The government’s plans to quit the Euratom treaty pose a fresh threat to the UK’s increasingly embattled nuclear new build programme, a new report has warned. The study, issued by the Institute of Mechanical Engineers says that the government’s plans to exit the treaty could imperil fuel supplies, jeopardising energy security as well as threatening plans to build new nuclear reactors and decommissioning activities. Former energy secretary of state Sir Ed Davey told Utility Week last week that withdrawal from Euratom put the nuclear sector’s security of supply at risk. The report’s publication coincides with reports this morning that companies building the new generation of nuclear stations have been told that new strike price agreements must offer a lower guaranteed electricity price than the £92.50 per MW hour deal concluded for EDF’s Hinkley C plant. According to the Financial Times, the government has indicated that it wants the level of future agreements to be 15-20 per cent lower. In its new report, the IME calls on the government to cushion the blow of Euratom withdrawal by creating a transitional framework for the nuclear industry.
Utility Week 16th Feb 2017 read more »
The UK Government’s plans to leave the EU, and consequently the European Atomic Energy Community (Euratom), could threaten plans to build new nuclear reactors and decommissioning activities, as well as jeopardise energy security due to the impact on nuclear fuel supplies, according to a new report by the Institution of Mechanical Engineers.
Energy Business Review 16th Feb 2017 read more »
Moorside is supposed to be one of six new nuclear schemes built around the UK. These form the backbone of government plans to renew and decarbonise the UK’s electricity system. Carbon Brief has a summary of the plans and how they fit into the UK’s climate and energy future. Existing nuclear plants have a combined capacity of 8.9 gigawatts (GW). Last year, they generated 72 terawatt hours (TWh) of electricity, around a fifth of the UK total and their highest output since 2006. The UK plans to cut emissions to 57% below 1990 levels by 2030 and to close all coal plants by 2025. That’s where new nuclear plants are supposed to come in. The most recent government projections, published in 2015, suggest new nuclear power will play a growing role in the UK’s electricity mix. The UK’s nuclear capacity will begin to fall in the early 2020s, with the 1GW Hunterston B and 1GW Hinkley Point B closing in 2023. If the 14GW of projected new nuclear plants were replaced with gas, it would add 42MtCO2, equivalent, or more than 8% of current UK greenhouse gas emissions (497MtCO2 in 2015). For the UK’s fifth carbon budget in 2028-32, UK emissions must fall to an average 353MtCO2 per year. Alternatively, each 1GW of nuclear could be replaced with 2GW of offshore windfarm capacity or 3.2GW onshore, because windfarms have lower load factors than nuclear or gas-fired power stations. To replace all 14GW of planned new nuclear would therefore require 28GW of offshore wind or 45GW onshore, compared to current capacities of 5.1GW and 9.4GW respectively. These figures are far beyond current plans and could even push the limits of what is technically possible for the UK.
Carbon Brief 15th Feb 2017 read more »
Letter Dr Simon Taylor, director, Master of Finance, Judge Business School. In “The case for public funding of UK nuclear” (editorial, February 14) you argue that market failure justifies government funding of nuclear power in the UK. Market failures, such as externalities and public goods, are cases where the conditions for a free market to work well are absent. But your argument that investors require too short a payback time on investment is doubtful as a case of market failure. The private sector routinely funds very long investments in technology (companies with no profits), and in bioscience (drugs take many years to come to fruition). We also see private funds for very large capital-intensive investments of high risk and long payback, such as liquefied natural gas in Russia and Australia. In some cases these projects have suffered delays and cost overruns of a scale similar to the troubled nuclear industry. So the private sector’s refusal to finance new nuclear appears a rational response to the enormous construction risk, a point reinforced by Toshiba’s latest troubles. Nuclear is but an extreme case of the wider private sector unwillingness to invest in greenfield infrastructure. Once built these assets may become acceptably low risk private investments. The Wylfa project you mention actually has better prospects of success because it plans to use the advanced boiling water reactor (ABWR), which is a proven design that has actually been built on time and budget (in Japan and Taiwan), unlike the reactors in the other new nuclear projects in the UK.
