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Nuclear option

Nuclear option

Nuclear power is a key part of the government’s strategy, but an inadequate solution to the energy crisis and the need for immediate and deep decarbonisation

Could nuclear power form the future backbone of the UK’s energy system? After a 30-year lull in nuclear expansion, Boris Johnson says he wants to “bet big” on reactors in the government’s energy security strategy, to be unveiled on Thursday. It’s not a bet that is likely to pay off.

The context. Five years ago nuclear was a byword in the UK for cost overruns, expensive energy and too much dependence on China. Gas was the baseload power source of choice and renewables were the future.

They still are, but war and the pariah status of Russian gas have changed the world. Johnson has won a row with the Treasury, which will now underwrite a £100bn project to develop seven new nuclear facilities by 2050. 

The plan. Kwasi Kwarteng, the business secretary, says the idea is to build a fleet of large and small reactors to generate up to a quarter of the UK’s electricity. There is a target to more than triple nuclear capacity to 24GW by 2050 while a new “development vehicle” called Great British Nuclear will be set up to cut red tape and secure private funding.

But experts are concerned about the time, resources and commercial backing needed to revive the sector. Last year, annual electricity generated from nuclear dropped 9 per cent to its lowest level since 1982. Two of the country’s older power stations – Hunterston B and Hinkley Point B – are scheduled to close this year, leaving five still active.

The wager. Much is being made of the potential of Small Modular Reactors to close the supply gap quickly. Two companies, Rolls Royce and US-based Last Energy, are in talks with the government to build dozens of football pitch-sized reactors, considered quicker and less risky to build than full size ones like Hinkley Point C – which isn’t due to come onstream till 2026 and is already the biggest building site in Europe.

If government decisions about design approval and finding a suitable site are made in parallel, Rolls Royce could have a first SMR producing power by 2029, says Tom Greatrex, CEO of the Nuclear Industry Association. Rolls says when its production line is up and running each SMR will take four years and £1.8bn to build.

The catch. One at a time may be too tentative. “What is the point in one SMR if the whole idea is to have factory production?” Dieter Helm, energy expert at Oxford University, asked last week. “The Prime Minister’s language about being ‘gung-ho’ about nuclear is, in one sense, correct. You do it and do it properly – or you don’t.”

The cost. Investing in nuclear power carries risks that fall to future generations, so the government, as in France, needs to take stakes in each new plant. The template for this approach is the planned £20bn plant at Sizewell C, in which both the government and EDF are taking a 20 per cent stake. The remaining 60 per cent needs to come from the private sector. 

Johnson met big insurers and pension funds last week to whip up interest. But a spokesperson for one firm that attended told us that in return for its involvement the government would need to guarantee returns. 

To achieve this MPs are legislating for a Regulated Asset Base model that will, in effect, push a share of the construction cost onto customer bills before any power is produced. It wouldn’t be a huge amount (for example, the cost per taxpayer of building Sizewell C is estimated to be around £12 per year) but it could easily climb as the rollout expands and inflation and supply chain constraints push up costs. Not a good look before a general election.

Slow & inefficient transition

Episode three of our myth-busting new podcast series with the Centre for Net Zero and Octopus Energy is available for Tortoise members from Wednesday 6 April.

Tortoise Climate Summit

The world must cut emissions fast. At the second annual Climate Summit on 12 May, we will investigate whether a fair transition can help the world get to net zero faster. Do join us.

In the meantime the answers to two big questions about new nuclear power in the UK are uncomfortably clear:

  • Could it meet surging short and medium-term energy demand in time? No. EDF estimates that Sizewell C, the first of the new plants, won’t be up and running by 2034, one year before the UK is aiming to entirely decarbonise its power supply. Other new projects might not be online until the mid-2040s. 
  • Is this the way to get to net zero on schedule? No. Nuclear plants provide always-on low-carbon energy, but as yesterday’s IPCC report makes clear (see below) the world needs to reach peak emissions within three years. An all-out expansion of renewables plus battery storage and mass home insulation offers a cheaper, quicker, safer way to get there on time. 

Johnson has a chance with this energy security strategy to do what he loves best: announce a big-ticket infrastructure project. He seems to have chosen the wrong one.


nature

Drivers of deforestation
For two weeks in December 2020, 58 people scoured maps of 115,000 tropical places to find out what was causing deforestation. They found that around half of the 10 million hectares of forest lost each year is destroyed by agriculture. About a quarter is specifically lost to large-scale cultivation of products like soy. The study wasn’t interesting only for its findings, but for its unusual methods. The data was gathered through crowdsourcing, with participants given prizes based on the quality and quantity of information they found in the maps. The outcome is a comprehensive dataset, open for researchers and policymakers to consult. A different kind of global commons?


eco-nomics

“Now or never”
Humanity can’t afford to let the energy price crisis derail decarbonisation plans. The latest report from scientists at the UN Intergovernmental Panel on Climate Change (IPCC) warns that the world is on track for 3.2 degrees of warming – not the 1.5 degrees the Paris Agreement aimed for. Among the report’s recommendations is to move money away from fossil fuels and towards renewables. So far, so familiar. But the emissions of existing and planned-for fossil fuel projects alone are equivalent to total current global emissions in a world of two degrees of warming. Meanwhile, investments in emissions reduction remain between three and six times lower than needed to keep warming below 2 degrees. Developing countries need four to eight times more. There is enough capital in the world to close the gap – but it’s not yet going to the right places. 


policy

Nationalising Gazprom
Germany’s energy minister Robert Habeck yesterday announced his government would temporarily take control of Gazprom Germania, an energy business previously owned by the Russian state oil and gas company. Gazprom itself ducked out of ownership of its German subsidiary on Friday, so the government has stepped in in an effort to shore up energy security. The country’s energy regulator will now be able to hire new staff, direct management and remove executives, until at least 30 September. Sky says the UK government is considering something similar – nationalising Gazprom Marketing & Trading Retail (GM&T), which supplies 20 per cent of the gas used by UK companies. Such a buy-out would be costlier than the recent nationalisation of energy supplier Bulb – but such is the price of ditching Moscow.


activism and engagement

The Rebellion Returns
Protestors with Extinction Rebellion (XR) and Just Stop Oil blockaded an oil depot close to Heathrow Airport in the small hours of Monday morning. The protest followed a weekend of direct action and blockades of ten other sites, including depots in Grays, Purfleet, Buncefield, Tamworth and Birmingham, and anticipated a mass planned protest in London this Saturday. After powerfully raising the alarm about climate change in broad terms, XR has seemed to lose some of its initial momentum, appearing unable to translate its own support into backing for specific policies needed to drive down emissions. Oil, even more than gas, is funding Russia’s war. Maybe that is cutting through.

Thanks for reading.

Barney Macintyre
@barneymac


Additional reporting by Ellen Halliday. Edited by Giles Whittell.


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