February 23, 2022

Energy giant EDF has announced plans to extend the lives of two of the UK’s five remaining nuclear power stations.

Heysham 1 and Hartlepool had been due to close in March next year, but they will now be kept open until early 2026.

The company says the move will support energy security, reduce demand for imported gas, and reduce carbon emissions.

About 1,400 people work at the two sites, with hundreds more in the supply chain.

The government welcomed the news, with Secretary of State Grant Shapps saying Russia’s invasion of Ukraine demonstrated the “vital importance” of bolstering energy security.

Heysham 1 and Hartlepool began operating in 1983. Each has two Advanced Gas Cooled reactors, which were originally scheduled for closure in 2014. Two previous lifetime extensions had taken the closure date to March 2024.

The two power stations currently account for about 5% of the country’s electricity.

The announcement comes at a time when the country’s energy security has been coming under intense scrutiny.

The bulk of our electricity is generated from gas. Last year, the conflict in Ukraine led to a sudden spike in gas prices – which also led to a steep increase in electricity bills.

Renewable generation, from wind and solar power for example, has been growing rapidly in recent years. But the amount available to the grid can vary according to the time of day and the weather.

Supporters of nuclear generation argue that it provides baseload power – in other words, a predictable and stable supply – although other sources are needed to react quickly to spikes in demand.

To prevent potential blackouts this winter, five ageing coal plants have been kept on standby by National Grid.

Earlier this week two of them were ordered to start generating power, as a combination of high demand and limited supplies led to concerns about possible shortages.

A new scheme under which consumers are paid to reduce consumption at peak times has also been tried out recently.

EDF said the decision to keep Heysham 1 and Hartlepool open had been taken following a “rigorous review” of the technical and commercial cases for keeping them open.

It pointed to inspections of the reactor cores last year which “increased confidence that the stations can generate for longer and continue to meet stringent regulatory standards”.

The company has, however, closed three other nuclear power stations over the past 18 months.

Under current plans, even with the extensions agreed today, the country’s entire fleet of AGR reactors is due to close by 2028.

Sizewell B, a reactor built to a different design, is expected to remain open until 2035.

The government is committed to building a new generation of nuclear power stations. But only one – Hinkley Point C – is currently under construction.

The new £25bn plant, which has been beset by rising costs and delays, is not expected to open before June 2027.

An expert group that includes some vocal opponents of nuclear power, the International Nuclear Risk Assessment Group, said in 2021 – in a report looking at ageing nuclear power plants – that extensions inevitably increase the risk of accidents, including the release of radioactive substances in to the environment.

Heysham 1 and Hartlepool began generating power in the 1980s.

Reference: https://www.bbc.com/news/business-64906179

Rising inflation led to government interest payments hitting a record high for the month of January, figures show.

Interest payments hit £6.1bn last month, the highest amount for January since records began in April 1997 and up from £4.5bn last year.

The payments are pegged to the Retail Prices Index (RPI) measure of inflation – which reached 7.8% in January.

January’s interest payments were, however, below the all-time high of £9bn in June last year.

Paul Johnson, director of the Institute for Fiscal Studies, told the BBC it was worth noting that “overall interest payments by the government are still at remarkably low levels” despite UK debt levels at the highest for 60 years.

“Year after year interest payments have come in below expectations and that has given the chancellor additional wiggle room,” he said

The Office for National Statistics (ONS) said government finances recorded a surplus of £2.9bn last month as the economy opened up from lockdowns and tax receipts improved.

The surplus compares with a £2.5bn deficit in January 2021 – when spending on coronavirus support measures was higher.

However, the latest figure is still a £7bn smaller surplus than in January 2020, before the pandemic.

UK finances are normally healthier in January as self-assessment income tax receipts come in. Revenues from self-assessed tax was £18.4bn last month, an increase of £2bn from a year earlier.

Borrowing from the end of March to January was £138.5bn – the second highest for the period since records began in 1993.

Mr Johnson told the BBC the figures showed “we are still spending an awful lot more. We are poorer than we were.”

But he said the bigger picture was that the deficit – the gap between spending and tax receipts – was coming down quickly. Some big tax rises this year will also mean the government borrowing less, he added.

January is normally a month when the Treasury reaps the benefit of large tax payments from self-employed workers, with more money coming in than going out.

The public sector finances were always going to look comfortable compared with the same month last year when the lockdown over Christmas and the new year dented economic activity.

But a surplus of £2.9bn in January 2022 is still £7bn less than before the pandemic, reflecting the impact of Omicron.

It’s notable that borrowing in the financial year to date has more than halved, down by £140bn, before the Chancellor Rishi Sunak’s forthcoming tax rises have taken effect.

That illustrates a point already evident from the efforts in the past 13 years of successive chancellors, first Labour then Conservative, to fix the public finances by imposing austerity: namely, it’s not so much what the chancellor does, but what the economy does, that most effectively cuts government borrowing.

Refrence: https://www.bbc.co.uk/news/business-60431535