UK Gas Plays Second Fiddle to New Nuclear

摘要

To a barrage of criticism, the UK government last week approved the country's first new nuclear plant in two decades. The ￡18 billion ($24 billion) Hinkley Point C project in southwest England will be built by a French-Chinese consortium, and much of the criticism focuses on the guaranteed payment of ￡92.50 ($124) per megawatt hour they will receive for electricity generated for 35 years. This is already more man double current UK wholesale prices, which are forecast to drop further. The Conservative government of new Prime Minister Theresa May gave the go-ahead just seven weeks after launching a review of the terms, which were agreed by the previous administration (WGI Aug.3' 16). Many had expected some changes — and her decision to keep things as they were can perhaps be explained by the UK's shrinking spare generation capacity. Power systems need a certain amount of spare, non-intermittent capacity to meet demand spikes and offset planned or unforeseen outages. Electricity grids are being upgraded to accommodate more intermittent renewables, and there have been advances in battery storage and demand-side response measures, where consumers are paid not to use electricity. But the bedrock of most advanced power networks remains non-intermittent, centralized plants run on fossil fuels or nuclear. In the UK, a sizable chunk of this baseload capacity is slated for retirement or enforced closure on environmental grounds over the next decade.