 billion over budget.

What could go wrong?

Comment

The financial world has changed so much since 2013 and I gather that the world of nuclear power has to as we face the fact that the words White and Elephant may be used as often as Hinkley and Point. The simple fact is that we could borrow the money for the project much more cheaply as a nation than the proposal here which pretty much looks like a ruse to keep the funding and cost off the UK balance sheet. how did a similar effort called PFI (Private Finance Initiative) end up? If we did the borrowing ourselves then currently the 50 year Gilt ( 2068 actually) yields less than 1.5% according to Investing.com.

The technology effort is much more complex as we have some ability via Rolls Royce and submarines but we have not ventured into this arena for decades. I know that some of you have expert knowledge in this area so I will be interested in your views on newer technologies including nuclear. unfortunately the clock is ticking because successive UK governments have ignored the area of energy supply putting us in something of a mess.

The IMF

An official report has been highly critical of the IMF. I would just like to repeat what I wrote back on June 8th 2010.

It has plainly changed from an organisation which helps with balance of payments problems to one which helps with fiscal deficits. Whilst this may suit politicians, taxpayers and voters should in my view be concerned about the moral hazard of one group of politicians voting to increase funds available to help another group of politicians which may include themselves.

Me on Official Tip-TV

 

 

 

 

 

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42 thoughts on “Hinkley Point shows how monetary policy and fiscal policy have merged

  1. I know nothing about the technicalities of nuclear power, but I am wondering whether the new government has decided that it would be much simpler and cheaper to allow existing stations to live on (in a carbon-unfriendly way). I can see Didcot power station from where I work and it reminds me every day of the fact that it only closed because of agreements on climate change.

    • Hi James

      That is an interesting idea. If only we could find a way to use coal efficiently and cleanly as we have lots of it. We could get power and improve the balance of payments in one fell swoop.

  2. Shaun,

    As ever, great reporting which no official journalist wants to do (what do they do all day, anyway, as their articles can only take minutes to write?).

    I can see the need for power diversification but for something which will be too exorbitant and which the tax payer will have to pay through the nose for, it’s an absolute scandal. And as you say, it will only provide 7% of the nations consumption. Oh, and don’t forget it’s supposed to be completed by 2025! Yeah, and I have a money tree in my garden.

    Finally, well done on holding the IMF’s feet to the fire over the years. It’s a shame that it’s taken so long for a report to come out covering what you have said for sooo long. Well done on being ahead of the curve, again!

    • Hi Robert

      Thank you, it is a shame that so many media outlets essentially copy and paste their work. As to Hinkley Point it seemed an expensive scam from the beginning which mostly was designed to avoid turning up in the national debt.

  3. Having been involved in, and often responsible for, major capital expenditure projects (not of this magnitude however, think building new factories, not power stations) in the private sector without any political involvement, I can tell you that Hinkley Point would have been thrown out the window a long time ago. The timeframe and economic justification do not stack up and it should be abandoned. A couple of gas powered power stations could be up and running for less cost and in a shorter time. Modification and cleaning up existing power plants is another option. I look forward to reading comments from readers who have expertise and knowledge in this area.

  4. How about the UK Govt finances it from bonds, out to 2068 as hinted at, and charges a premium on the power produced such that between 2030 and 2068, it pays for itself.

    • I can only assume this is something to do with avoiding public debt and maintaining some kind of nuclear capability in line with the Trident decision. Germany is phasing nuclear out by 2022, but of course does not possess nuclear weapons and runs a small budget surplus.

  5. Hi Shaun
    I won’t go on about ‘climate change’ ( no longer global warming, note) , you know my views about this scam.
    The world is swimming with gas, its cheaper, quicker to build than current nukes by a factor of 400%. Its rather obvious what the UK should be doing. The world is also swimming in coal and with FGD and scrubbers on newish plant is pretty ‘clean’ if you ignore the ‘plant food’. Why we closed perfectly good plant is criminal.
    Nukes have a role, but it requires the UK to redevelop its skill base and then build smallish ones ourselves with the cheap finance now available, and hang ‘public debt’ as its all being monetised by the BoE anyway. Hinkley is terrible, from both engineering and financial viewpoints.
    Unless we do something quickly the lights will be going out. The system will be completely over-supplied on windy summer nights and utterly devoid of capacity on cold wind-less winter days , within the next 3/4 years. Its that desperate. Unless this new government wakes up to the fact it needs proven electricity know-how in the ‘corridors of power’ ( pun unintentional) its literally ‘lights out everyone’.

