Monday, September 21, 2015

Hinkley Point and the Chinese

Accepted invite to appear on World at One today to discuss Gov't announcement that a £2billion loan guarantee has been promised to two Chinese investment corporations to help facilitate a new £24billion investment by French company, EDF to build a new nuclear power station at Hinkley Point. Not an expert, but perhaps only Conservative member of Energy and Climate Change Committee able to appear. Thought a chat with Martha Kearney about this would help clarify a complex issue. Bit disappointed that it became one of those 'knockabout' sessions, with two opposing views, which are designed to create more heat than light - which it probably did!
Two issues attracting attention - whether we should be contemplating new nuclear generation at all. And secondly whether we should be allowing the Chinese to be involved in financing the deal
The Gov't's responsibility is to ensure a secure energy supply, while meeting our decarbonisation ambitions. While a secure supply is not cheap, it's probably a lot cheaper than a supply breakdown. The cheapest way to guarantee a secure supply would be by using coal and gas. But our decarbonisation targets mean closing coal fired power stations sometime in the 2020s. Not sure I'd want to see us too dependent on gas either, unless UK produced shale proves viable. This makes nuclear an obvious option. Renewables are supplying an increasing amount, and in time, the development of effective power storage will enable consideration of renewables as 'base load'. This would transform the position. Anyway, At present, I cannot see how we can not go forward with a new nuclear generation programme.
Personally, I have nothing against the French or the Chinese as our investment partners. It would be so much better if we had the capacity to build a nuclear power station within the UK. But we scrapped our nuclear development ambitions over 20 years ago. The idea that we object to Chinese involvement does seem 'parochial'. The UK is a trading nation. Inward investment is key to our success over many decades. Don't really understand antipathy to the Chinese. All in all, today's announcement provides confidence and reassurance to our potential French and Chinese partners that the UK is fully committed to the Hinkley Point project. Today's was rather a positive announcement.

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