Making Great British Nuclear a success story
EDF staff in the turbine hall at Sizewell B
Matt Sykes, Managing Director – Generation
Nuclear power provides secure, low carbon, affordable energy and cuts reliance on gas.
When I joined the electricity industry in the late 1970s the country was dealing with the last major energy crisis. Back then it was caused by oil market instability, this time it is about high and volatile gas prices. The UK is particularly exposed because we burn a lot of gas in our boilers to heat our homes and the country’s gas-fired power stations set the price of electricity.
Over the last 40 years I have worked across coal, gas and nuclear power operations and all of them have brought substantial benefits to the economy and living standards. Coal and nuclear dominated UK electricity production until the 1990s; now it is gas with support from renewables, nuclear and imports from Europe. The future is about more renewables, more nuclear and gas with less impact.
As Managing Director of EDF’s Generation business my main role is to oversee the UK’s fleet of eight nuclear power stations, five of which are still generating and have the capacity to produce over 5,500MW when fully operational. This year the fleet will generate around 13% of UK demand.
Those that follow the sector closely know that this share is falling, due to older stations retiring, and will drop further in the next few years. Output peaked in 2016 at 65TWh and by 2028 (excluding Hinkley Point C) is forecast to be down to just 10TWh, from one station alone – Sizewell B. Output will start to recover once HPC starts generating and, if the Government’s policy commitments are financed and delivered, then the share could be back up to 20% again from the mid-2030s.
Investing to help short-term energy security
In the next few years, our focus within the existing fleet is to secure as much output as we safely can from the UK’s four generating Advanced Gas-cooled Reactor (AGR) stations, make a case to extend output at Sizewell B by 20 years (out to 2055) and explore options for hosting new nuclear technologies at Hartlepool and at Heysham in Lancashire.
To underpin reliable output we will invest £1billion during 2023-25 and this will help bolster the UK’s security of supply and limit gas imports and carbon emissions. In the coming months we will also review the potential to extend output at Hartlepool and Heysham 1 power stations beyond the current forecast of March 2024. It may be possible to generate at these two stations a little longer, but we will only do this if we are fully confident that it is safe to do so and it has the support of Government and the independent regulator.
Stable and affordable prices
I am not here to do a ‘hard sell’ on nuclear – the case is being made by the consequences of being so dependent on gas, the growing and very visible impacts of climate change and the need for secure, sovereign sources of clean power.
One point often overlooked in the debate is the price stability associated with nuclear power. The industry’s conservative business model is founded on long term, predictable returns - to pay for the upfront construction costs, as well as operating expenses. This is why most of the power from the nuclear fleet is sold in advance, to provide that stability.
This year’s output from the UK nuclear fleet was sold prior to the energy crisis, at a level substantially below current and predicted wholesale prices. Next year it will be slightly higher but still much cheaper than the market overall. Price stability is good for nuclear and good for consumers, and so EDF is responding constructively to the Government’s request to explore options for a new, more sustainable pricing model.
Re-building our nuclear skills capability
I would like to finish on the topic of people and skills. A top priority is to ensure we have the required focus on re-building the nuclear capabilities the UK needs to deliver its ambitions. Alongside developing HPC, and plans for a replica project at Sizewell C, EDF will play its part by keeping the AGR fleet generating for as long as it can, carefully defueling it over the next decade and maximising the value of Sizewell B. This will keep thousands of people engaged in operational activity while the Government sets direction for the industry’s future. We will continue to offer apprenticeships, graduate opportunities and high quality training. This year we are investing £40million in training our nuclear workforce and next year plan to hire up to 200 people to join our generation business.
However, many organisations - including EDF - will need to play an ever more active role in developing nuclear skills. Real urgency is required from Government to direct which nuclear technologies should be developed at each of the eight designated UK sites, outline how this will be funded and who is responsible for what.
This direction will give more certainty to operators, developers, the supply chain and educational establishments - and provide a solid base from which to help develop the skills necessary to re-build the industry. The energy security strategy announced in April set the high-level policy framework, now we need direction on the detail (what I call the “landing gear”), so we can help set Great British Nuclear up for success.
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