UK nuclear renaissance splutters while renewables boom

UK nuclear generation is down by more than a quarter since a 1998 peak; since then, four gigawatts of nuclear capacity has shut down. Most of the 15 operational reactors are ageing and all of them are expected to close by 2035, with only Sizewell B lasting beyond 2030. It seems increasingly unlikely that new build will match retirements.

In early 2018, the Department for Business, Energy and Industrial Strategy (BEIS) downwardly revised its nuclear power projection, from 17 GW to 14 GW in 2035, compared to current capacity of 8.9 GW. Renewable capacity is projected to reach 68 GW by 2035.¹ Other BEIS projections have fallen further; for example in 2014 BEIS anticipated 67 terawatt-hours (TWh) of nuclear generation by 2024, almost double the more recent estimate of 34 TWh in 2024.²

The UK Nuclear Free Local Authorities (NFLA) said in the aftermath of Toshiba's November 8 announcement that it plans to liquidate the NuGen subsidiary that was planning reactors at Moorside:³

"While the nuclear industry has lamented the energy and jobs potential it has consistently advocated would come from such developments, it is becoming increasingly clear that the large costs of new nuclear, their sheer complexity and the large subsidies in dealing with the current waste legacy makes such large investments required for them increasingly difficult to achieve. In contrast, increasing evidence shows the costs of renewable energy, energy efficiency, energy storage and suchlike is coming down year on year. Such projects are also much quicker to realise and do not have the safety and radioactive waste issues to resolve that makes new nuclear so complicated and expensive."

The NFLA endorsed an editorial in the Financial Times. An indicator of changing views towards nuclear power, the Financial Times said:⁴

"The cost of replacing old nuclear plants with new ones has steadily risen while technological advances have made the opposite true of wind and solar power. There could still be a case for nuclear power in a complementary mix of supplies that ensure both energy stability and emissions reductions. But that case may weaken to the point of obsolescence by the time five remaining nuclear projects – at various stages of planning – are due to be built.

"The state is not in a position to invest across the board. The borrowing required would run into tens of billions of pounds. Rather than approaching this quandary piecemeal, the government should commission a fresh strategic review. The last one took place in 2013 when the energy landscape looked very different. To keep its place in national ambitions, nuclear power needs to come in at a lower cost and to attract investment. It should not require subsidies unavailable to rivals."

A Business Leader (editorial) in The Guardian said:⁵

"Toshiba's decision to pull out of building a nuclear power station in Cumbria last week will cause shockwaves far beyond the north-west of England. ... Ditching new nuclear would require a huge increase in the amount of wind and solar power already expected in coming years. It would need dramatic progress on energy storage, smarter grids and even more efficient use of energy. All those things will be difficult. But pursuing an impossible atomic dream, as Moorside demonstrates, looks even harder."

National Infrastructure Commission

In a 163-page infrastructure assessment released in July, the government's National Infrastructure Commission argued that the government should take a slower, step-by-step approach to nuclear build and that the government should not agree to support more than one nuclear power station beyond Hinkley Point C before 2025.⁶ Sir John Armitt, chair of the Commission, said there is no need to rush with nuclear because "during the next 10 years we should get a lot more certainty about just how far we can rely on renewables."⁷

Armitt said: "One thing we've all learnt is these big nuclear programmes can be pretty challenging, quite risky – they will be to some degree on the government's balance sheet. I don't think anybody's pretending you can take forward a new nuclear power station without some form of government underwriting or support. Whereas the amount required to subsidise renewables is continually coming down. We've seen how long it took to negotiate Hinkley – does the government really want to have to keep going through those sort of negotiations?"⁸

Richard Lowe from AECOM Infrastructure & Environment UK said in response to the National Infrastructure Commission report: "This sort of message would have a lot of shockwaves. You would have to presume that [the planned] schemes would be affected. It's going to cause Korean and Chinese investors to have a long hard look at whether they still make that investment".⁹ Likewise, Tim Yeo said: "If this is taken on by government, it's a serious blow. You're not going to get people to invest in their supply chains on the basis of only one nuclear plant coming forward."⁹

The Commission estimated that an electricity system powered mainly by renewables would cost no more than relying on new nuclear power plants; indeed it estimates slightly lower average costs for a scenario with 90% renewable and less than 10% nuclear compared to a scenario with 40% renewables and around 40% nuclear. The Commission said the economic analysis factored in the cost of balancing intermittent renewables through storage, smart grids and interconnectors.

