WE NEED TO MOVE FAST SO LIGHTS DON’T GO OUT
WHO will keep the lights burning in Britain? That’s the question we must all ask after Hitachi withdrew from the UK’s plans to replace our ageing nuclear power stations with state-ofthe-art reactors.
Be under no illusions – this is a disastrous setback to our nation’s energy future.
In a few short months, two Japanese firms, Toshiba in Cumbria and now Hitachi at Wylfa on Anglesey, have fallen by the wayside because of escalating costs. This leaves the £20billion Chinese-financed Hinkley Point in Somerset as the only potential new nuclear reactor on course to be built.
Britain relies on its nuclear plants to provide electricity for factories, homes and businesses. Remember, when the wind doesn’t blow to keep turbines turning, or the natural gas supplies from abroad are interrupted, we are dangerously exposed. At present, nuclear is providing 21pc of the UK’s power supplies.
Now the Government must make hard choices – and fast – to guarantee the nation’s energy security.
It could persist with large new nuclear facilities by finding creative ways of making investment more attractive. It might, for example, pay dividends to investors before the project is completed. That’s how the Thames Tideway, or supersewer, in London is being built. Or it could take up a Rolls-Royce initiative to build a series of small ‘modular’ nuclear reactors.
ALTERNATIVELY,
the Government could decide nuclear is simply too expensive and complicated, and that cleaner natural gas is the way forward. That would require it to renew investment in gas storage and/or find some way of speeding up fracking activity, which promises to produce relatively cheap gas.
The simplest way forward may be to encourage Chinese investors, already financing the new EDF plant at Hinkley, to fill the gap left by Japan’s nuclear investors (who got involved only when two German energy giants withdrew).
Dragging in the Chinese might require a promise to pay them a higher price once the electricity comes on stream – and that would be highly controversial. Already the ‘strike price’ agreed for power generated at Hinkley is far above the usual wholesale price.
It would also raise the same delicate national security questions the Government faced from GCHQ when the then chancellor George Osborne embraced Beijing.
Despite this new setback, I have no doubt we should persevere with the construction of nuclear power stations. They will provide a reliable source of energy that is not at the whim of the weather or international strife.
Natural gas is still the cheapest source of energy generation. But most of Britain’s gas currently comes from Qatar in the Middle East, or through North Sea pipelines from Norway and Russia.
Supplies from Russia have in the past been interrupted by crises in Ukraine and Georgia, while the Middle East remains a tinder box.
A key way of overcoming these obstacles would be to step up natural gas production in the UK. This is already happening in the North Sea where extraction is getting cheaper. But the real bonanza would come if large-scale fracking could take place here – as it has in the US, where it has slashed reliance on foreign energy.
The biggest problem has been the Government’s refusal to tackle the danger of a looming energy crisis.
The Brexit paralysis means that preoccupied ministers have spent far too little time making sure we have sufficient energy to keep our factories working, and making sure citizens can turn on their lights and not freeze in their beds.