    • Hi JW

      Is there no progress on storing extra energy ( aka solar and wind on a summers day like today…) ? As to coal I was wondering about that earlier, how efficient can it be made now do you think?

      Meanwhile I remember back in the day watching an episode of the BBC’s Horizon when it had an episode of expected global cooling which means we have expected pretty much everything.

      • Hi Shaun, I found a 1970’s radio times recently which featured an editorial about a Horizon episode about the imminent ice age, and it suggested deliberately increasing greenhouse gasses to offset the plunging temperatures! Probably the same one you saw.
        Mind you back then they were also predicting a 15 hour working week by now as we utilise robots to enhance human productivity! It seems the only thing we can be sure of is our ‘experts’ poor powers of prediction.

    • What does “quicker to build than current nukes by a factor of 400%” mean?
      If the nuclear option was to take, say, 5 years, does your comment mean that we would have had the alternative 16 years ago?
      I suspect that you are really suggesting that it would have taken 25% of the time.

      • My use of 400% was shorthand to cover costs and build-time. Yes it was meaning CCGTs are at least 25% cheaper and take at most 25% of time to build than the best ‘off the shelf’ nuke ( which Hinkley most definitely isn’t).

  6. Always and everywhere nuclear is designed to run at base load. Given the current generation mix in the UK then the requirement is for mid merit generation.

    Nuclear basically drives the required mid merit into operating for fewer hours per year and this in turn raises the kWh cost of production from any new mid merit (the plant has less hours of generation to recover fixed costs)

    The most cost effective form of mid merit is diesel – but this flies in the face of environmental policy. The alternative is combined cycle gas turbines (CCGT). CCGT is technologically advanced and constructing it for mid merit/peaking operations is analogous to buying a F1 car and using it to go shopping at Tesco. Because CCGT burns gas then it also impacts the gas market due to the creation of large but unpredictable demand.

    Not only is nuclear expensive, but given current and planned UK generation mix, it drives up the cost of supplying demand further up the generation curve. This in turn drives up gas prices for all users.

    Nuclear is not needed for stability in the physical generation market. Its consequential impacts will be to create instability in the pricing of both gas and electricity.

      • Forget nuclear, keep coal on the system and plug any gaps with OCGT. Simultaneously increase incentives for load management and invest heavily in storage technology (if necessary directly subsidise batteries for facilities with solar power).

        If it works economically you have a technology that can be exported all around the world. If it does not work economically you have basically directed subsidies in pursuit of a bespoke solution to a low carbon economy.

        You can buy a lot of research and fund a lot of subsidies for £29 billion.

        • I’m sure someone brighter than me will show me a fault in my logic, but using thes figures for example, would it not be better for the government to give free solar panels to anyone who wanted them that had a suitable rooftop and then take a % of energy generated as payment. Ie, at £18bn, approx cost of solar install of £10k to keep the maths easy, thats 1.8 million households. Then the government takes 25% of all electricity generated from the power at no cost to cover the cost of borrowing the £18bn. The householder gets 75% for no cost.

    • Sorry, but deisel generation is only used for peak-lopping, its definitely not mid-merit, far too expensive. CCGTs are fine for mid-merit, and your analogy of F1 etc is completely wrong.
      The only reason new baseload generation forces plant into mid-merit is because we already have have far too much useless and expensive wind and other renewables which are ‘must run’, simply because you cannot turn them up/down/on/off.
      The best plant for operating mid-merit, which are the cheapest and most flexible for load following are good old coal generating plant. Pity that too much money is being made by too many people following the ‘climate change’ mantra to allow sensible economic and engineering decisions to be made.

      • “Pity that too much money is being made by too many people following the ‘climate change’ mantra to allow sensible economic and engineering decisions to be made.”
        _________________________________________________

        If the science is “SETTLED”, how come we have so many climate “scientists” still on Govt. grants/payrolls?

        • And why isn’t one of them a Physicist?
          Because they are all computer ( GIGO) modellists.

      • The most recent capacity auction was almost exclusively awarded to diesel generators – the government expressed disappointment in this outcome as they were hoping to attract new CCGT.

