When it comes to Britain’s future energy mix, it seems pretty clear coal is out and renewables are in – but slightly less cut and dry is the UK nuclear power strategy.
On the one hand, it appears the country is preparing to gradually phase out virtually all its nuclear capacity as 14 of its 15 operational plants are to be decommissioned by 2030.
On the other, it has six new facilities in the works, combining for a cumulative worth of more than £100bn and offering up many gigawatts (GW) of power – though some have stalled and look to be hanging by a thread.
Speaking to Parliament last week, Business and Energy Secretary Greg Clark said: “Across the world, a combination of factors including tighter safety regulations have seen the cost of most new nuclear projects increase, as the cost of alternatives has fallen and the cost of construction has risen.
“This has made the challenge of attracting private finance into projects more difficult than ever, with investors favouring other technologies that are less capital-intensive up front, quicker to build, and less exposed to cost overruns.
“But this government continues to believe that a diversity of energy sources is a good way and the best way of delivering secure supply at the lowest cost, and nuclear has an important role to play in our future energy mix.”
Despite Mr Clark’s words, the picture remains unclear as to whether or not the UK plans for nuclear energy to play a significant role in powering its grid over the coming decades.
What does nuclear power do for Britain?
Nuclear power provided 21% of the UK’s electricity mix and 40% of its low-carbon generation last year.
The combined power of the country’s active power plants means 49 million fewer tonnes of carbon dioxide emissions are produced each year, according to the UK’s Nuclear Industry Association (NIA) – the equivalent of taking about 75% of Britain’s cars off the road.
And as a sector, nuclear energy provides jobs to more than 64,000 people across the UK.
Tom Greatrex, CEO of the NIA, says: “The urgent need for further new nuclear capacity in the UK should not be underestimated.
“If we want a balanced generation mix, government must work with industry to deliver that vital capacity on this site.
“At stake are our ability to provide bulk, low carbon power, energy security, and the potential loss of the chance of thousands of highly skilled, well-paid jobs.
“Without a diverse low-carbon mix and with increasing demand to power electric vehicles, we also run the risk of becoming more reliant on burning fossil fuels to produce our electricity.”
UK nuclear power strategy hampered by lack of funding
While it evidently provides huge amounts of energy, nuclear power does not come cheap and funding it appears to be one of the biggest barriers to the form of energy having a more wholesale presence in Britain.
Investment troubles have plagued many nuclear projects in recent months, with the £20bn planned Wylfa Newydd facility in Anglesey, operated by Japanese conglomerate Hitachi’s UK subsidiary Horizon Nuclear Power, hitting a roadblock.
Hitachi said it had been unable to agree a financing deal with the UK government but refused to rule out revisiting the project in the future.
Speaking this week at the World Economic Forum’s annual meeting in Davos, Switzerland, Hitachi’s chairman Hiroaki Nakanishi said the only way forward for the project was for the British government to nationalise it.
Matthew Haswell, director of energy at global recruitment firm Samuel Knight International, says: “There’s no doubt the government needs to play a more significant role in financing new-build reactor projects.
“While nuclear and renewables both have a key role to play in the UK Energy matrix, nuclear currently stands at a crossroads in terms of viability, especially with the ever-lowering cost of renewable budgets.”
The Moorside project in Cumbria, owned by Japanese firm Toshiba and its subsidiary NuGeneration Limited (NuGen), has also stalled due to money problems.
The conglomerate wound up NuGen after failing to find a buyer for the £15bn scheme, which was expected to provide 7% of the UK’s electricity once coal power is phased out.
Mr Haswell says: “The greatest concern for me is the cost of new-build reactors and the perception that this isn’t a financially viable framework that investors will get a profit from.
“As both the Horizon and NuGen projects have confirmed, investors don’t currently see value in such projects.”
Complex technology holding nuclear energy back
In addition to their sky-high costs, nuclear power plants also have the longest gestation period of all energy generation technologies.
The fact they take so long to build – typically multiple decades per facility – makes them an unattractive prospect for investors out for a quick return on their buy-in.
Data insight firm GlobalData’s director of power Harminder Singh says: “The high capital costs and long build times are two key variables that add uncertainty to the process of setting up nuclear power plants.”
The technological complexity behind nuclear power facilities also makes getting them built a laborious process, according to the analyst.
He explains: “The Hinkley Point C project is based on Orano’s [a French multinational focusing on nuclear and renewable energy] technology, which has its own challenges in terms of cost and implementation.
“One example is the Olkiluoto 3 plant in Finland, which uses the same technology and has been plagued with severe delays – almost ten years – and cost overruns.
“Final estimates suggest it has reached almost three-times the original cost of 3.2bn euros (£2.77bn).”
Can renewable energy replace nuclear power?
Three nuclear power plants, Hinkley Point C, Sizewell C and Bradwell B, look to be on course and would prove substantial in helping the UK energy industry meet its national demand.
But with Moorside, Wyfla Newydd and the country’s last potential nuclear facility at Oldbury-on-Severn, in South Gloucestershire, looking doubtful at best, it seems for the moment nuclear power is not going to play a role in keeping Britain’s lights on for much longer.
“In the wake of the recent suspension of the Wylfa Newydd project, and the Moorside and Oldbury schemes meeting the same fate earlier, it has become clear that nuclear is not expected to play a significant role in adding capacity in the UK at least in the near future,” explains Harminder.
“The share of nuclear in the power mix is expected to decline to 6% by 2030, owing to the decommissioning of plants and no new-builds.”
But with fossil fuels also getting the axe as part of the UK’s effort to meet its various emissions targets, the issue then becomes whether or not renewable energy can fill the gap on its own.
It has seen a rise to prominence in the country’s electricity mix over the past decade, contributing roughly 9% in 2010 and shooting up to more than 40% last year.
By 2024, it is expected to cross the 50% mark, with Britain’s offshore wind capacity – currently the largest in the world – at the forefront.
Harminder says: “Since renewable energy can be installed fairly quickly, it is possible for this form of energy to fill the gap left by nuclear power.
“The declining cost of renewables makes them even more attractive compared to an expensive source of power such as nuclear.
“However, government support will play an important role in renewable capacity addition – the auctions for offshore wind farms will need to continue in order to provide the necessary capacity addition to counterbalance the nuclear gap.
“Furthermore, large-scale storage capacity and other balancing mechanisms will be necessary in the grid in order to support absorption of large amounts of intermittent power.
“Gas is also expected to play a key role to provide reliable and flexible energy supplies -new technologies and sources of low carbon gas can help in meeting the decarbonisation targets.
“Ultimately, offshore wind capacity can prove to be a game changer if supported by the right mechanisms to balance the grid.”
