Nuclear Politics

UK Government Should Invest In Nuclear Projects And Develop Local Supply Chains, Says Report

By Kamen Kraev
2 November 2017

2 Nov (NucNet): The UK government should consider taking a “significant equity stake” in future nuclear new-build projects in the country, said a report by the independent Industrial Strategy Commission (ISC), a joint initiative by the University of Manchester and the Sheffield Political Economy Research Institute. The ISC, which was set up as an inquiry into the development of a new, long-term industrial strategy for the UK, said the government should develop supply chains for the UK nuclear industry to make sure that UK businesses are able to supply a higher proportion of the highest value components for new nuclear projects. According to the report, the need to replace existing nuclear units is a “most pressing problem” for the UK, because 7.7 GW of the existing 8.9 GW of nuclear capacity will be retired by 2030. The ISC said that plans currently exist to build up to 16 GW of new nuclear capacity, including 3.2 GW at Hinkley Point C, at a total capital cost of at least £60bn (€68bn, $79bn). The new-build programme is an “ideal” case study of the way energy policy and industrial policy have been connected in the past, and should be connected better in the future, the report said. According to the ISC, the idea that the government should not directly fund or subsidise nuclear projects has greatly reduced the government’s leverage over the nuclear programme. However, the government still remained financially exposed through loan guarantees and through contract for difference schemes, indirectly guaranteeing long-term revenue flows through commitments to the price consumers and industry will pay for electricity. The ISC also said that most of the developers and all the technology vendors involved in the proposed new-build projects are based overseas and are partially owned by foreign governments. This weakens the UK industry’s ability to develop local supply chains, despite the fact that the projects will involve large contracts with UK suppliers, the ISC said. The report is online: http://bit.ly/2h6hFZp

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