Labour backs nuclear – but at what cost?

for the UK consumer, nuclear new building means expensive electricity and offers little in terms of addressing climate change.

With new funding announced for the prospective Sizewell C plant, the government seems committed to nuclear power.

However, the cost of nuclear newbuild in the UK is staggering and,
even if built, sufficient new capacity will not arrive soon enough to help
mitigate climate change.

UK electricity consumers should hope that the
target of 24 GW of nuclear capacity by 2050 slips into obscurity. “We
will ensure the long-term security of the sector, extend the lifetime of
existing plants, and we will get Hinkley Point C over the line.” That was
Labour’s manifesto commitment to nuclear power, and the government has
already put money on the line.

In late August, it announced additional
funding of up to £5.5 billion for the proposed Sizewell C plant, which
would be only the UK’s second nuclear construction project since the
completion of Sizewell B in 1995, if built.

However, for the UK consumer, nuclear new building means expensive electricity and offers little in terms of addressing climate change. The UK’s operable nuclear capacity declined
from 12.2 GW in 1996 to 5.8 GW in 2023. Only nine reactors are still
generating power and two are under construction. Eight of the operable
reactors came online between 1983 and 1989, making the youngest 45 years
old. Last year, the Hartlepool and Heysham 1 plants gained modest life
extensions to 2026, and operator EdF hopes to extend the lives of its other
Advanced Gas Cooled (AGRs) reactors to 2028.

However, there is little likelihood that the eight remaining AGRs can continue in service beyond these dates. They were initially designed to last about 30 years, with the
decision to decommission based on the deterioration of irreplaceable
components such as the graphite core and boilers. Three AGRs – two built
in 1976 and one in 1983 – are already defueling, a preliminary step to
decommissioning. As a result, by 2030 at the latest, all of the UK’s AGRs
will be out of service.

Decommissioning costs the consumer money, and the
Nuclear Liabilities Fund has not kept up with the cost of decommissioning.
In its third report of 2022-23, the House of Commons Committee of Public
Accounts noted that the government had already been forced to provide
additional funding of £10.7 billion and that there remained “a strong
likelihood that more taxpayers’ money will be required”.

In addition, despite the first nuclear reactors coming into service in the 1950s, there
is still no clear plan for the permanent storage of the most hazardous
forms of radioactive waste.

The government’s most recent energy and
emissions projections, published in November 2023, forecast the
volume-weighted wholesale electricity price in 2030 at between £36.6/MWh,
in a low fuel price scenario, and £58.5/MWh in a high fuel price scenario.
The UK’s latest licensing round for renewable energy, the results of
which were announced in September, returned CfD prices for solar projects
of £50.07/MWh, onshore wind at £50.90/MWh and offshore wind at
£58.87/MWh (2012 prices).

At over £100/MWh in today’s money, even
without a further five years of inflation, Hinkley Point C is a chronic
deal for the UK electricity consumers. EdF wants a new funding model for
both the construction of Sizewell C and the lifetime extension of Sizewell
B, indicating that even the large CfD strike price for Hinkley Point C is
not enough to build new nuclear in the UK. This will almost certainly mean
UK consumers bearing more of the risk. The adoption of the proposed
Regulated Asset Base (RAB) model would see consumers paying for nuclear
plants years before they actually generate electricity.

Energy Voice 18th Sept 2024.