Nuclear Politics

UK Small Nuclear Should Get Same Support As Wind And Solar, Says Independent Report

By David Dalton
8 August 2018

8 Aug (NucNet): Private finance will not come forward to develop first-of-a-kind small nuclear projects without government support similar to that offered in the past for wind and solar, an independent finance working group appointed by the government has concluded.

The Expert Finance Working Group on Small Reactors said in a report published today that technologies such as wind and solar have been supported through government assistance for both the development projects themselves and the UK supply chain.

This has resulted in the government’s success around wind and solar with a supply chain being developed, cost reductions for the projects resulting in lower prices to consumers, and the establishment of a market that the finance market can understand and participate in. “Nuclear should be no different,” the report said.

The report noted that the government’s success in supporting offshore wind has brought down the contract for difference (CfD) strike price from £150/MWh for the first round of projects to £57/MWh in the latest round.

The strike price negotiated for the Hinkley Point C nuclear plant under development in the UK by EDF was £92.50/MWh.

CfDs are said to offer developers greater certainty and stability of revenues, reflecting the cost of investing in low-carbon technologies, by setting a price for every MWh of electricity produced for a set period.

Many of the report’s recommendations centre around creating the best market conditions for private sector investment and establishing the market for small reactors.

“It should be remembered that in the early stages of wind projects they were funded 100% by strategic equity, from investment grade rated corporations, particularly during the construction period,” the report said.

It said the government should bring together nuclear vendors, utilities and developers with the finance sector to collaborate in small nuclear projects.

Some of the barriers to small nuclear which the government can assist with are relatively straightforward – making sites and generic design assessment slots available. Some require the same support that any industry needs to bring innovation forward. “Others are more fundamental around a lack of understanding around nuclear and the need to get the first projects across the line to create the market,” the report said.

The report is online: https://bit.ly/2M9Jb5N

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