        New CCGT is up to around 60% thermal efficiency and this is high tech by any definition. Look at maintenance contracts which refer to Operating Hours Equivalent (OHE) – look at how many OHE are allocated per stop/start and then you can see how this compresses the maintenance schedule and consequently raises the cost per unit of actual output. All this extra maintenance is needed precisely because you are dealing with leading edge technology.

        Of course coal is the best plant for load following – but it is being shut down for political reasons. Fiddlers Ferry had a capacity contract but the owners found it more economic to close units down and pay NGC an early termination fee.

        • You run a capacity auction to attract just that ‘capacity’. Such capacity is there to be run for shoert periods during times of peak or other system distress periods. Unsurprisingly the most economic ‘new build’ capacity for such a market is ‘cheap to build, expensive to run’ diesel.
          By contrast CCGTs are more expensive per GW to build but much cheaper to run, therefore they are always on a system to run base-load , when new, and move into mid-merit as they grow older and less efficient than newer plant. That’s a merit order in practice.
          So yes, brand new, super efficient CCGTs would ideally be run base load and displace older CCGTs or coal plant. Nukes always have to run base load , you just cannot turn them on/off/up/down easily ( or safely). The problem we have is all the inefficient and expensive ‘renewables’ of every type which are all ‘must run’. They displace more efficient plant on the merit order leading to inefficient running of CCGTs etc and the premature closure of the older coal plan which are exactly what you want to load follow.
          The political ruination of the UKs integrated electricity system is almost complete. There are absolutely no proper economic signals in the system any more. Potential builders of required plant, like new CCGTs are scared off. It is a disaster which we won’t have long to wait to see in action.

  7. Hi Shaun
    It is my contention and hope that
    long before Hinkley is commissioned it will
    be a pointless exercise.
    Although renewable energy is
    currently inefficient we are on the cusp of
    enormous ch ch change. With the fast
    development of perovskite crystals the
    potential to have a thin film cell on your
    windows,maybe even a spray, is not
    beyond the bounds of possibility. I have
    long wished for the chance of the average
    household being able to afford a carbon
    neutral home. I don’t think the question is
    if it will happen, but when.
    So if electrical power consumption
    reduces with such things as LED lighting and tvs
    what are the implications tor utility companies,
    unemployment figures, the financial system and
    government? A very different world awaits.

    https://www.sciencedaily.com/releases/2016/07/160714100313.htm

    PS let’s hope that new technology will find a way to safely harness
    the energy from current nuclear waste, that energy could be used
    for a few thousand years.

    JRH

    • some of that “waste” is stuffed into probes to Jupiter and Pluto ……..

      perhaps a waste storage plant on the moon , after all

      what could go wrong ?

      Forbin

      • Personally I have addressed some of these issues.
        Obviously there has been”Glorious Inaction” from
        our decision makers in the last decade,
        Even on a cold, still day so long as photons meet
        your retina there is energy to be had. I don’t have
        a beard or wear sandles, I just question why power
        should be under the control of the few!

        • What exactly is a ‘carbon neutral home’? This sort of illogical talking drives me mad. Do you mean carbon dioxide? If so please use the correct terminology. As humans ,we are ‘carbon’, perhaps you are advocating reducing the numbers of carbon-based life-forms, ie some sort of genocide?
          I suggest people who currently advocate independance from an integrated electricity network will be the very first to cry when flicking the switch gets no response in the years to come.

        • In the spirit of Shaun’s wonderful blog
          I won’t respond to your rant.

          Have a nice day

    • Hope they can deliver cost effective power. Cost effective Storage is also needed. Policy that claimed subsidies for inadequate solar panels could make them cost effective by mass production have not worked.

  8. hello Shaun,

    The trouble with Hinckley is just that it too costly , we did have the skills but due to the success of CND and Laboour ( sorry but we should have been building back in 2000 ) being unable to support it we lost it , well retired it really.

    you point on borrowing is well made , isnt this the kind of project to fund future manufacturing ?

    damm I forgot we’re on the road to all being renters , all paying each others rent ….(sighs)

    the cost of the electricity deal kills it , who in their right mind would have done such a deal?

    oh deary me

    if we go the gas rout we need storage – no body i building it . once storage point (rough I believe) is leaking too much and wont be fixed for a while . The Germans have 90 days supply , when have I think 7 ……..

