Hinkley delay could benefit Drax

The latest delay to Hinkley Point C reinforces the case for a bridging mechanism to support large-scale biomass generators such as Drax once their current subsidies end in 2027, an industry analyst has argued.

Martin Young, senior analyst at Investec, told Utility Week that the hold-up announced earlier this week could leave the UK with just one operational nuclear power station during the final years of the current decade.

Drax was recently granted a Development Consent Order for its plans to equip two of the four biomass units at the plant with carbon capture and storage (CCS).

The government intends to introduce a new two-part Contracts for Difference-style mechanism to support bioenergy with CCS (BECCS) – one for electricity generation and one for ‘negative emissions’.

However, its current support for large-scale unabated biomass generation through the Contracts for Difference and Renewables Obligation schemes is scheduled to end in 2027 – three years earlier than Drax’s 2030 target date to get its two BECCS units running.

The Department for Energy Security and Net Zero therefore recently proposed to establish a “bridging mechanism” to maintain support for biomass generators between the end of the current subsidies and the introduction of an enduring support mechanism for BECCS.

Young said the latest delay to Hinkley Point C “now puts pressure on that consultation to come out with a solution that is workable for all parties”.

He continued: “That bridging mechanism is a bridge to BECCS, but I would say in light of this announcement, you just can’t countenance the idea of a power station of the size of Drax – a power station that is dispatchable – not being there on 1 April 2027.”

EDF revealed on Tuesday (23 January) that Hinkley Point C, currently under construction in Somerset, will not begin generating power until 2029 at the earliest. It said the first of its two 1.6GW reactors is most likely to begin generating electricity in 2030 although the start date could still be postponed to 2031.

The company’s previously stated aim was to commence generation in 2027, although it had warned of the potential for a 15-month delay.

Earlier in January, EDF announced plans to invest £1.3 billion to maintain its nuclear output at current levels until 2026. According to the Electricity System Operator, Britain’s existing nuclear fleet accounted for 14.2% of the electricity generation mix in 2023.

EDF said it would also review the lifetimes of its four advanced gas-cooled reactor (AGR) power stations, each of which has a generation capacity of around 1.2GW, by the end of this year. The Hartlepool and Heysham 1 plants are currently scheduled to close in March 2026, whilst the Heysham 2 and Torness plants are due to stop generating in March 2028.

“If they are not extended, given that EDF has said the base case is Hinkley Point C is not coming until 2030, you potentially now have a period of time where you’ve lost a chunk of the existing nuclear fleet and the replacement isn’t ready,” said Young.

He said the closure of the AGR plants before Hinkley Point C comes online would leave the UK with just one operational nuclear plant – EDF’s 1.2GW Sizewell B pressurised water reactor power station in Suffolk – adding: “I don’t know with Sizewell B what the refuelling schedule would look like as well, but over a three-year period of time there’s probably a fair chance that you’ve got to have that out for a while for refuelling.”

As well as biomass, Young said the delay will increase the needs for other forms of capacity to remain or come online, including gas generation, battery storage and demand-side response.

He said the measures taken over recent winters, such as the introduction of the contingency coal reserve and the Demand Flexibility Service, do provide reassurance that the gap can be filled: “Ways have been found to maintain the security of supplies that we need and things like demand flexibility are part of that. Demand flexibility was deemed to be very successful and it’s running again this winter.

“There are those tools in the tool box. There is the stuff that has been brought forward under the Capacity Market that’s already in place. We have seen more storage being built.

“There are things that are coming and there is evidence that we have managed to get through it before.”

Earlier this week, the National Audit Office warned that the government cannot be confident that biomass plants such as Drax are meeting sustainability standards.