‘Almost inevitable’ UK will burn more gas and import more energy after Hinkley nuclear plant delayed, experts warn
The fresh delays to Hinkley Point C nuclear power station will “very likely” force the UK to burn more gas and import more energy than expected, analysts have told Sky News.
The already delayed project had been due to provide 7% of the UK’s electricity from 2027, until it was pushed back again last week by another 2-4 years.
The likely uptick in dirtier gas power would also add more greenhouse gases just as the UK is trying to slash them by 2030, the industry voices warned.
The UK government did not deny that gas and energy imports will likely increase, but insisted climate targets would not suffer as a result.
An energy department spokesperson said: “Hinkley Point C will serve Britain until well into the next century, making an important contribution to the UK’s net zero commitments.”
Professor Rob Gross, director of UK Energy Research Centre (UKERC), said the delays to Hinkley made increasing gas burn in the meantime “almost inevitable”.
Wind or solar are unlikely to plug the gap because the UK is already “struggling to connect all the renewables schemes already in the pipeline for 2027/28″, he said.
Glenn Rickson, who analyses the UK power sector for S&P Global Commodity Insights, also said it is “almost inevitable” that UK gas generation “will be higher” than if Hinkley had fired up in 2027.
He added: “Albeit well below current levels, mostly due to increased wind generation in the meantime.”
Please use Chrome browser for a more accessible video player
UK’s electricity grid problem
Increased energy imports and emissions likely in short term
But the “the single biggest change may be an increased pull on power imports from the UK’s neighbours”, said Mr Rickson.
Prof Gross also said the UK “might import more power” by increasing the use of undersea electricity cables known as interconnectors.
The extra electricity imports might come from nuclear in France, wind in Denmark or hydro in Norway, but it could also mean more from gas generation too.
“Certainly the net impacts will be to lift overall fossil fuel generation, whether that’s in the UK or elsewhere in Europe,” said Mr Rickson.
With more fossil fuel generation comes more emissions of greenhouse gases, which governments are trying to cut in order to reign in climate change.
The prime minister Rishi Sunak in September watered down some climate measures on the basis the UK was on track to meet its target to cut emissions by 68% by 2030.
But the country is now missing an important part of that plan – Hinkley was due to provide 3.2GW of clean power from 2027.
That’s about 7% of the UK’s electricity, and enough to power six million homes.
“The most significant impact from a UK perspective will be higher greenhouse emissions,” said Robert Sansom, energy consultant for the Institution of Engineering and Technology.
Tom Greatrex, chief executive of business group the Nuclear industry Association, said: “Without more nuclear and renewables, it’s inevitable that we’ll burn more gas.”
“Hinkley will produce clean, reliable power for around 80 years, stretching into the next century, and alongside other stations it will complement wind and solar with a baseload of power available whatever the weather.”
UK plans to ‘revive’ nuclear power
Once upon a time Hinkley was slated to produce power from 2017, but it has been plagued by setbacks and delays, as have two similar plants in Finland and France.
Operator EDF blames Hinkley’s woes on inflation, the COVID-19 pandemic, Brexit and reportedly thousands of extra additional design changes required by the UK regulator.
The government last month set out plans to radically increase the UK’s nuclear capacity and simplify and accelerate the process.
Industry says future projects can be built faster and cheaper if projects are less spread out in time, and thanks to what is learned from building Hinkley.
The UK hasn’t built any new nuclear projects since Sizewell B was finished in 1995.
Eight of its 9 reactors are due to retire by 2028, and have already had their lives extended, meaning they are unlikely to plug the gap left by Hinkley either.
A spokesperson for the energy security and net zero department said: “We have the right energy mix to meet our net zero targets – investing in renewables, building the five largest operational offshore wind farms in the world, and supporting the revival of nuclear power.”
One of Britain’s biggest housebuilders is exploring a £1bn takeover bid for Cala Group, a rival player in the sector which has been put up for sale.
Sky News has learned that Persimmon, which has a market value of £4.74bn, is leaning towards submitting an offer for Cala ahead of a bid deadline next week.
