Nuclear power plants face closure due to windfall tax

Two nuclear power stations crucial to keeping Britain’s lights on are at risk of closure next year due to Jeremy Hunt’s windfall tax, their French owner warns today.

EDF, which operates the country’s five nuclear power plantssaid the Chancellor’s raid on power generators will make it harder to sustain aging Heysham 1 and Hartlepool stations for as long as planned.

It would mean the sites would close in March 2024, potentially removing the ‘cushion’ of spare capacity used by the National Grid to stave off blackouts and reducing Britain’s nuclear power generation to its lowest level since the 1960s .

Mr Hunt’s one-off tax levy on power generators, which was announced in the fall statement in November, takes effect today. Tory MPs have warned the raid will reduce investment in the UK’s energy market at a time when the country needs reliable power sources to balance more wind and intermittent solar power.

The two nuclear power stations supply more than two gigawatts of electricity to the grid, typically providing enough electricity for four million homes a year and around 4% of the electricity the UK uses in cold weather.

Rachael Glaving, Commercial Director of Generation at French state-owned EDF UK, said windfall tax will hurt facility business case at a time when inflation is already driving up other costs.

She said The telegraph“We accept that there is certainly a need for some sort of levy – you need to break the link between very high gas prices and the impact they have on electricity prices.

“But of course that’s going to be factored into the business case for life extension and we’ll have to take that [the windfall tax] in consideration. It’s not going to make things any easier.

“We will look at the technical aspects, but we also need a business case to support any life extension, so that also needs to be considered, and we will need to find the right balance between those two things.”

Last night, experts warned that shutting down the two nuclear plants would largely eliminate the four gigawatt spare capacity the national grid maintains to avoid outages on calm, cloudy days when wind and solar generation is limited.

Kathryn Porter, energy analyst at consultancy Watt Logic, said: “As we approach the winter of 2024, we will lose all coal-fired power plants and could also lose two nuclear plants, so we will lose about the same amount of energy than we currently have in reserve capacity now.

“We’re going to pretty much replace it with wind – and that’s replacing easily dispatchable generation with intermittent generation.

“So if you have periods of calm winter weather where the wind production drops, then you might find yourself in a situation where you’re really struggling to keep the lights on.”

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