    As for solar and wind , they are fossil fuel extenders

    Fusion should it ever get going , will still produce nuclear waste

    As I said I think we have no choice but nuclear ( and yes re-newables , the Chinese are doing all – so should we ) and if we intend to grow our population to 127 million like the Japanese , then
    well ,we’re stuffed but atleast we’ll have power

    be wary of those who tout smart demand for renewable energy – Pakistan has that now ……
    ( real reason for SMART meters )

    but in the end the cheap money of today could build new industries and profits but why bother ?
    better to have a house ATM , right?

    Forbin

    Ps one more point , nuclear should be built so the default is cold-off ( we used to do this ) but Westinghouse and hickley is default mode is full-on / boom!

    • Hi Forbin

      Let me first reply on the most important issue which is that as a fan of Space 1999 who migrated over from the preceding UFO that if an interceptor pilot is required I am packed and ready to go. This is in spite of the fact that they had a similar life expectancy to security guards on a Star Trek away trip!

      I saw a documentary which covered Thorium a while ago and the physicist Jim Al-Khalili stated that he and his colleagues studied it and then forgot it which he now regrets. My understanding is that such reactors are much cooler and thereby safer.

  9. Rolls Royce and nuclear, interesting thought, and why not. But RR and cars. It seems the MNCs’ are exposed to too many Euro costs in their manufacturing processes and not having enough pound costs. At least that is what I conclude from the recent GM and Ford statements. So an opening for a British car company with pound costs, assuming the pounds stays low, would seem to be there. They should be able to make good engines for small hatchbacks and compete with the Fiesta. The Fiesta seems mostly to have Euro costs so Ford are going to take a hit on it.

  10. The supply of power is too important to be left to politicians, their lack of providing a coherent long term strategy has resulted in them mess we are in at the moment. Votes come before decisions.
    Hinckley Point is a panic decision and a bad solution.
    An independent body, not made up of politician lackies, should review the whole issue and provide a sensible framework for future investment. I suspect the solution will be a mixture of different type of supplies, not dependent on a single source. Some reference to ” climate change” but not dictated by it, can be included – building wind farms everywhere is not a solution, especially when the wind does not blow.
    If nothing else, Britexit, is an opportunity to rewrite the rule book without interference from European bureaucraps!

  11. Hi Shaun,
    It’s not often something as mundane as electricity generation gets so much attention, and is clearly sparking debate between individuals, at government level, and everywhere in between. As someone who works in the energy sector I can only say it is a good thing energy is high on the political agenda for a change, albeit at least a decade too late. As is evident from the comments above, the view on what our energy strategy should be (by the way, we don’t have what would pass as a “strategy” in engineering circles) depends on your view on whether we need to reduce GHGs, and with what urgency. My view is consistent with the UK’s professional scientific and engineering bodies which is that we do, and pretty quickly. The Energy Research Partnership recently undertook some analysis creating an argument for a combination of nuclear/renewables (at approx 20GW new nuclear, 40GW wind), with CCGT and Interconnection sized accordingly (depending on what BREXIT looks like in reality) – and yes this does look at it from a systems perspective, and is as close to what I would call a viable “strategy” as I can find. I hope the Royal Academy of Engineers, who had a role in creating it, stands behind it as a deliverable and robust strategy.

    For proponents of a renewables-heavy approach, large scale storage is just not there yet, although will have a role in ensuring power quality on the grid. It needs some fairly major step changes in technology to enable large-scale renewables to look like “base load”, which I’m not expecting soon. So we’ll need nuclear or CCGT for a long while yet (getting coal off the system is by far the most cost-effective way of reducing GHGs, and cannot be a viable suggestion).

    But despite being a reluctant proponent of new nuclear, Hinkley C looks to me like a project that wouldn’t get anywhere near an investment decision without sizeable political will driving and backstopping it, as the technology has shown itself to be somewhat unsuccessful to date. In fact I worry that it could give new nuclear a very bad name. My understanding is that there are likely to be better technical solutions to the need for new nuclear in the pipeline.
    Danny

    • Leaving GHGs aside.
      How exactly do you load-follow in a system made up entirely of ‘must run’ plant, ie nukes and renewables/wind?
      How do you provide for all the system support requirements , which are not ‘energy’ ie reactive power etc, when all you have is ‘must run’ plant?
      Quite soon every interconnected nation in Europe will have similar generation , ie must run plant. Well before then interconnectors become useless as everyone will want to export at the same time as they over-produce in summer and import when they under-produce in winter. As ‘storage’ in any meaningful way is and remains a pipe dream , I really do wonder at the level of intelligence at the ‘Royal Academy of Engineers’.

