Opinion: NIA chief executive Tom Greatrex on Hinkley Point C

No single fuel source will guarantee supplies.

Between 2010 and 2030, 65 per cent of the UK’s generating capacity will have retired. The UK has carbon emissions commitments enshrined in law, and was part of agreeing further, stretching international targets in Paris last year. Consumers, domestic and business alike, need reliable, secure supplies for the future.

Our electricity challenge is enormous, its scale and scope is often underestimated, and meeting the challenge will require the use of a range of technologies and innovation. New nuclear power stations, and Hinkley Point C are an important part of the transition to a lower carbon, reliable generation mix.

Many in industry understand the need for a balanced mix between energy sources – there is no ideal single source for all of our power, and nor is there likely to be by the mid-2020s.

Less noticed last week, but also significant, were EDF and Amec Foster Wheeler (two NIA member companies) announcing progress on a wind project on the Hebridean island of Lewis. Weir Group, who have contracts at Hinkley, also provide parts for gas plant. GE, as well as investing in nuclear capability in the UK, will also develop storage capacity.

Some who opine on these issues are far from having the same understanding, with many column inches filled with much (unabated) hot air has been produced in the endless, circular, ultimately pointless technology v technology arguments in recent times. The reality is that it is only through the best calibration of low carbon power sources, demand management, efficiency and the promise of gradually emerging storage techniques that a lower carbon system can be developed.

Baseload power (partly to balance intermittency of renewables) remains a requirement of our electricity system, and on crowded islands there is an obvious advantage in having some concentrated power generation ability alongside much more diverse local generation. There is no contradiction in supporting the development of different low carbon technologies – they will all have a role to play if the transition is to be achieved.

Neither is there a free way of building the infrastructure to generate electricity. All low carbon sources have a significant initial capital cost, and low or no fuel costs thereafter. That is partly why the contract for difference mechanism has been introduced, both here and abroad.

Nobody knows what the cost of fossil fuels and carbon pricing combined will be in ten years’ time. Providing a floor for prices to stimulate investment is as important to the low carbon offshore wind projects at £140 and £150/MWh as it is to Hinkley at £92.50/MWh.

In both cases, costs of future projects will be likely to be lower and all of the responsibility to build the plant is with the developer – it is only when power is produced that the consumer will pay a contribution, depending upon the difference with the wholesale price at the time.

Even with an acknowledged tightening of capacity, the lack of new gas power stations being built shows that there is little commercial value in CCGT unless there is either an advanced incentive (putting the cost up) or if it displaces low carbon capacity (failing to meet our emissions targets). So while an argument for offshore wind and gas as a magical answer to everything might suit those whose company’s economic interest is in both, it is unlikely to be a feasible response in isolation either for affordability or decarbonisation.

The reality today is we need to have a balanced low carbon mix that will provide our electricity needs for the future. Nuclear is a part of that future, just as it has been the underpinning of low carbon power for decades. Getting on and delivering that mix should now be the priority and focus of energy industries, a challenge serious players must now show themselves up to meeting.