Following the announcement of the delay to Hinkley Point C, we have released Version 2.4 of the Modo Battery Revenue forecast. This has changes to nuclear capacity construction timelines.
Completion dates for all pressurized water reactors (PWRs) have been pushed back by 2 years, following with the latest Hinkley delay. Overall, this has a minor impact on revenues - leading to a 0.6% increase in total lifetime revenues.
You can read more about this update in our changelog here.
In this article, we explain these changes in capacity assumptions and their effects on battery revenues.
Completion dates for new nuclear plants are pushed back by 2 years
On January 23rd, EDF announced a further delay to its Hinkley Point C nuclear power station. This pushed back the completion of the first reactor to between 2029 and 2031, from 2027 previously.
In the central scenario of our forecast, we have assumed the best-case scenario for the construction of Hinkley Point C reactors 1 and 2. Unit 1 comes online in 2029, with a two-year delay, and unit 2 in 2030.
Following revised construction timelines, we have also applied a 2-year delay to the completion dates of Sizewell C, and two further PWR nuclear plants expected online in the late 2030s. Other new nuclear capacity is assumed to be small modular reactors (SMR), with no construction delays.
Battery revenues decrease in the short-term but increase in the 2030s
Overall, total lifetime revenues change by only 0.6% as a result of these changes to nuclear capacity. Despite this low overall change, there are more significant changes to revenues in individual years.
Revenues decrease by 3% in 2028 due to a reduction in the average daily price spread. The shortfall in nuclear generation resulting from the Hinkley Point C delay in this period is mostly met by generation from gas CCGTs, or changes in interconnector flows.
With gas setting the price more often, average prices increase by 7%, but daily spreads decrease by 1.5%. This decrease occurs primarily because of a 32% fall in the number of zero or negatively priced periods.
An increase in the frequency of price spikes in the 2030s increases revenues
Revenues increase by a maximum of 8% in 2036 as the delayed nuclear buildout leads to an increase in the frequency of scarcity price-driven events. Unlike in 2028, the reduction in operating nuclear capacity cannot be met be CCGTs or interconnector imports.
Average daily spreads increase by 14%, driven by an increase in the frequency of price spikes. For example, 3 days in 2036 have price spreads greater than £1,000/MWh with the delay to nuclear capacity, compared to just one without the delay.
Source data