The Commission's report states that renewables have been undergoing a "quiet revolution" and there "is ample scope to build on this success in years to come." It says that by 2030 a minimum of 50% of power should come from renewables, up from about 30% today. The Guardian reported in July that renewables have already overtaken nuclear for electricity generation; wind, solar and biomass power stations out-produced nuclear in the previous three quarters with renewables supplying 28.1% of power in the April‒June quarter compared to nuclear's 22.5%.⁸

Armitt said: "When it comes to energy, then we see a future of renewables. ... I think where I have been accused of a change of mind is on nuclear. Where, in the past, I've been a strong supporter of nuclear, this work that we have done in the national infrastructure assessment – and the evidence base that we have got for it – I think that we are in a different world today. We don't have to be as dependent on a nuclear solution as maybe we thought we needed to be 10 years ago."¹⁰

More bluntly, the Guardian's financial editor Nils Pratley said: "The government, when it gets back to governing, needs to respond. Its mania for new nuclear plants has looked out-of-date, wrong-headed and unnecessarily expensive for ages. Now even its own infrastructure adviser agrees. A U-turn is required."⁷

Committee on Climate Change

The Committee on Climate Change (CCC) ‒ an independent, statutory body established under the Climate Change Act 2008 ‒ notes in a June 2018 report that apart from Hinkley, "limited progress" has been made with new nuclear projects whereas renewable power generation has increased four-fold.¹¹

The CCC report states that the share of electricity generated from low-carbon sources has increased from 20% in 2008 to 52% in 2017, driven by a quadrupling of renewable generation between 2008 and 2017, from 21 TWh to 91 TWh. Generation from nuclear power remained fairly constant over that period at around 60-65 TWh per year. Total electricity consumption has decreased by around 13% since 2008, the report states, despite a 5% increase in the total number of UK households.

In a section on the "limited progress in new nuclear", the CCC report states:

"The aim is for the Hinkley Point C plant to commission in 2025, but limited progress has been made with other new nuclear projects, aside from the recent announcements around the Wylfa nuclear plant. Site development and regulatory approval milestones have been passed, though formal negotiations have only just begun with one developer, raising questions over the likelihood of several new nuclear plants commissioning before 2030, beyond the Hinkley Point C project.

"One additional nuclear power plant beyond the Hinkley Point C project by 2030 is considered in two scenarios. If new nuclear projects were not to come forward, it is likely that renewables would be able to be deployed on shorter timescales and at lower cost

"The Government must put in place a progress monitoring framework that allows for risks to delivery of low-carbon projects to be identified ahead of time. In addition, contingency plans for the delay or under-delivery of projects, such as new nuclear or imported electricity, must also be developed. These plans should allow for alternative low-carbon generation to be contracted in time to replace any under-delivery without increasing carbon emissions."

Nuclear doom and gloom

Another indication of the gloom settling over the UK nuclear industry came from Alistair Smith, formerly nuclear development director at contractor Costain. He said in mid-2018 that most contractors have already lost faith. "Aside from those involved in Hinkley, contractors have lost interest and have moved on to more exciting things. Everyone's been burnt so many times that it would take a lot to convince a chief executive to go for another project again."¹²

EDF Energy ‒ majority owner of the UK's nuclear power stations ‒ is considering selling part of its 80% stake in operating UK nuclear power plants while retaining majority ownership. Centrica plans to sell its 20% stake by 2020.¹³ And therein lies one of the problems with the UK nuclear power industry: more insiders want out than outsiders want in.