FT 17th Feb 2017 read more »
Remember “Nuclear power? No thanks”? That sunny, smiling sticker which was almost standard on the back of every Citroen Deux-Chevaux? How we smiled at such naivety. Nuclear power was the future! The fume-belching little 2CV may have gone the way of the Trabant but, after another grim week for the nuclear industry, it seems those stickers may have been right after all. A financially viable nuclear power station looks increasingly like a mirage. Even the eye-watering guarantee from the UK taxpayer for Hinkley Point C is not enough to cover the risk that building it will bankrupt EDF. Toshiba’s woes have claimed the scalp of its president. Hitachi is signalling that its project in Anglesey needs government backing to proceed. It’s telling that after 60 years of mostly successful operation, commercial viability still eludes the nuclear power industry. Perhaps we have been lucky to have avoided serious accidents and the decommissioning costs were hugely underestimated – but the combination of ever-rising safety demands and cheap hydrocarbons has destroyed its economics. Appealing for fresh state aid looks like a desperate last throw of the nuclear dice. If an industry cannot finance its own projects after half a century of development, it may be time to try another industry.
FT 17th Feb 2017 read more »
Toshiba’s nuclear meltdown has come as little surprise to an industry wracked by spiralling losses, credit downgrades and growing debt. The latest signs of crisis within Toshiba’s US-based nuclear company follows the French government bail-out of reactor developer Areva which wracked up 10bn euros of debt in five years and billions in cost pressures facing state nuclear giant EDF. But further east the prospects for nuclear development are rosier, revealing a twin-track fate for nuclear developers depending on the political climate they are based in. World Nuclear Association (WNA) figures have revealed that the number of new reactors under construction is at one of the highest points of the past two decades. In the USA and Europe reactors may be shutting down faster than they are being built but the strong growth of Government-backed projects in India and China are leading the way in rolling out new nuclear reactors. The difference, according to experts, is in the level of state support.
Telegraph 16th Feb 2017 read more »
Is nuclear power a busted flush? With controversy now hampering two of the UK’s most developed new nuclear projects, it’s hard to feel optimistic. It would be hasty to let these setbacks destroy the case for nuclear power, however. Britain’s current plans involve relying on large nuclear projects for years to come. Rather than throwing up our hands in despair and banking on cheap gas supplies to last for ever, we had better develop the ability to build nuclear plants on time and on budget. Other countries have shown it can be done. Nuclear combines three major advantages that elude fossil fuels and renewables: it generates extremely little pollution, can provide a much needed boost to our energy security and supplies reliable power not dependent on the weather. The reason that nuclear is so eye-wateringly expensive is that we haven’t built many new plants for decades. “If you just build nuclear power plants once every 20 years you never develop that supply chain or capability. The good news is that the more predictably we embark upon these projects, the more reliably and successfully they will be executed. South Korea, for example, manages to build new nuclear plants on time and on budget consistently . Why? Because it has not allowed its nuclear programme to lapse. The second way forwards is to invest in smaller plants. Building modular nuclear reactors in factories i s a new idea , but the UK is investing £350m in developing technology to do it and one prototype is already under regulatory consideration in the US. Smaller reactors will lend themselves more easily to private financing as they can be brought online more quickly and investors don’t have to wait so long to start getting returns.
Telegraph 17th Feb 2017 read more »
The UK government’s nuclear new build ambitions have been branded “pie in the sky” by an international energy expert, as Toshiba announced this week that it will not take a construction role on its proposed £106bn Moorside plant in Cumbria. According to reports this week, the Department for Business, Energy and Industrial Strategy is pushing the Treasury to help with building the costly nuclear power plants by taking stakes in the projects. Taking minority stakes, worth up to 30%, would mean the construction cost of the power stations would not show up on the government’s balance sheet. But Mycle Schneider, who has advised a number of European governments on nuclear issues, said the cash-strapped UK government would not be able to offer the level of capital support required to deliver the planned fleet of new atomic power plants. Hinkley alone has an estimated construction cost of £18bn. He said: “It’s very clear that the public subsidy would be very limited. We are talking about very large sums of money. This is pie in the sky. If the government comes up with a few billion pounds, it will not be enough to fill the gap.” Schneider said the government should put its efforts instead into encouraging renewable energy, which is delivering increasing levels of generation capacity.
Building 17th Feb 2017 read more »