Poor nuclear prospects in UK

November 25, 2023, Renew Extra Weekly

The Global Warming Policy Foundation, no stranger to controversy, has published a report on nuclear prospects, which is quite damning, with the GWPF claiming that it shows that the nuclear industry is now so dysfunctional it may have no future in the UK without a concerted policy and regulatory effort. The report’s author, energy consultant and Daily Telegraph columnist Kathryn Porter, says ‘most of our existing nuclear fleet will close in the next few years, with almost nothing to replace it, and I see little cause for optimism that the economic or regulatory environment will produce significant new capacity any time soon.’………………

In the report, Porter goes through the technical options in a quite neutral way, but warns that, at present, ‘the economic opportunities for nuclear power in Great Britain are mixed. The Government hopes that the new Regulated Asset Base model will attract investor interest by increasing income certainty and transferring some risks to consumers. However, Ofgem has been designated as the economic regulator in this area, and its track record in setting consistent and effective price controls for gas and electricity network operators has been mixed. It is now under significant pressure to contain energy company profits, which may make nuclear developers nervous about the model and how it may operate in practice’.

So she is concerned about funding. ………………………………..

Prof. Malcolm Grimson from Imperial College London focused more on the economics: ‘The paper is rightly very clear that the economic risks of nuclear power – in short, that compared to other power options, much more of the cost of nuclear generation is front-loaded in the construction phase, so managing risks of cost or schedule overruns is a practically insuperable task for private capital – are such that heavy state involvement, probably up to and including direct state investment in new nuclear construction, is unavoidable.’

He added ‘The paper is also probably right in saying that the CfD/strike price structure which was created to fund Hinkley Point C probably will not be repeated……………………..

It will be interesting to see how the government (and the nuclear industry) responds to Porters analysis of funding and energy pricing policy, and especially to the point that, given the zero fuel costs of renewable, but also their operational costs, ‘determining the optimal generation mix of nuclear and renewable energy when taking the full costs to consumers into account is challenging’………………………..

she backs off talking about nationalisation,……………………… https://renewextraweekly.blogspot.com/2023/11/poor-nuclear-prospects.html