City sources said it would be a strong contender to buy Cala, whose homes have a significantly higher average sale price than those of Persimmon.
Insiders expect Cala, which is being auctioned by Legal & General (L&G), to command a price tag of about £1bn.
If Persimmon is successful in the auction, it would mark the York-based company’s biggest acquisition for years.
Under Roger Devlin, its chairman, and chief executive Dean Finch, the company’s share price has rallied by over 20% in the last year.
In a trading update last month, Persimmon said it was on track to deliver growth in new home completions this year to up to 10,500.
The Cala auction comes amid a general election campaign in which new home provision is expected to figure prominently.
Both main parties are likely to set out new policies to stimulate housebuilding growth, according to sources.
Analysts said this weekend that other housebuilders were also expected to consider bids for the L&G-owned company.
Keep up with all the latest news from the UK and around the world by following Sky News
These could include, they said, Persimmon’s larger rival, Taylor Wimpey, and Avant Homes, which is owned by Elliott Advisors and Berkeley DeVeer.
Persimmon is the UK’s third-largest housebuilder by market capitalisation, behind Taylor Wimpey and Barratt Developments.
Both Persimmon and Taylor Wimpey were among eight housebuilders named by the Competition and Markets Authority in February over suspicions they had exchanged commercially sensitive information.
A takeover of Cala by another major housebuilder would underline fresh momentum in the industry’s consolidation, after Barratt Developments unveiled a £2.5bn deal to acquire rival Redrow.
The prospective sale of Cala represents the first significant strategic move by its new chief executive, Antonio Simoes.
Bankers at Rothschild are overseeing the auction.
Mr Simoes described Cala as “a very strong business” during an earnings call earlier this year on which he was quizzed about the housebuilder’s future ownership.
L&G took full control of the business in 2018.
Cala reported a slide in half-year profits last autumn, citing a “challenging market”.
The company has a long-term goal to build 3,000 homes annually.
Persimmon and L&G declined to comment on Saturday.
Business
Ex-Post Office boss Paula Vennells admits removing reference to Horizon IT system from Royal Mail prospectus
Former Post Office boss Paula Vennells has admitted to amending the legal document Royal Mail issued to would-be investors before it became publicly owned to remove mention of the flawed Horizon IT system.
Data from the accounting software created by Fujitsu was used to prosecute more than 700 sub-postmasters for theft and false accounting.
Many more victims lost their homes, livelihoods and good reputation to repay non-existent shortfalls.
Now the inquiry set up to establish a clear account of the introduction and failure of Horizon has heard during Ms Vennells’s third and final day of questioning that she removed “at the very last minute” reference to Horizon from the prospectus Royal Mail issued before it was listed on the London Stock Exchange.
A prospectus is a legal and financial document detailing key information for potential company investors.
It was the first time the issue was raised with Ms Vennells.
Please use Chrome browser for a more accessible video player
Paula Vennells breaks down in tears again
She said: “It was flagged to me that in the IT section of the Royal Mail prospectus, there was reference to – I can’t remember the words now – but risks related to the Horizon IT system… the line that was put in said that no systemic issues had been found with the Horizon system.”
Ms Vennells wanted the reference removed as, “the Horizon system was no longer anything to do with the Royal Mail group” she said, and contacted the company secretary to have the reference removed.
Based on this action Ms Vennells wrote to a colleague “I have earned my keep on this”.
Keep up with all the latest news from the UK and around the world by following Sky News
She was at the top of Post Office for 12 years and served as its chief executive for seven of those, from 2012 to 2019.
In at times emotional testimony, Ms Vennells said she “loved the Post Office” and worked “as hard as I possibly could to deliver the best Post Office for the UK”.
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports2 months agoStory injured on diving stop, exits Red Sox game
-
Environment1 year agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Sports7 months agoGame 1 of WS least-watched in recorded history
-
Sports3 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment1 year agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Environment1 year agoTesla advances Powerwall pilot project with German electric company