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U.K. Prime Minister Theresa May recently gave the green light to Hinkley Point C, a long-debated nuclear power project backed by French and Chinese capital. Many skeptics believe it is a financial boondoggle in the making.
Commenting on this, Mark Fitch said: “Depending on the degree of renewables deployed, you’ll be adding a level of peaking plants, and alongside that we’re also going to be renewing 20 to 30 gigawatts of gas plants.”
Further, Fitch added: “In the U.K., you have to take into account the degree of landmass that’s needed to site renewables. You need to give up space, and that space is at a premium. If you look at the long-term requirements the government has put itself under, then nuclear is the only large-scale, scalable source that can take chunks out of emissions without using significant landmass or biomass that raise sustainability questions. The government needs to keep its options open.”
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Commenting on the government’s guarantee to EDF of £92.5 per megawatt-hour over 35 years is generous, Fitch said: “The strike price of offshore is higher, and biomass conversion is similar.”
Fitch added: “Fitch’s view is that it’ll take the emergence of a viable storage model to make the grid flexible enough so that renewables can underpin the electric system. His bet is that electric vehicles will be the key source of that future storage.”
Further, Fitch said: “EV’s cut the peak, since you’d use the car’s charge to power your lighting in the evening. You’d have roughly the same demand peak that you have today, but energy consumption would look massively different.”
Fitch concluded: “Effectively, if you’re going to turn all your coal plants off and use natural gas, you have to consider where that gas comes from. Geopolitical considerations mean that relying on a single primary energy source would be risky. From a British perspective, this is quite good news for industry. A whole supply chain will grow up here, and we could find ourselves with a good base of experience and knowledge. There aren’t many fresh-faced nuclear engineers knocking about.”