The UK on 19 October published its Net Zero Strategy – Build Back Greener — setting out how the UK will deliver on its commitment to reach net zero emissions by 2050. It also provides plans for how the UK will secure 440,000 well-paid jobs in green industries and unlock £90 billion in private investment by 2030 while reducing the risk of high and volatile prices in the future, and strengthening our energy security.
“This will provide certainty to businesses to support the UK in gaining a competitive edge in the latest low carbon technologies – from heat pumps to electric vehicles – and in developing thriving green industries in our industrial heartlands – from carbon capture to hydrogen, backed by new funding, according to the government press release.
As part of the strategy, new investment announced includes:
- An extra £350 million to support the electrification of UK vehicles and their supply chains and another GBP620 million for targeted electric vehicle grants and infrastructure;
- Kick-starting the commercialisation of sustainable aviation fuel (SAF) made from sustainable materials such as everyday household waste, flue gases from industry, carbon captured from the atmosphere and excess electricity, which produce over 70% fewer carbon emissions than traditional jet fuel on a lifecycle basis. The aim is to enable the delivery of 10% SAF by 2030 by supporting UK industry with £180 million in funding to support the development of UK SAF plants;
- A £140 million Industrial and Hydrogen Revenue Support scheme to accelerate industrial carbon capture and hydrogen, bridging the gap between industrial energy costs from gas and hydrogen to support green hydrogen projects;
- An extra £500 million towards innovation projects to develop the green technologies of the future, bringing the total funding for net zero research and innovation to at least £1.5 billion. This will support the most pioneering ideas and technologies;
- £3.9 billion of new funding for decarbonising heat and buildings, including the new £450 million three-year Boiler Upgrade Scheme;
- £124 million boost to the Nature for Climate Fund helping to meet commitments to restore approximately 280,000 hectares of peat in England by 2050 and treble woodland creation in England to meet commitments to create at least 30,000 hectares of woodland a year across the UK; and
- £120 million towards the development of nuclear projects through the Future Nuclear Enabling Fund. The fund will help in "retaining options for future nuclear technologies, including small modular reactors”, with a number of potential sites including Wylfa in North Wales. “Funding like this could support our path to decarbonising the UK’s electricity system fifteen years earlier from 2050 to 2035. Further details of how this fund will operate will be published in 2022 alongside details of a roadmap for deployment that takes into account value for money."
Detail on plans for nuclear
The 368-page report itself does not include much about plans for nuclear. “The net zero economy will be underpinned by cheap clean electricity, made in Britain,” it says. “A clean, reliable power system is the foundation of a productive net zero economy as we electrify other sectors – so we will fully decarbonise our power system by 2035, subject to security of supply. Our power system will consist of abundant, cheap British renewables, cutting edge new nuclear power stations, and be underpinned by flexibility including storage, gas with CCS, hydrogen and ensure reliable power is always there at the flick of a switch. The transformation of the power sector will bring high skill, high wage job opportunities right across the UK.”
By 2035 the UK will be powered entirely by clean electricity, subject to security of supply, the report notes. One of the key policies listed there is to: “Secure a final investment decision on a large-scale nuclear plant by the end of this Parliament, and launch a new £120 million Future Nuclear Enabling Fund, retaining options for future nuclear technologies, including Small Modular Reactors, with a number of potential sites including Wylfa in North Wales.”
The report says that, “in the past year, we have already taken important action on climate change, delivering on the commitments in the Prime Minister’s Ten Point Plan”. With respect to nuclear, it recalls that the government committed to delivering new and advanced nuclear power, including:
- Pursuing large-scale nuclear projects, subject to value for money;
- Legislating for a new financing model for nuclear projects;
- A £385 million Advanced Nuclear Fund to enable up to GBP215 million for Small Modular Reactors; and
- £170 million for a R&D programme on Advanced Modular Reactors.
Since then, the report notes, the government has:
“Announced our aim to bring at least one large-scale nuclear project to the point of Final Investment Decision by the end of this Parliament, subject to value for money and all relevant approvals. Entered into negotiations with the developer of Sizewell C power station in December 2020.
