Stop the dithering on UK energy projects

The UK’s national identity, not just energy security, hangs in the balance while decisions over Hinkley Point C and Swansea Tidal Lagoon are delayed, argues Association for Consultancy and Engineering chief executive NELSON OGUNSHAKIN.

Hinkley Point C - still no decision made on whether to go ahead.

The professional consultancy and engineering sector, which is at the forefront of capital project development, is going from strength to strength at the moment. The government has taken impressively clear action to improve British critical infrastructure as HS2, the Crossrail projects, Tideway tunnel and the Northern Powerhouse agenda is also surging ahead. However, indications that decisions pertaining to the energy sector are faltering may relegate what could be an infrastructure boom to a flash in the pan.

Two longstanding UK energy generation projects have recently looked increasingly beleaguered, a show of form that must be reversed if the UK is to remain energy secure in terms of baseload capacity. Both Swansea Bay Tidal Lagoon and Hinkley Point C are facing delays in decisions to fund the projects amid fears that they will be too costly to justify expenditure. I would argue, however, that these projects will not only contribute to the invaluable instrumental goal of energy security, but also have a symbolic value that is just as important to UKPLC.

Swansea Bay Tidal Lagoon is a genuinely ground-breaking project that is going unduly cold at the moment. Once heralded as a key point in the energy plan laid out in the Conservative’s 2015 manifesto, prime minister David Cameron’s enthusiasm for the project is now said to be ‘reducing’. Indeed, just last week, it was announced that an independent review would be launched into the feasibility and practicality of tidal lagoon energy in the UK – perhaps an existential threat to the project.

In spite of these challenges, I remain hopeful for the prospects of the project. The scheme already has planning permission, an intelligently laid out supply chain and £200m from equity sponsors, not to mention huge local, national and international support. Indeed, the project has recently agreed to a strike price that rivals new nuclear plants, proving its competitiveness.

Importantly, what is at stake here is not simply the one billion pound facility, but the entire legacy of the UK’s tidal energy generation. If tidal energy in the UK was a housing development, Swansea is but a marketing suite; it is designed to prove the efficacy of this kind of project so that larger projects (benefitting from economies of scale) can be rolled out along the West coast, providing clean energy for millions. Swansea Bay Tidal Lagoon represents a modern Britain – green, decentralised and enterprising – and I would encourage the government to push past the current sticking points so that construction can begin. It is the thin end of a green energy generating wedge that we must support to secure Britain’s energy and make a statement about the country we can become.

The decision to begin work on Hinkley Point C is the second deliberation to dither. Indeed, dithering has characterised this process for some time. Back in 2007, Vincent de Rivaz, EDF’s boss in the UK, said that the British would be cooking turkeys using Hickley power by Christmas 2017, for example. Indeed, the largely state-owned French energy giant is under financial pressure and is struggling to finance the £18bn project, even with China’s state nuclear firm CGN picking up the slack and taking on a third of the costs.

Despite all this, Hinkley Point C represents a good opportunity for the UK to meet its energy needs. In 2013 the site received planning permission and a strike price was agreed, which would make it competitive with other low carbon generation methods. Over the 60 years the plant would operate, it would save the UK 600 million tonnes of CO2 all the while producing 7% of the UK’s generation needs. Even before the facility formally begins producing electricity, the construction process will create 25,000 new jobs.

Beyond the stats, Hinkley Point C symbolises an opportunity to embrace our stated values of openness and internationalism with expertise and capital from around the world coalescing in the UK to produce something that would make a real impact. Hinkley Point C gives the UK the chance to reframe nuclear energy post-Fukushima as not only safe but an essential ingredient to a healthy mix of energy generation in the UK. Here the UK can boldly push ahead with nuclear power – proving it is open to businesses and world leading, even in the event of a crisis. What is clear is that these projects, although they have measurable outputs, creating jobs, promoting investment and providing electricity, also have important softer impacts that change the way others think of us and, perhaps most importantly, how we think about ourselves.

All good professional engineers and consultants understand that the results of their work mean more than just projects’ instrumental outputs. How we solve the critical problem of energy security is more than just about avoiding blackouts. Rather, going ahead with these projects would contribute to indicating that the UK is a progressive, green and outward looking nation, the country we always aspire to be. If we embrace innovation and enterprise in this instance it enables us to retain the fantastic position we are currently in – any decisions to the contrary might mean we lose our spark.

If you would like to contact Andy Walker about this, or any other story, please email awalker@infrastructure-intelligence.com.