UK Energy Rethink: Theresa May’s China Calculus

Oh, the embarrassment. Last Friday there was to have been a grand lunch for 150 in a marquee set up on the Somerset coast, the site of the planned Hinkley C nuclear power station: this was to celebrate the long-awaited go-ahead for a vast project managed by the French state-backed company EDF with funding from the China General Nuclear Power Corporation (CGNC). But with senior employees of the CGNC and EDF already en route to Somerset, salivating at the prospect of their Chinese-West Country fusion banquet — with such pre-announced dishes as ‘Cantonese-style pork crackling’ and ‘Hoi sin local lamb skewers’ — Prime Minister Theresa May called the whole thing off. –Dominic Lawson, Daily Mail, 1 August 2016

No one wants Hinkley C power station, not because nuclear is in itself a flawed technology, but because the electricity market is so distorted by climate policy that it is dangerous for an investor unless offered subsidies that are wildly expensive for the consumer. Discussion should now shift from the folly of this particular deal to the underlying problems that are making it all but impossible for any despatchable, conventional power station to be built in the UK. –John Constable, Global Warming Policy Forum, 29 July 2016

In explaining its shock decision to delay the deal on Hinkley Point, the government said it needed time to consider all components of the deal, but speculation is growing that China questions may be at the heart of the reassessment. —Carrie Gracie, BBC News, 31 July 2016

If Hinkley Point C nuclear power station goes ahead, the cost for consumers of subsidising it could be £30 billion, according to the National Audit Office — five times what was originally estimated. The increase comes largely from the fact that fossil fuels are cheaper than even the lowest possibility envisaged by the late and unlamented Department of Energy and Climate Change. The purpose of this subsidy is to ensure that we have very-low-carbon electricity to replace ageing coal and nuclear plants, the better to mitigate global warming. Since Hinkley would emit half a billion fewer tonnes of CO2 during its 35-year life than comparable gas-fired projects, that implies a cost per tonne of carbon dioxide avoided of £60.

How does this compare with the cost of the damage that global warming will do in the entire future, per tonne of CO2, a number known as the “social cost of carbon”? The US government uses a figure of $37 per tonne (£28), so we are being asked to pay more than twice as much. –Matt Ridley, The Times, 1 August 2016

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