Launched a Call for Evidence on Government’s preference to explore the potential of High Temperature Gas Reactors (HTGRs) to enable an AMR demonstration by the early 2030s.”
The only detailed mention of nuclear is in the Power section (10 pages) of Chapter 3 on “Reducing Emissions across the Economy”. It constitutes just one of 14 listed key commitments, to “Secure a final investment decision on a large-scale nuclear plant by the end of this Parliament whilst taking measures to inform investment decisions during the next Parliament on further nuclear projects as we work towards our net zero target.”
There are 43 numbered paragraphs in the section. Nuclear is mentioned in paragraph 2 (subsection “Progress to date”) as follows:
“On delivering new and advanced nuclear power, we have committed to reaching a final investment decision on a large-scale nuclear plant this parliament, subject to value for money and approvals. We are in negotiations with the developer on Sizewell C project in Suffolk. We have since taken further steps.”
Nuclear is the subject of three small paragraphs in the sub-section “Policies and proposals”:
38. We also need to increase our nuclear capacity, which is why we said in the Energy White Paper that we will aim to bring at least one large-scale nuclear project to the point of final investment decision by the end of this Parliament, subject to clear value for money and all relevant approvals. In December 2020 we announced the start of formal negotiations on Sizewell C and those negotiations are ongoing. To facilitate a decision this Parliament, we plan to establish the Regulated Asset Base model to fund new nuclear projects at a low cost of capital, saving consumers money.
39. The government will also take measures to inform investment decisions during the next Parliament on further nuclear projects as we work towards our net zero target. This will include consideration of large-scale and advanced nuclear technologies, including Small Modular Reactors (SMRs) and potentially Advanced Modular Reactors (AMRs). As part of this, we are announcing a new £120 million Future Nuclear Enabling Fund to provide targeted support in relation to barriers to entry. Further details of how this fund will operate will be published in 2022 alongside details of a roadmap for deployment that takes into account value for money.
40. We are also providing funding for a SMR design through our £385m Advanced Nuclear Fund and are progressing plans for an Advanced Modular Reactor demonstrator in the early 2030s. Whether large- or small-scale projects, there remain a number of possible sites available for these options, including Wylfa in North Wales.
Industry reaction
The strategy was, nevertheless, enthusiastically received by the nuclear industry. Nuclear Industry Association Chief Executive Tom Greatrex said: "It is very welcome to see the government commit new money to the development of nuclear projects and set out its intention to bring Sizewell C to a Final Investment Decision. We need to invest quickly to clean up the grid by 2035 and ensure our energy security, so we look forward to seeing details of this new fund, money for SMR deployment and legislation for Regulated Asset Base financing coming forward soon."
A US consortium led by Westinghouse and Bechtel immediately released a statement that was widely reported by the Welsh media. It noted: “We welcome the publication of the Government’s net zero strategy today and are pleased to see that nuclear power features prominently throughout the proposal as an intrinsic part of achieving the UK’s net-zero goals.
"The potential for the Wylfa site to play a key role in the solution, as mentioned in the net-zero strategy document, is notable as it signals the Government’s recognition of the widely accepted opinion that Wylfa is the best site in the UK for a large-scale nuclear power plant.
"We urge the government to act now and commit to developing the world’s most advanced nuclear technology, the AP1000, at the Wylfa site. This not only has the potential to deliver power to four million homes before 2035 but will also facilitate the future development and construction of SMR and AMR technology in the UK, making it a first mover in the industry.
"The construction of the AP1000 at the Wylfa site will significantly contribute to the UK’s levelling-up agenda and the Prime Minister’s desire to create a ‘high-wage, high-skilled, high-productivity economy’ by creating tens of thousands of jobs and fostering a strong indigenous workforce for generations to come.
In Wales, Ynys Mon MP Virginia Crosbie said: "I have constantly made the case that Wylfa Newydd is the best location for new Small Modular Reactors (SMR) in the country and the fact the site is singled out in the strategy is very good news. "This is why I have been working hard to bring investment to the island through world-leading companies like Westinghouse, Bechtel and Rolls-Royce which have all visited over the past few months.”
