Britain does not need Hinkley for future energy needs -think tank

LONDON (Reuters) - Britain does not need the Hinkley Point C nuclear project and could use a mixture of alternative resources to guarantee its future energy needs at a lower cost, an energy and climate think tank said on Friday. Britain stunned the energy industry in July when, at the last minute, it failed to sign off on an 18 billion-pound plan by France's EDF to build two reactors at Hinkley with financial backing from a Chinese state-owned company. Prime Minister Theresa May's government said it needed more time to consider the plan after critics said it would endanger Britain's energy security and cost more than was necessary. Britain needs to invest in new power stations as all but one of its existing nuclear plants, which produce around a fifth of the country's electricity, are set to close by 2030. Coal-fired power plants provided around a quarter of the country's electricity last year, but the government plans to close them by 2025 as a part of efforts to meet climate targets. The Energy & Climate Intelligence Unit, a non-profit organisation which provides analysis on British energy and climate change issues, said the country could meet its targets even without the Hinkley project. The group said a mixture of established approaches could be used, such as wind farms, gas-fired power stations and cables that connect the UK grid with other countries. Combined with measures to manage demand, Britain could save around 1 billion pounds ($1.32 billion) per year, it said. "Our conclusion is that it's not essential," ECIU director Richard Black said. "Using tried and tested technologies, with nothing unproven or futuristic, Britain can meet all its targets and do so at lower cost." The report said four big wind farms, in addition to those already being built, could bring as much electricity into the grid as Hinkley would generate, while three additional inter connector cables could also offer the same supply. "The scenarios outlined in the ECIU report are not credible alternatives to Hinkley Point C," an spokesman for EDF's British subsidiary EDF Energy said in an email. "(Hinkley C's) cost is competitive with other large-scale low carbon technologies. It will generate electricity steadily even on foggy and still winter days across Northern Europe. It will play a crucial role as part of a future, flexible energy system," he said. EDF was awarded a minimum electricity price contract by the British government of 92.50 pounds per megawatt hour (MWh), while similar contacts awarded so far for offshore wind production have been for 115-120 pounds/ MWh. May's government has indicated it will make a decision on Hinkley in September. (Reporting by Kate Holton and Susanna Twidale, editing by David Evans)