Hinkley Point C Nuclear Power Station will save £40 billion in climate damages

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Hinkley Point C Nuclear Power Station – Enhanced Carbon Audit LCA Case Study

This report published by PAL focuses on the proposed 3.2 GW Hinkley Point C nuclear power station. Its aim is to track direct and indirect carbon emissions over the total lifetime of the plant – cradle to grave – and to determine a more representative monetary impact  in terms of the loss and damage caused by manmade climate change.  The main findings are outlined below.


1. Hinkley C will save £40 billion in climate damages

As illustrated in Fig. 1, compared to a series of gas fired power plants with equivalent energy output and 60-year lifetime, gas at £62 billion exceeds Hinkley C at £37 billion, by 40%. For the gas equivalent, the cost of carbon alone approximates to the entire lifetime costs of Hinkley C. In other words Hinkley Point C Nuclear Power Station will save £40 billion ($59 billion) in climate damages. 

Figure 1 – Comparison of lifetime costs of Hinkley C to Gas and Offshore Wind alternatives (using PAL Carbon 1 year ND index).

Offshore wind, without gas backup, for comparison is similar to the Hinkley C lifetime cost.


2. £38 billion spent on 3.2GW of gas & wind buys just 12% gas guaranteed supply

As illustrated in Fig. 2, we also compare the costs of the nuclear option with the costs of various mixes of offshore wind with gas backup. Our findings are that the maximum gas to wind percentage for cost parity with Hinkley is 12%. There can be no more than 12% gas to offshore wind without the Hinkley C lifetime costs being exceeded.

Figure 2 – Comparison of lifetime costs of various Offshore Wind and Gas alternatives with equivalent output to Hinkley C.
Figure 2 – Comparison of lifetime costs of various Offshore Wind and Gas alternatives with equivalent output to Hinkley C (using PAL Carbon 1 year ND index).

It would be for the UK National Grid to decide if 12% of gas back-up covers the risk of the wind not blowing in sufficient amounts in wind farm areas. Given access to further and better particulars, say from EDF and the Offshore Wind Industry, we believe we can fine-tune this figure considerably.


Key Assumptions

The key assumptions for the report are

  1. total budgeted whole-life costs for Hinkley Point C are £37 billion[1] ($54 billion).
  2. capital costs for Hinkley Point C are £18 billion ($27 billion), and for equivalent gas and offshore wind alternatives generating 25 terawatt hours a year would be £2.5 billion ($3.7 billion), and £18 billion ($27 billion), respectively[2].
  3. operational costs and fuel costs are weighted pro-rata using published levelised costs of electricity for generating plants in the UK[3] [4].
  4. emitted carbon costs are provided on a consistent 60 year basis for all three alternatives using projected emissions[1] and the PAL Carbon 1 Year ND Index carbon price.
  5. embedded carbon costs are provided on a consistent basis for all emissions associated with the manufacture of construction materials (steel, cement).
  6. the carbon price changes over time as rates of global carbon emissions change.

This report compares like with like and does not speculate about developing technologies. This report does factor in the UK’s international obligation to account for carbon costs. Simply stated: the global, long-term damage done by a tonne of carbon emitted in the UK is and remains the UK’s responsibility.


Get the full report

PAL has pioneered, developed and specialises in this new ‘Enhanced Carbon Auditing’ (ECA). If you would like a complementary copy of the new report, Hinkley Point C Nuclear Power Station Enhanced Carbon Audit LCA Case Study, Supplement 1 to the new book Predicting the Price of Carbon, please tap the button below.

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[1] Comparison of Lifecycle Emissions, NEI http://www.nei.org/Issues-Policy/Protecting-the-Environment/Life-Cycle-Emissions-Analyses/Comparison-of-Lifecycle-Emissions-of-Selected-Ener

[1] DECC Government Major Projects Portfolio data 2016 http://www.gov.uk/government/publications/decc-government-major-projects-portfolio-data-2016

[2] Bloomberg New Energy Finance http://www.bloomberg.com/news/articles/2016-08-16/offshore-wind-could-replace-hinkley-nuclear-in-u-k-at-same-cost

[3] Projected Costs of Generating Electricity 2015 Edition, International Energy Agency, Table 4.18 http://www.iea.org/Textbase/npsum/ElecCost2015SUM.pdf

[4] Electricity Generation Costs 2013, DECC, Table 2 http://www.gov.uk/government/uploads/system/uploads/attachment_data/file/223940/DECC_Electricity_Generation_Costs_for_publication_-_24_07_13.pdf

Edward Coe

Author: Edward Coe

Edward Coe is Managing Director and co-founder of PAL. He has extensive experience of systems development and implementation for advanced derivative trading systems utilising a broad range of technologies supporting in house, bespoke and third party software. Edward developed the software behind PAL Carbon.

Hinkley Point C Nuclear Power Station will save £40 billion in climate damages was last modified: April 25th, 2017 by Edward Coe