UK ENERGY NEEDS: SECURITY OF SUPPLY

EVER SINCE the Labour government under Tony Blair rebooted nuclear power some 13 years ago, successive British governments have been committed to new reactors to secure electricity supplies and by cutting carbon emissions. Yet, those ambitions have yielded just one project that is currently under construction – Hinkley Point C in Somerset.

The past three months or so have dealt serious blows to hopes for more. Toshiba scrapped its plans for Moorside in Cumbria and Hitachi has axed Wylfa. That means that a second Hitachi plant planned for Oldbury in Gloucestershire is also doomed. Together, these three projects would have provided around 15% of current UK electricity demand.

This must now raise the question: is it time to rethink plans for new nuclear, and focus on more renewables – or redouble our nuclear efforts?

The UK needs more low-carbon power. Coal and old nuclear plants are shutting, and tough climate targets are looming.

Environmental groups, such as The Green Party and Greenpeace, want to ditch nuclear in favour of more renewables, more energy efficiency, imports, batteries and other technologies. Most energy industry experts, however, think we still need nuclear. They say that if we try and rely on just renewables and storage, without carbon capture and storage or nuclear, then we will be looking at a very challenging transition and one that is costlier than a balanced mix.

National Grid’s four future energy scenarios all envisage some new nuclear, though the amounts do differ.

The main issue is that nuclear provides baseload power (or continuous electricity supply). But there is a school of thought that baseload is a 20th-century thing. Those who suggest such an argument might be right. It would, though, be a big call by government to suggest baseload won’t be a thing by 2025.

The government has already downgraded the amount of new nuclear it expects to be built. It assumes 13GW of new nuclear capacity by 2035 – or three more plants on top of the 3.2GW at Hinkley. There are now just two companies in the running, with plans for two new plants. French state-owned EDF, which is behind Hinkley, wants to build a carbon copy of that project at Sizewell, on the Suffolk coast, in 2021. Chinese state-owned CGN, is working on a Chinese-designed reactor for Bradwell in Essex, to be operational around 2030.

Hitachi’s withdrawal suggests the financing model used for Hinkley and proposed for Wylfa – a guaranteed price for the electricity generated for 35 years – is now dead. The alternative is the “regulated asset base” (RAB) model, where a regulator sets a fixed sum for the plant’s costs and fixed returns for the developer, paid for by energy bill payers or taxpayers. Critics say RAB loads the risk of construction delays – such as those seen in France and Finland – on to citizens. Returns would be paid for years before any electricity was generated.

Labour, which is pro-nuclear, has branded the approach risky and reckless, but has not put forward an alternative.

So, could Britain manage without nuclear? The answer is maybe, but it would take a lot more renewables. Filling the 9.2GW-sized hole left by Moorside, Wylfa and Oldbury would require 14GW of offshore wind power, according to the Energy and Climate Intelligence Unit. That is the equivalent to more than 20 of the world’s biggest offshore windfarm, which consists of 87 giant turbines.

Undoubtedly, that would mean spending a vast amount of money on saturating the UK with offshore wind – with enough turbines in enough different locations to replicate the “always-on” nature of nuclear. Large-scale batteries will help, but they won’t address the fact that electricity demand is much higher in winter than summer – or solve long windless spells.

The other big techno fix could be carbon capture and storage (CCS) systems attached to fossil-fuel power stations. However, years of government efforts to kickstart it have failed. Officials have been working on CCS gas for around 20 years and are nowhere near reaching a satisfactory outcome that are mainly due to cost considerations.

ALL sources of electricity face the same trilemma in the 21st century: carbon emissions, continuity of supply and cost. The British government has placed a big bet on nuclear power, but reactors meet only two of the three challenges. Nuclear power is low-carbon and a secure source of electricity – but it is hugely expensive.

While building nuclear plants and fuelling them requires concrete, transport and so on, the overall emissions are similar to wind power and solar power. All produce far less carbon than coal- or gas-powered stations.

Nuclear power also largely passes the security of supply test. The giant plants provide steady electricity 24 hours a day, but are incredibly complex, and technical problems can result in long shutdowns. They also need vast amounts of cooling water, causing problems during periods of droughts.

Nuclear power’s big problem is its price tag – building extraordinarily complicated plants and keeping them safe is extremely expensive. Solar and onshore wind power prices have plummeted and are now about one third of that of nuclear. How to deal with nuclear waste in the long term is another expensive, and as yet unresolved, headache.

The industry has hopes that “small modular reactors” could be cheaper and faster to build. But to fight global warming the world needs low carbon energy now, and no SMR is likely to be generating power in the next 10 years because of long and rigorous safety checks.

The government faces a difficult decision. It could persist with its nuclear dream, hoping that a way to finance new plants can be found and that they are then built on time and on budget.

Or it can pivot towards renewable energy, storage and interconnectors, potentially with gas plants that capture and bury their carbon emissions as a backup. That would mean overturning its antipathy to onshore wind and solar power and ramping up offshore wind.

Around the world only two nations are putting new nuclear plants into service: China and Russia. Overall, nuclear construction is at its lowest for a decade and global nuclear generation has been flat since 2000. Even France, that most nuclear of countries, is planning big cuts in nuclear power. If Britain persists with nuclear, it will be swimming against the international tide.

SUMMARY

. Britain’s old nuclear power stations supply a fifth of electricity supplies and are a significant part of the energy system. However, their share of the mix has been gradually shrinking as renewables have grown. Significantly, seven of the eight nuclear sites will have shut by the end of the 2020s as they reach the end of their economic lives, with just Sizewell B in Suffolk continuing to operate. The government has also committed to shutting the country’s last seven coal plants by 2025 at the latest.

. So far, the only nuclear project to get the go ahead is EDF Energy’s Hinkley Point C, a 3.2GW plant in Suffolk that will power around 6million homes. It is officially due to begin supplying electricity in 2025, but similar projects in Finland and France have run many years over schedule. EDF has warned the plant may not be generating until 2027. Originally there were plans for five nuclear plants to meet Britain’s new nuclear ambitions. But three – Moorside, Wylfa and Oldbury – have been shelved. That leaves Sizewell C, backed by the Chinese state firm CGN, and the 2.3GW, Chinese-led Bradwell B in Essex (in which EDF has a one third stake).

. The UK government negotiated a guaranteed price for power for 35 years with EDF Energy for Hinkley. Hitachi was trying to do the same, with the government taking a multibillion-pound stake, but could not make the numbers work.

Attention will now turn to a new method of financing known as the regulated asset base model (RAB). The UK government plans to give more details later this year. An RAB model is one in which the regulator sets fixed costs and fixed returns for a nuclear developer to overcome the huge upfront cost of constructing plant and the years-long delay for investors reaping a return.

. No new nuclear plants would pose a challenge to carbon targets, but it is unlikely to threaten energy supplies, given the speed with which gas plants and windfarms could be built. Offshore wind power could fill the gap, and more inshore windfarms and solar power would help. The intermittent nature of those technologies could be addressed to a degree by more batteries and other storage, imports and technologies that allow big energy users – and maybe homes – to reduce consumption at peak times in return for a financial incentive.