How I learned to continue worrying and love Hinkley Point

OK, I'll admit the headline is wilfully provocative. The allusions to Dr Strangelove-era nuclear armageddon will infuriate pro-nuclear power advocates while the suggestion anyone could love Hinkley Point will anger its many critics. In reality I don't love the project, but 'How I learned to continue worrying and grudgingly tolerate Hinkley Point' doesn't really work as a headline.

However, my reluctance to join the chorus of disapproval aimed at the government over the 'worst decision in UK energy policy history' (trademark: virtually every respected energy analyst and environmental commentator going) is genuine. It is also a little disconcerting given I still agree with so many of the critiques slamming the project and admire so many of the experts doing the slamming. As Michael Liebreich has argued, it is eye wateringly expensive. As Tom Burke has argued, there are better alternatives available. And as Caroline Lucas has argued, there is still no long term solution to nuclear's waste legacy.

I am still hugely concerned the failure of EDF to deliver the EPR reactor on time and on budget through its last two attempts means the chances of further delays and cost overruns in Somerset are far higher than they should be.

And I am also pretty confident the project's many critics will be proved right when they predict Hinkley Point will be judged by history as an absurdly costly white elephant. Just as the most recent wave of large scale renewables projects enabled by the government's FID contracts were left looking like the beneficiaries of overly generous subsidies as the global renewables cost reduction curve continued downwards, by the time Hinkley Point comes online it is highly likely it will have been overtaken by events. As I have argued previously the paradox of Hinkley Point is we are going to build it to deliver clean energy at the same time as striving to prove the alternatives are now so mature we never needed it in the first place.

In an ideal world, Hinkley Point should have been shelved three or four years ago when it became apparent talk of Christmas 2017 launch date and sub £40/MWh strike prices were a pipe dream (although in fairness to Chris Huhne and Ed Davey, at that point the clean energy alternatives were less demonstrably viable at scale than they are now).

In an ideal world the new government would be developing its power decarbonisation strategy with a clean slate and centring that strategy on (in vague order of priority) drastic improvements in energy efficiency; a huge increase in renewables capacity, including onshore wind and solar as well as offshore wind and backed by investment in smart grids, energy storage and demand response; a concerted effort to see if integral fast reactors that run on radioactive waste and small modular reactors are viable; and a revival of carbon capture and storage in the UK focused on gas, industrial sites, and biomass plants.

In a less than ideal, but still better than reality, world the government would drastically trim the cost of Hinkley Point by borrowing at ultralow rates and stumping up a chunk of the capital itself, rather than maintaining the pretence this is a private sector project while getting other governments to deliver the necessary funding.

But if the political ascent of one Donald J. Trump has taught us anything it is that we do not live in an ideal world - far from it.

Consequently, for all its flaws, I can't bring myself to condemn the government's approval for Hinkley Point. In fact, I can't help but think there are reasons for those who care about tackling climate change to give the project a cautious welcome.

After all, this single project is expected to deliver seven per cent of UK baseload power from a low carbon source. Yes, flexible grids will make baseload power less important, but some will always be required. When we are trying to fully decarbonise the power system within 15 years, the ability to deliver a sizeable chunk of the goal in one swoop is not to be dismissed lightly, even if there are legitimate concerns about the cost.

Secondly, and most importantly, approval for Hinkley Point heads off the very real risk that canning the project would have led to increased investment in fossil fuel infrastructure to plug the resulting gap.

Cancelling Hinkley Point would have freed up cash for more renewables and could have helped accelerate the development of a renewables, smart grid, energy storage nexus. But I'd argue that given the nature of the current government, its understandable concerns about energy security, and the political pressure it faces from the right wing of the Conservative Party it is more likely axing Hinkley would have been followed by more funding for new gas plants. Rightly or wrongly ministers are obviously not yet fully convinced renewables can reliably plug the Hinkley gap at lower cost - if they were the project would have been pulled long ago.

Consequently, emissions would have been higher as a result of Hinkley cancellation, while the plan to replace ageing existing nuclear reactors with a new fleet of nuclear projects would have received a major setback. New renewables projects coming online throughout the 2020s would find themselves replacing shuttered nuclear plants, rather than the coal and gas facilities they are meant to force off the grid.

'But what about the Climate Change Act', detractors of Hinkley Point will argue, 'that makes it impossible for the government to replace the EDF white elephant with more fossil fuels'? It is a comforting thought and I wish it were so, but it is not necessarily the case. The Climate Change Act gives governments the freedom to set the course for delivering 80 per cent emission reductions by 2050 and the right to offer an explanation why any single five year carbon budget period is breached.