      • No one is suggesting you can load-follow in such a system, which is why CCGT is a requirement, an integral part of the system, and likely to be for some time to come. That you think the RAE (which is hugely conservative, and to which I have no formal affiliation) would make such a suggestion is laughable in the extreme. This is stated (not quite as clearly) in my comment above, and in the report I discussed.

        I agree with what I think is your general view, that we need to deliver a rather large amount of CCGT over the next 5-10 years (when you work out what “sized accordingly” means in my comment above, it is a fair amount). This should be easy, but government has failed to do it through poorly designed mechanisms. I suspect there are plenty of projects waiting in the wings.

        Interconnection is not proposed to be solely relied upon to provide system stability, as all the hydro in Scandinavia cannot achieve that. It does, however, provide additional system security, and route to market for cheaper energy at various times: I’m sure you know UK is a net importer at present.

        As I stated, storage is a long, long way off – no one credible suggests using it in the conventional sense. Nukes and CCGT will provide plenty of reactive power and inertia for frequency performance, although storage systems will also provide frequency tracking (enabling higher penetration of interconnection).

        So rather than disparaging my profession, perhaps you should read things more carefully before commenting. I suggest searching for the report I discussed, you may find it interesting. Alternatively, build your own simple model of the UK’s energy electricity generating system (it’s not difficult, all data you need is on the National Grid website), and test the sensitivity to various system assumptions.

        • Ah Dannyboy, I am not trying to disparage your profession, mainly because I don’t know what it is.
          The report you referenced stated a plan for 20GW of nukes and 40 GW of wind; demand right now ( 16.44hrs) is 33.82GW with wind contributing 0.56GW ( 1.66%). Interconnectors are importing as they usually are since their inception, mainly because the French manage their system of nukes by exporting at marginal costs ( especially in summer)
          I wonder where all that energy will go when we have a system of 60GW of ‘must run plant’ with a demand of 38GW? Boil the North Sea?
          Whilst technically the latest generation of nukes can load follow and provide some basic system reinforcement, in reality they don’t and won’t. Mainly that is due to the economics, with such a large LRMC and low SRMC they will always run baseload. But there is also another factor. Large nuclear plant is located well away from major demand areas, it therefore requires system support rather than providing it.
          You are correct that we will require a lot of CCGTs , not just to try to bridge the ‘energy gap’ about to occur over the next few years, but also to provide all the back up energy requirements when the renewables dont/cant operate and all the basic system requirement of an integrated electricity system.
          So rather than having 20GW of nukes plus 40 GW of wind to meet a 38GW requirement, we will also require at least 20GW of CCGTs just to meet the demand on a summer afternoon like right now, a lot more to meet demand on cold windless winter days.
          I think if you add up the cost of this , it will mean increases in the average customer bill of something like 300%.
          Oh yes this is indeed clever.
          Incidentally my profession before retirement was a Director of a UK electricity and gas utility.

        • JW, in my haste I made it look like 40/20 GW was some sort of proposed system, rather than a proposed direction of travel: it is in fact a hypothetical scenario that would get CO2 emissions to a specified level without using CCS. The 2:1 ratio is the important bit in my opinion. So your comments are obviously correct – at present levels of (reducing) demand it would be “expensive” (as well as being unlikely to be delivered for decades!) If I made it seem like a recommendation, it is not, and I should write more slowly. Aiming to be at approximately 20/10 for middle of next decade (along with a pile of new CCGT) would be appropriate, precise system sizing aside. In general I agree with your comments on considerations for system design, although I don’t agree that renewables should only be viewed as ‘must-run’ from a system perspective, as technically they can be curtailed for periods of high resource&low demand, rather than boiling oceans(!). I suspect that even at 20/10 GW ratio this would be necessary for short periods, although nowhere near as 40/20 of course! But this is just a technical view of a potential system and neglects whether the UK market can actually deliver it. Bringing it all back to Hinkley, which was the initial point: even though I agree with this direction, and new nuclear will be needed urgently just to offset planned shut-downs, Hinkley doesn’t look sensible at this time. Finally, I post on energy subjects (and not a lot else) here because believe it or not, I respect your opinions on the matter (although we’re unlikely to agree on climate change issues any time soon).

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