Net Zero | Nuclear

Large-scale nuclear is a proven technology with a 60-year operational track record and currently nuclear plants provide approximately 18% of the UK’s electricity. As such it presents a low technical risk however the UK’s current nuclear fleet is approaching the end of its working life, with 8 out of 9 currently operating stations due to close between 2020 and 2030.

Government policy for the past decade has been to replace this capacity with a commitment to build 15GW of new nuclear power. However large nuclear plants face major affordability challenges, with the cost of capital being a particularly sensitive issue.

The collapse of the Wylfa project brings into focus the tension between climate policy goals and the Government’s risk appetite.

The recent suspension of the Wylfa project shows that the current UK market model does not support large nuclear project development. Despite Government policy commitments, it was not possible for them to agree a deal enabling Wylfa to proceed. The LCOE of Wylfa is estimated to have been approximately £75/ MWh, however to have achieved this the Government would have had to invest equity and carry a share of the project risk.

Technology

Large-scale (>1 GW) nuclear, using light water-cooled reactor technologies, is a proven generating technology with a global deployment history. The most recent Gen III and Gen III+ reactors draw on this engineering heritage and also offer proven and reliable technology.

Across the UK there are suitable sites available for the deployment of new large-scale nuclear, and there is a centralised planning framework in place to strapline their development. Whilst most of these sites would require upgrades in grid connections and infrastructure the UK’s energy transmission system is already set up for centralised large-scale generating technology. Therefore, from a technological standpoint nuclear is low risk.

Recognising the affordability challenge of large-scale plants, the nuclear industry has proposed small modular reactor (SMR) technologies as an alternative. The options for SMRs, based either on scaled-down and integrated PWR technology, or on so-called ‘advanced technologies’, could be used not just for electricity generation, but also for heat use and energy storage.

With the right support, appropriate licensing and public acceptance, certain SMR designs could be available by the early 2030s.

Future

A major challenge in the UK for nuclear is the affordability of project capital investment, with reactors costing in the region of £7bn per unit, plus the long lead time before generation and return on investment – it’s unlikely a project can move from initial permitting to commissioning in less than 10 years.

This has been recognised by the Government and a consultation on an alternative financial model was launched in July 2019. There is also much the industry can do to realise costs savings. The Nuclear Sector Deal sets out a target of a 30% reduction in cost with the UK new build programme by 2030.

There are two key initiatives we believe warrant policy consideration:

Repetition nuclear new build projects are exceptionally complex endeavours. To obtain the efficiency gains found in other industries they require repetition, building the same technology, in the same way, by the same organisation – although this may run counter to competition policy.
Nuclear Safety and ALARP – we would recommend a review of how the As Low as Reasonably Practicable (ALARP) principle, which underpins nuclear safety is applied. Ensuring that reduction of risk continues, whilst avoiding the ratcheting of unnecessary costs.

Firm, low-carbon power in the generation mix

Nuclear is a clean, proven, low-carbon and reliable method of producing firm energy. And the firm energy that nuclear can offer is crucial for underpinning stability.

The lack of investment in nuclear new build over the last 20 years and the collapse of Wylfa puts in doubt the UK’s continued deployment of new nuclear, which is the only viable firm-power alternative to combined cycle gas turbines (CCGT) with carbon capture and storage (CCS).

If CCS isn’t implemented at the pace required by the current Net Zero scenario – with plants beginning operation in the 2030s and able to support the large increase in hydrogen production mandated – then an increase in our nuclear capacity may be the only way of achieving Net Zero by 2050. There is a risk that the industry’s supply chain capability will not be sustained beyond the current planned new build programme which could preclude additional nuclear as an realistically-deployable option in the future.

Nuclear and combined cycle gas turbines (CCGT) are the only viable options to provide firm low-carbon power in the UK.

But neither new nuclear or CCGT withCCS will be forthcoming without determined policy changes which are sustained over the long-term.

The role of nuclear in Net Zero

Technology

Future

The role of nuclear
in Net Zero