It is not difficult to imagine a scenario where the axing of Hinkley Point on cost and/or security grounds provides the fig leaf the government needs to defend a slowdown in the pace of decarbonisation. The blame would be laid at the door of Ed Davey, David Cameron, George Osborne, and Nick Clegg; new gas plants would be authorised; and a longer term vision for delivering the Climate Change Act would be proffered based on the eventual deployment of small modular reactors, carbon capture and storage, and some renewables once the costs fell. This is precisely what the climate sceptic wing of the Conservative Party was gunning for and, in the same spirit as the grammar school revival and 'Brexit means Brexit', it would have been easy for Theresa May to give it to them.

Of course, green businesses and NGOs could respond to such a nightmare scenario with judicial reviews which would enjoy a high chance of success. But all the time the clock would be ticking, low carbon investment would be being deferred, and while legal action would be tactically smart it could end up being strategically dumb, given all the indications are that Labour's implosion has cleared the way for a sustained period of Conservative ascendancy.

All of which points to one of the other reasons government approval for Hinkley Point can be seen as encouraging for green businesses: the move provides further evidence Number 10's respect for the letter and the spirit of the Climate Change Act is holding firm.

Given the huge cost, potential alternatives, and full spectrum media opposition, there are only two credible reasons why May ultimately decided to stick with the project. The first is that she did not want to anger the Chinese and was keen to create the impression the UK remains open for business. But while these geopolitical concerns may have come into her thinking it is hard to believe they alone would have saved the project. In fact, given May's electoral strategy appears to centre on an unapologetic appeal to the Conservative and UKIP base the temptation to spin the project's cancellation as 'standing up to China to protect British billpayers' would have held a considerable appeal.

The second reason is that May recognised, quite rightly, that steep emissions reductions are essential, and like her predecessor concluded that Hinkley Point could play a key part in delivering on this goal. You might not agree with the conclusion, but it is important to recognise it was reached thanks to an acceptance that rapid decarbonisation is desirable and necessary. Otherwise, May would have simply axed the project and doubled down on new gas plants.

Under this analysis, approval of Hinkley Point forms a heartening triumvirate of post-referendum developments for the green economy along with the swift rubberstamping of the fifth carbon budget and May's confirmation this week that UK ratification of the Paris Agreement will be completed by the end of the year. These positive steps have to be balanced against the government's continued enthusiasm for fracking, but overall the ground is set pretty fair for a revamped business department staffed with committed 'Green Tories' to come forward with a genuinely ambitious low carbon industrial strategy in the coming months.

It is the imminence of this new strategy that provides the final reason for tempering criticism of Hinkley Point approval. The green light for the EDF project effectively brings to an end the first phase of the UK's power sector decarbonisation strategy. That strategy has delivered record renewable energy deployment to the point where it provides more than a quarter of the UK's power, the foundations for a new wave of cost competitive offshore wind farms, the start of work on the first new nuclear power plant in a generation, and, sadly, the deferral of carbon capture and storage (CCS) plans.

As the Committee on Climate Change argued this week in a characteristically well-reasoned blog post, the government's decision on Hinkley is now the "starting point" for the next phase of power sector decarbonisation - a phase that is about a whole lot more than just the Somerset project.

Without Hinkley Point UK clean energy policy would currently be characterised by an ill-tempered row about energy security that would almost certainly result in increased gas investment and a major blow to any hopes of additional new nuclear capacity coming online this side of 2030. Renewables may benefit as falling costs allow them to plug some of the gap, but it is hard to envisage a scenario where emissions are not higher during the next decade than they would otherwise have been the case.

Instead, now the government can pursue a more measured strategy for meeting its climate goals. It is to be hoped the primary goal of this strategy is to demonstrate conclusively that the renewables-smart grid vision can deliver at scale given the potentially huge cost benefits it offers. It should also incorporate a serious CCS programme, a properly funded energy efficiency drive, and a dispassionate assessment of the prospects for new (waste-fuelled) nuclear technologies that drives a much harder bargain on costs than that which was granted to EDF (retaining good relations with China as it strives to become the first country to deliver new nuclear at scale and low cost could end up being a very savvy move). It should also, as the CCC notes, provide contingency for the not unlikely event of delays to Hinkley Point.

Despite its serious flaws there are good green reasons for welcoming Hinkley Point and the positive role it could yet play in the UK's decarbonisation journey. The project promises to deliver significant emissions reductions and has helped to underscore the new government's commitment to clean technology. It may eat into the budget for renewables, but it is also another major blow to the fossil fuel industry.

Although, all that being said, it is worth remembering much of this upbeat analysis rests on the assumption EDF is telling the truth when it says issues with its EPR technology are a thing of the past and the reactor can be delivered on time and on budget. If the project joins Flamanville and Olkiluoto as a by-word for nuclear industry overpromising and engineering failure, then we might as well have pulled the plug on the whole thing and focused instead on next generation nuclear technology and a massive increase in renewables capacity. There is still a very real chance that everyone will end up worrying and no one will love Hinkley Point.