Nuclear Power: The Role of Government
In 2006, Prime Minister Tony Blair assured Britain that nuclear was “back on the agenda with a vengeance”. Boris Johnson has described his commitment to deliver nuclear at “warp speed”, and the three intervening Prime Ministers have also emphasised their support for nuclear. Yet Britain’s first new nuclear plant – Hinkley Point C (HPC) – is still some years from operation and, despite recent progress at Sizewell C, there is no confirmed successor project. Academics from The University of Manchester’s Dalton Nuclear Institute, Adrian Bull and Will Bodel, examine the gap between intention and reality and highlight policy recommendations from a new paper by the Dalton Nuclear Policy Group.
Government needs to lead if nuclear is to play its part in hitting Net Zero.
But cost is an issue – conventional reactors like Hinkley Point (HPC) are so expensive that even state-backed EDF didn’t have deep enough pockets to invest without bringing in Chinese partners to take a 1/3 stake. The countries who delivered extensive and rapid rollout of nuclear have all had energy markets which were state-run, and regard the supply of safe, secure electricity as a strategic imperative rather than leaving it to a fickle and uncertain market.
Government’s desire to let markets deliver – but then intervene or backtrack – reduces confidence for investors and the supply chain. Some well-intentioned interventions include:
- The contracts for difference model (used to finance HPC). This was followed by an eventual U-turn on Chinese participation beyond HPC and then adoption of the Regulated Asset Base (RAB) financing model.
- A high-profile competition launched in 2016 by the Department of Energy and Climate Change for the best future small modular reactor (SMR) designs, as part of a £250m investment in an ambitious nuclear research and development programme. This was subsequently downgraded to a consultation, then in February 2022 reissued as an Advanced Modular Reactor (AMR) research, development and demonstration competition.
Free and open competition works well – but takes time and can’t really solve the intertwined crises we currently face of medium-term energy security and longer-term climate preservation. Sometimes a “command and control” approach, putting speed ahead of perfect outcomes, is needed – such as government’s response to the pandemic.
Other factors include very long timescales for delivery of new plants – meaning longer before investors see returns on their money; planning delays; and public opposition if not well handled. Positions on nuclear and its priority for government oscillate, both with changes in leadership and with the other demands facing Whitehall. Brexit, COVID and the current war in Ukraine have, understandably, soaked up precious resources over recent years. All leading to a shaky perception among investors and developers of political commitment and the associated risk.
Perhaps the greatest challenge though is that different aspects of government’s complex role in nuclear sit across Whitehall and are addressed separately. Delivery of new GW-scale nuclear falls under BEIS, whilst longer term innovation on new reactors such as SMRs and AMRs and links with heat and hydrogen supply are elsewhere in BEIS. Then developing the supply chain and value to UK businesses are in yet another area of BEIS. Regulation comes under Work and Pensions. Siting – many prospective sites owned by government-owned NDA. Financing government support is Treasury, while the role of nuclear in levelling up is handled by Communities and Local Government. Suitability of international partners is assessed by the Foreign Office and national security implications through – for example – cyber-risk is Home Office.
With the promised establishment of Great British Nuclear (GBN), government has an opportunity (perhaps its last, if nuclear is to underpin its 2050 Net Zero target, as research shows it can) to catalyse the UK’s nuclear programme via a co-ordinated series of measures, accelerating delivery by picking a course and moving at pace, giving confidence to others to do likewise. This might be the only way to achieve a meaningful fleet of identical units (or multiple fleets, perhaps one for GW-scale plants and others for SMRs and AMRs), and thus bring the benefits – demonstrated elsewhere – from such series build, specifically reduced cost and timescales for developers and repeat business for the supply chain.
Nearer-term specific measures government could usefully take include:
- Establishing GBN with a suitable remit and the power to act across Whitehall, removing blockages and applying appropriate incentives.
- Financial support to encourage series reactor build – encouraging potential first movers, and incentivising subsequent investors to maximise the speed and effectiveness of delivery.
- Widening the scope of financial incentives, potentially on offer to communities which might host onshore wind, to include all low carbon generation – making community engagement a dialogue, not a plea to accept an unknown and largely unwanted technology.
Miss this chance, and the much-anticipated GBN simply becomes another talking shop developing options for endless government review. Then those investors and developers who might have invested in the UK will head abroad, and the opportunity is gone, leaving us with an energy landscape almost impossible to decarbonise.
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