UK government changes its stance on nuclear development

30 November 2020

The UK Treasury has released two documents relevant to future UK policy on nuclear power development.

The 43-page “Response to the National Infrastructure Assessment” includes comments on 64 recommendations made in the National Infrastructure Commission’s (NIC’s) National Infrastructure Assessment (NIA) report published in 2018.

The 99-page “National Infrastructure Strategy Fairer, faster, greener” sets out the government’s long-term infrastructure ambitions.  It “represents the first step of a multi-year process to transform the UK’s infrastructure networks” and will be followed by “a series of detailed publications setting out further details on key areas of infrastructure”.

The NIA recommendations covered a wide range of areas - building a digital society; low cost, low carbon; revolutionising road transport; transport and housing for thriving city regions; reducing the risks of drought and flooding; choosing and designing infrastructure; and funding and financing. In its response to the NIA, the Treasury noted that significant progress had been made against the recommendations, and that the government “is partially or fully endorsing over 80% of the recommendations”.

Of most relevance to the nuclear industry is the low cost, low carbon section and in particular, recommendation 14: “The government should not agree support for more than one nuclear power station beyond Hinkley Point C, before 2025.” The Treasury does not endorse this response although it “agrees with the NIC’s assessment of the importance of developing a flexible electricity system and the significant role of renewable generation in delivering a low cost, stable, reliable and low carbon electricity system”.

It also “recognises the NIC’s view that a large degree of uncertainty remains which affects what the optimal mix of electricity generation technologies might be in 2050”. It notes: “Since the NIC assessment was published, the government has legislated for a target of net zero greenhouse gas emissions by 2050. This is likely to result in a significant increase in electricity demand and require the power sector to reach low levels of carbon emissions. In turn, these factors further affect electricity system requirements to decarbonise at lowest cost, including the necessary sources of generation.”

It adds: “This uncertainty means it is important to maintain options by pursuing additional large-scale nuclear projects, subject to clear value for money for both consumers and taxpayers and all relevant approvals.” It says further details of the government’s nuclear strategy will follow in a forthcoming Energy White Paper. “The government will consider the relative needs of the system and the value of new and alternative technologies in delivering a low-cost, low carbon andreliable electricity system.”

To this end, “the government believes that carbon capture and storage technology is likely to have a critical role to play across the UK economy, including alongside nuclear to deliver a system with these characteristics”. The government recognises the strategic need to bring forward low carbon power in a way which protects consumers and taxpayers, and which will contribute to decarbonisation of the power sector at low cost. “The government consulted on new models for financing new nuclear projects and carbon capture and storage projects in summer 2019. A response on carbon capture and storage projects was published in August 2020, and a response for financing new nuclear power will follow in due course.

The Treasury report basically endorses recommendations 16 and 17, which relate to hydrogen. However, it notes: “A mixture of different production technologies will be required to deliver the level of hydrogen demand anticipated for 2050. The government is looking at progressing the development of new low carbon hydrogen production methods through a twin track approach to bring forward both electrolytic hydrogen from renewables and carbon capture and storage (CCS)-enabled hydrogen.

Nuclear is also considered in Chapter 3 of the National Strategy,  “Decarbonising the economy and adapting to climate change”. The report notes: “Nuclear power has long played an important role in UK power generation and will continue to do so provided it can be delivered to time and budget.” It says construction of Hinkley Point C has continued despite problems resulting from the COVID-19 pandemic. “Nuclear is a proven, value-for-money source of reliable low carbon power which can complement renewables. The government is pursuing large-scale nuclear projects, subject to clear value for money for both consumers and taxpayers and all relevant approvals, with further details to follow in the Energy White Paper.”

As outlined in the recent Ten Point Plan for a Green Industrial Revolution, the government will provide up to £525 million ($699m) to bring forward large-scale nuclear and invest in the development of advanced nuclear R&D, including up to £385 million in an Advanced Nuclear Fund for small modular reactors and advanced modular reactors. This is alongside £220 million for nuclear fusion.

“Last year, the government consulted on a nuclear Regulated Asset Base (RAB),” the report notes. “The government is considering the responses to this consultation and expects to publish a response in due course. Alongside considering the RAB model the government will also continue to consider the potential role of government finance during construction, provided there is clear value for money for consumers and taxpayers.”

In a press release on 25 November, the UK  Nuclear Industry Association (NIA) CEO Tom Greatrex said: “Meeting net zero by 2050 is incompatible with the flawed analysis offered by the National Infrastructure Commission.... Nuclear alongside other low carbon technologies will be required to decarbonise, and it was never a sound position to suggest otherwise. The focus now must be on delivering the infrastructure required to meet net zero – and avoiding wasting further time, effort and attention in seeking to pit low carbon technologies against each other.”


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