Meanwhile, the Hinkley construction project moves ahead, £2.2bn over budget and a year behind schedule.¹⁴ In November 2017, the UK Parliament's Public Accounts Committee said Hinkley Point amounts to a "bad hand" and "the poorest consumers will be hit hardest"¹⁵ while the UK National Audit Office said Hinkley Point is "a risky and expensive project with uncertain strategic and economic benefits."¹⁶

Emeritus Professor Steve Thomas told a Parliamentary forum in September 2017: "A recent study estimated that Hinkley would be the most expensive 'object' built on earth. Yet it would use the EPR, a technology unproven in operation and which has run into appalling problems of cost and time overruns in the 3 projects using it. EPR would be supplied by Areva NP, which is in financial collapse and might not be saveable and has been found to be falsifying quality control records for safety critical items of equipment for up to 50 years."¹⁷

Current nuclear new build proposals:

References:

1. Richard Black / ECIU, 5 Jan 2018, 'Nuclear: Time for open competition', http://eciu.net/blog/2018/nuclear-time-for-open-competition

2. Simon Evans, 22 March 2017, 'Analysis: Dramatic shift in UK government outlook for gas and clean energy', www.carbonbrief.org/analysis-dramatic-shift-uk-government-outlook-gas-cl...

3. Nuclear Free Local Authorities, 15 Nov 2018, 'As the Moorside project collapses, NFLA advocate the future is renewable and decentralised energy as Councils pledge zero-carbon by the 2030s', www.nuclearpolicy.info/news/moorside-project-collapses-nfla-advocate-fut...

4. Financial Times, 13 Nov 2018, 'Editorial: The UK must reassess its long-term energy plans', www.ft.com/content/9ac85142-e746-11e8-8a85-04b8afea6ea3

5. The Guardian, 11 Nov 2018, 'Moorside's atomic dream was an illusion. Renewables are the future', www.theguardian.com/business/2018/nov/11/moorside-atomic-dream-illusion-...

6. National Infrastructure Commission, July 2018, 'National Infrastructure Assessment', www.nic.org.uk/wp-content/uploads/CCS001_CCS0618917350-001_NIC-NIA_Acces...

7. Nils Pratley, 10 July 2018, 'Government needs U-turn over mania for nuclear plants', www.theguardian.com/business/nils-pratley-on-finance/2018/jul/10/governm...

8. Adam Vaughan, 10 July 2018, 'Cool down nuclear plan because renewables are better bet, ministers told', www.theguardian.com/uk-news/2018/jul/10/nuclear-renewables-are-better-be...

9. nuclear News, July/Aug 2018, No.109, www.no2nuclearpower.org.uk/wp/wp-content/uploads/2018/07/NuClearNewsNo10...

10. Carbon Brief, 13 Nov 2018, https://www.carbonbrief.org/the-carbon-brief-interview-john-armitt

11. Committee on Climate Change, June 2018, 'Reducing UK emissions: 2018 Progress Report to Parliament', www.theccc.org.uk/publication/reducing-uk-emissions-2018-progress-report...

12. 29 July 2018, 'Is the nuclear tide turning?', www.no2nuclearpower.org.uk/news/comment/is-the-nuclear-tide-turning/

13. Reuters, 11 July 2018, 'EDF considering options over its 80 percent stake in UK nuclear plants', https://uk.reuters.com/article/uk-britain-centrica-nuclearpower-edf/edf-...

14. Adam Vaughan, 3 July 2017, 'Hinkley Point C is £2.2bn over budget and a year behind schedule, EDF admits', www.theguardian.com/uk-news/2017/jul/03/hinkley-point-c-is-22bn-over-bud...

15. World Nuclear Association, 23 Nov 2017, 'British MPs question value of Hinkley Point project', www.world-nuclear-news.org/NN-British-MPs-question-value-of-Hinkley-Poin...

16. Gerard Wynn, 29 Nov 2017, 'IEEFA Update: More Questions on U.K. Nuclear Project', http://ieefa.org/ieefa-update-questions-u-k-nuclear-project/

17. Pete Roche and Rachel Western, Nov 2018, 'Lessons for Hinkley from Sellafield', www.stophinkley.org/WManDecom/HinkleyTHORP.pdf