Electricity From British Nuclear Power Plants Falls to Lowest Level For Over 40 Years
London, UK - Less and less electricity is being generated from nuclear power plants in the UK. According to Bloomberg, British nuclear power production has fallen to just 37 billion kWh in 2023. This negative trend will continue until the Hinkley Point C nuclear power plant, which is currently under construction, goes into operation.
UK nuclear power production falls to 1980s level
In 2023, electricity generation from British nuclear power plants fell to its lowest level in more than four decades. According to Bloomberg, UK nuclear power generation in 2023 fell to just around 37 billion kWh (2022: 43.6 billion kWh according to EDF), slipping below the 40 billion kWh mark for the first time since the early 1980s.
The reason for this decline is the recent permanent shutdowns of British nuclear power plants, with three nuclear power plant closures alone with a total capacity of just under 2,000 MW or 2 GW (gross) taking place in 2022. In addition to the Hunterston B-2 nuclear power plant (gross: 644 MW), the British nuclear power plants Hinkley Point B-1 with a gross capacity of 655 MW and Hinkley Point B-2 (gross: 655 MW) were also shut down in 2022 for reasons of age.
In addition to the currently planned nuclear power plant shutdowns, the further decline in British nuclear power production also depends on the availability of the old nuclear power plants. Currently, one reactor of the Heysham B2 nuclear power plant with 680 MW is shut down as planned due to a fuel load, but the two nuclear power plants Heysham A1 (625 MW) and B1 (680 MW) have been shut down unscheduled following the failure of a steam valve and are expected to remain off the grid until 24 January 2024. As of today (8 January 2024), the UK is therefore lacking over 1,900 MW of British nuclear power plant capacity in the current cold period, which must be replaced by other back-up power plants.
British replacement nuclear power plant Hinkley Point C behind schedule
The current shutdown plan for nuclear power plants in the UK envisages that eight of the nine nuclear power plant units at four sites with a total gross capacity of 5,284 MW will be taken off the grid by 2028. This means that the nuclear power plant sites at Torness (2 nuclear power plants), Heysham-1 (2), Heysham-2 (2) and Hartlepool (2) will be decommissioned. Only the pressurised water reactor Sizewell B in Suffolk with a gross output of 1,250 MW (1 nuclear reactor with two generators) will remain on the grid until 2035.
The decommissioning of the old British AGR nuclear power plants has been pushed back further and further in the timetable. The main reason for this is likely to be the delays in the construction of the new Hinkley Point C nuclear power plant with a gross output of 3,420 MW. The two nuclear power plant units C1 (gross 1,720 MW) and C2 (gross: 1,720 MW) should actually already be in operation.
The current date for commissioning is now 1 June 2027 for unit C1 and 1 June 2028 for unit C2, but it remains unclear whether EDF will be able to meet these deadlines. A further postponement of the decommissioning of the old AGR nuclear power plants beyond 2028 does not yet seem to be off the table in the event of further construction delays at Hinkley Point C.
Hinkley Point C: Cost overhang and rapidly rising costs for a kilowatt hour of nuclear power
The spiralling costs for the construction of the British nuclear power plant Hinkley Point C continue to escalate. The original construction costs for the nuclear power plant totalled £18 billion (currently approx. 21 billion euros). EDF's Chinese partner, the China General Nuclear Power Group (CGN), has so far paid 33.5 per cent of the originally estimated costs of £18 billion in accordance with the agreement and has transferred the final payment.
The French energy supplier EDF is solely responsible for the remaining cost overrun. As the costs have now exploded to almost £33 billion (approx. 39 billion euros) and there is still no end in sight, the highly indebted French state-owned company EDF must look for new investors or the French state will bear these additional costs.
A high cost increase is also foreseeable for the nuclear power generated when the two nuclear power plant units Hinkley Point C1 and C2 go into operation. This is based on the Contract for Difference (CfD) agreement, under which the French nuclear power company EDF receives a state-guaranteed price for nuclear power from the British, which is linked to the inflation rate and is therefore expected to rise steadily in the future.
According to the British CfD register, the initial strike price is £89.50/MWh, i.e. approx. 10.3 cents/kWh for nuclear power. Due to the price increases in the UK, the state-guaranteed nuclear power remuneration from Hinkley Point C has already reached at least £128.09 /MWh as of 1 September 2023 according to the CfD Register, i.e. around 14.8 cents/kWh guaranteed for EDF for nuclear power from Hinkley Point C.
Even assuming a moderate inflation rate of just 3 per cent until the commissioning of unit 1 of the Hinkltey Point C nuclear power plant in 2027, an IWR calculation shows a guaranteed price for nuclear power of 16.7 cents/kWh. For comparison: electricity prices for future years are already being traded today on the EEX electricity exchange. For example, the annual supply (baseload) on 5 January 2024 for the year 2027 costs 8.5 cents/kWh in Germany. This means that, as things currently stand, nuclear power from Hinkley Point C would be around twice as expensive as the electricity market price in the reference year 2027. The difference between the market price and the guaranteed price for nuclear power in 2027 will be paid by the British electricity customer or the taxpayer.
Source: IWR Online, 10 Jan 2024
