Much discussion centers areound the UK nuclear vs wind electricity cost for construction and operating electricity generation. The UK embarked on a nuclear power plant at Hinkley C in 13 years ago in 2008. The completion date continues to drift out. Wind turbines built by private enterprise also provide electricity to the UK households. As part of zero emissions and renewable energy – how do these projects stack up?
Nuclear – Hinkley C
Opening of the Hinkley Point C project is now 2027 after a series of delays. French energy company EDF (now nationalised by French Govt) is building it, and likely to cost more than its last budget estimate, with inflation pushing costs to almost $40bn (£33bn). More details in Hinckley C post. The stated capital cost is £45.5bn ($59.8bn) at 2016 constant prices including decommissioning.
The price is £92.50/MWh ($USD112.82m) in 2012 prices adjusted by inflation. (£106/MWh in 2021) during the construction period and over the subsequent 35-year tariff period.
The current average wholesale price for electricity is around £47.50 per MWh. Using this as a benchmark, the generator would be effectively subsidized £45 for every MWh of generation. Assuming that this level of subsidy continues over the whole 35 years of the agreement then the total subsidy would be around £19 billion once discounted to 2015 values.
Why Prices Might be Huge Understatement
- The cost of the CfD. The current average wholesale price for electricity is around £47.50 per MWh. Using this as a benchmark, the generator would be effectively subsidized £45 for every MWh of generation. Assuming that this level of subsidy continues over the whole 35 years of the agreement then the total subsidy would be around £19 billion once discounted to 2015 values.
- The Govt has guaranteed 2.5% on £24b so between £8 to £24b in 2015 values
- Insurance is capped at £1.5b covered by the Govt. Fukushima estimated cost is 200b
- Govt is responsible for waste and has capped waste at £5b
- Decommissioning costs. Are the amounts enough?
Hinkley Cost Breakdown
Some (e.g. Joris van Dorp, MSc.) argue that had the UK taken on the risk of financing rather than a Contract for Difference (Cfd) and not paid over 8% interest to France and China, the cost would be much less. They claim that the pension funds who funded it will do ok, which is why the UK continues to pursue nuclear. Some costs are so far in the future they are meaningless – such as decommission. Currenty UK is up for hundreds of billions to clean up early nuclear plants.
UK Nuclear vs Wind Electricity Cost for lWind Farms
Details and projects get revises as they move from concept, to financial close and to construction. The offshore Dogger Bank project initially had 6 farms, then it went to 3 (Sophia + 2 Dogger A&B) but is now 5 different projects (Wikipedia) and could increase to 6. Each is about 1.2GW – or 90 to 100 turbines.
UK Dogger Bank Wind Farms
Dogger Bank A,B, C will provide about 6TWh each or 18TWh
|Sophia||1.4||100||14MW Siemens Gamese||21-24||£41.61/MWh|
|DB A||1.2||95||13MW GE Halide X||23/24||£39.65/MWh (in 2012 prices, indexed)|
|DB B||1.2||95||13MW GE Halide X||25/25||£41.61/MWh|
|DB C||1.2||95||14MW GE Halide X||23/24||CfD £49.47MWh|
|DB Sth West & Sth East||2 x 1.5||In design|
The graphic below provides a quick comparison. The cost of nuclear is 2 times or more with the probability of higher costs.
The data from Rolls Royce is still speculative, as they do not have a prototype yet. More updated information is here. Rolls-Royce announced their Small Modular Reactor (SMR) business in Nov 2022. They already have a £195m cash injection from private firms and a £210m grant from the government.
- Size is 470MW.
- RR claim 95% of the construction is in a factory
- Assembly is on site.
- As such the “SMR” is a small reactor, not an SMR.
Sources of data
- Rolls Royce https://www.bbc.com/news/uk-england-62038190
- Wikipedia Dogger Bank https://en.wikipedia.org/wiki/Dogger_Bank_Wind_Farm
- Power Purchase Agreements signed for Dogger Bank C (Press Release)
- S&P article
- PPA price https://doggerbank.com/press-releases/dogger-bank-wind-farm-a-and-b-reaches-financial-close/
- Rolls Royce SMR https://www.rolls-royce.com/innovation/small-modular-reactors.aspx#/
- Costs of Hinkley https://www.iisd.org/story/the-united-kingdom-is-to-subsidize-nuclear-power-but-at-what-cost/