The uncertainties of Brexit

27 June 2016

The UK's vote to leave the European Union (EU) will not affect Electricite de France's strategy, which includes the planned construction of the GBP18bn ($25bn) Hinkley Point NPP. "We think that this vote has no impact on our strategy," EDF CEO Jean-Bernard Levy told reporters in Paris. "The strategy for our British subsidiary is unchanged."

However, EDF's board has not yet assessed the impact of the "Leave" vote on Hinkley Point, two of the company's board members told Bloomberg. They expressed surprise that Levy said the project would be unaffected without first consulting the board. Both sides of the UK debate voiced support for maintaining a low-carbon, pro-nuclear policy, and for the Hinkley Point project itself, Levy said. Energy Minister Andrea Leadsom, a prominent campaigner in favour of leaving the EU, told parliament in May that power from Hinkley would be cheaper than alternative energy sources.

Fiona Reilly, global head of nuclear capital projects and infrastructure at PricewaterhouseCoopers, said in a statement that the "Leave" decision could have a significant impact" on the UK nuclear programme. "Ongoing uncertainty in the market, at least in the short term, could affect access to capital and investor confidence in what is already a limited trading arena. And while the UK government will need to work out political, trading and legal issues, we will also potentially need to renegotiate our involvement in the Euratom Treaty and our 123 Agreement with the US - and this will take time." She added: "It will be vital for the UK government, [the Department of Energy and Climate Change] and nuclear bodies to work together to secure a positive outcome for our energy industry and we are committed to working alongside them as they adapt to these new market conditions."

NuGeneration (NuGen) and Horizon Nuclear Power, which also plan to build NPPs in the UK, also stressed their continued commitment to the UK's nuclear new build programme. NuGen, the UK joint venture between Japan's Toshiba and France's Engie, said its 3.8GWe Moorside project, based on Westinghouse AP-1000 reactor technology, remains unaffected by the outcome of the EU referendum. NuGen said its shareholders "remain committed to taking forward" Europe's biggest new NPP. "We firmly believe the case for new nuclear power stations for the UK is compelling, and unchanged as a result of the referendum," the company said.

Horizon Nuclear Power,established in 2009 and acquired by Hitachi in November 2012, said it will continue to develop its plans to deploy the UK Advanced Boiling Water Reactor at two sites - Wylfa Newydd, which is on the Isle of Anglesey, and Oldbury-on-Severn, in South Gloucestershire. Horizon aims to provide at least 5.4GWe of new capacity, expecting the first unit at Wylfa to be operating in the first half of the 2020s. Horizon said: "Like all businesses we'll need to assess the wider impacts of the [referendum] result, but we will continue to develop our plans.

Tom Greatrex, CEO of the Nuclear Industry Association, stressed the "significant challenges" the UK and the EU face regardless of the referendum result. "The UK's nuclear industry operates globally, with strong and long-standing business connections, both in Europe and further afield. While the implications of the vote to leave the EU, and subsequent negotiations, will be assessed both by the UK government and European Union, we must not lose sight of the fact that we have significant challenges to replace retiring electricity generation plant, to improve our energy security and to reduce carbon emissions, and that has not changed as a result of the referendum."

Meanwhile, more than 1,000 clean-energy exploration jobs may be lost because of Brexit, according to Professor Steve Cowley, CEO of the UK Atomic Energy Authority. He told the BBC he was "very concerned" by the implications Brexit would have on funding research programmes. Researchers are afraid, he said, that GBP55m in annual European Commission funding would be withdrawn.

The Joint European Torus (JET) at Culham investigates the potential of fusion power as a safe, clean, and virtually limitless energy source for future generations. The largest tokamak in the world, it is the only operational fusion experiment capable of producing fusion energy. As a joint venture, JET is collectively used by more than 40 European laboratories.

Cowley said the UK could lose the expertise of the staff at Culham. "If we should lose our European funding, the lab would have to shrink to a tiny size and the jobs would go and the expertise would move to other countries [...] and we would have lost our edge in a future technology that's very, very important," he told the BBC. "After [Brexit] we will lose our influence, we will lose our capability to argue for it, and eventually the EU will put the experiments in this area of science in other places," he added.



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