The boss of manufacturers Ineos – one of the UK’s biggest energy consumers – has warned that energy produced from the planned Hinkley Point C power station will be too expensive for business. We answer five questions on Ineos’s boss’s comments.
What exactly has Ineos boss Jim Ratcliffe said?
Speaking to the BBC Ratcliffe said UK manufacturers would not find the price of energy from Hinkley affordable.
Mr Ratcliffe said: “The UK probably has the most expensive energy in the world.”
“It is more expensive than Germany, it is more expensive than France, it is much, much, more expensive than America. It is not competitive at all, on the energy front, I am afraid.”
How much will energy from Hinkley cost?
The government has signed a deal with France-based EdF to pay a guaranteed price of £92.50 per megawatt hour (Mwh) for 35 years. EdF is developing the station with the backing of Chinese investors.
Ineos owns the Grangemouth power plant in Scotland and has recently agreed a deal for nuclear power in France at 45 euros (£37.94) per Mwh. However, the world nuclear association pointed out this deal was for an unknown duration whereas the government’s deal with EdF is for 35 years.
What have other experts said?
The World Nuclear Association told the BBC: “It should be pointed out that France has the highest proportion of nuclear in its generation mix and lower than average EU power prices, so there is nothing automatically expensive about nuclear power.”
In October John Cridland, director-general of business lobby group the CBI, speaking to the BBC said:
“It’s important to remember this investment will help mitigate the impact of increasing costs. The fact is whatever we do, energy prices are going to have to go up to replace ageing infrastructure and meet climate change targets – unless we build new nuclear as part of a diverse energy mix.”
However, Dr Paul Dorfman, from the Energy Institute at University College London, added: “what it equates to actually is a subsidy and the coalition said they would never subsidise nuclear”.
How much energy will Hinkley provide when it is up and running?
Once developed Hinkley will provide 7 per cent of the UK’s energy mix. It will cost £16 billion to build and is expected to be ready by 2023.
How is Ineos currently doing, wasn’t it going to close a short while ago?
Yes, the company had announced in October the permanent closure of the Grangemouth plant in Scotland, which would have affected 800 jobs. However, when a bitter dispute between Ineos and the unions was called off it was announced that the plant would stay open.
However, Ratcliffe has said that Ineos, which will be the first company to import shale gas from the UK, was on a “knife edge” since that troublesome time.
He told the BBC: “I think Grangemouth has the prospect of a very good future if it can get through the next three years.”
“Attitude on the site is much more positive and you can see people are really anxious to move on.”
Grangemouth provides 70 per cent of the fuel used at Scotland’s filling stations.