EdF’s travails over Hinkley persist. The FT reported this week that engineers within the company have written a memo asking management to wait to proceed with construction until the other EPRs in Finland and Normandy have been successfully completed. A director has said he will vote against the UK nuclear project. The £18bn project is stalled until internal debates within EdF are resolved.
Within the same company, they do things very differently on the other side of the Atlantic; there EDF focuses wholeheartedly on wind and has no nuclear under development. It has just proudly announced that it has become the largest developer in North America with a portfolio in 2015 of over 1 gigawatt of newly constructed wind farms.
If it continues at the current rate, it will be generating more electricity from wind by 2025 than would be provided by Hinkley Point C. The numbers are as follows. Hinkley will generate about 25 terawatt hours a year. EdF’s 2015 annual portfolio of new wind projects will provide about 3 terawatt hours a year at average US utilisation factors. If it continues to develop new wind projects at the rate of 1 gigawatt a year, it will be generating well over 30 terawatt hours a year from wind by the end of 2025. 2025 is when EdF says Hinkley will be finished.
What about the capital cost of wind versus nuclear? The latest US estimates suggest a figure of about $1,700 per kilowatt of capacity. That means EdF’s projects completed in 2015 cost about $1.8bn. Over ten years, that rate of installation will mean a total cost of around $18bn or about £13bn. Wind is therefore at least 30% cheaper to construct.
And it is much cheaper to operate. The most important project it completed in 2015, the 250 MW farm at Roosevelt in New Mexico, has sold its electricity for the next 20 years to a utility for $23.39 a megawatt hour, less than 20% of the price agreed for Hinkley of £92.50/MWh. (The Roosevelt price is somewhat subsidised by Federal tax credits but even without this benefit the cost of wind would be less than 40% of the price of UK nuclear). Wind saves consumers money when compared to the nuclear alternative.
EdF finances many of its US wind projects on the back of power purchase agreements with major companies such as Microsoft, Procter and Gamble and Google. They commit to buy the electricity produced at a fixed price, not the inflation adjusted figure that the UK will pay for Hinkley. The EdF press release said ‘Corporate America is increasingly turning to renewable energy to power its business operations, based both on consumer preferences and because renewable energy simply makes economic sense’. (My italics).
We never hear this line from EdF in the UK.
EdF cannot guarantee the wind will blow or the sun shine. Unlike in Britain, its US business is also investing heavily in energy storage. The US company has announced 100 MW of battery systems in the US saying ‘Energy storage is an attractive, cost-effective addition to intermittent energy generation projects’. However there’s no mention of batteries on EdF’s UK web site.
For sensible reasons large international companies often pursue varied market strategies in different countries. EdF in the US has decided to back wind while the UK has gone for nuclear. But even a quick look shows that the energy and financial returns to the US strategy seem far clearer and better for the company, and its customers, than the tactics of the UK business.