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 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.