Nuclear Politics

UK / Government Announces Net Zero Strategy That Includes Large-Scale Nuclear And New Reactor Technologies

By David Dalton
19 October 2021

Ambitious target says country will be powered entirely by clean electricity by 2035 ‘subject to security of supply’
Government Announces Net Zero Strategy That Includes Large-Scale Nuclear And New Reactor Technologies
Two EPR plants at Hinkley Point C are the only commercial nuclear reactors under construction in the UK. Courtesy EDF Energy.
The UK will secure a final investment decision on a large-scale nuclear plant by the end of this parliament – potentially in 2024 if a general election is called – and launch a new £120m ‘Future Nuclear Enabling Fund’ with options for future nuclear technologies including small modular reactors.

In a net zero strategy the government said the new fund will provide targeted support for the development and deployment of new reactor technologies. Details of the fund will be announced in 2022, along with a roadmap for deployment.

The strategy says the government will also take measures to finalise investment decisions during the next parliament on further nuclear projects.

It says the UK will be powered entirely by clean electricity by 2035, subject to security of supply, with most of its electricity coming from the wind farms of the North Sea or state-of-the-art British nuclear reactors. This will “reduce the country’s vulnerability to sudden price rises caused by fluctuating international fossil fuel markets”.

There are a number of potential sites for new reactors, both large and small-scale being considered, including Wylfa in North Wales.

Hitachi subsidiary Horizon was planning to build two UK advanced boiling water reactor units at Wylfa, but announced earlier this year it had officially withdrawn its application for planning permission for the construction and operation of the station and associated infrastructure, citing problems with financing.

The strategy confirms that the UK will legislate for a new financing model for nuclear projects. This is a reference to the regulated asset base (RAB) model, which encourages investment in major infrastructure projects by delivering reliable returns, at a reduced rate, before a plant is operational. Legislation on RAB funding is due to progress through parliament in the coming weeks.

The government began negotiations with France’s state-owned EDF, the developer of Sizewell C power station, in December 2020.

The government has also launched a call for evidence on plans to explore the potential of high temperature gas reactors (HTGRs) to enable a demonstration plant by the early 2030s.

Earlier this month, the government announced five sites that have been shortlisted as the potential future home of the UK’s first prototype fusion energy plant – the Spherical Tokamak for Energy Production, or Step – with a final decision to be made around the end of 2022 and operation scheduled for the early 2040s.

The government has already committed £385m to an advanced nuclear fund with £215m of that for SMRs. It has allocated the remaining £170m for an R&D programme on advanced reactors.

The nuclear industry welcomed the net zero strategy, saying it was pleased to see the government commit new money to the development of nuclear projects and set out its intention to bring Sizewell C to a final investment decision.

Tom Greatrex chief executive of the London-based Nuclear Industry Association, said: “We need to invest quickly to clean up the grid by 2035 and ensure our energy security, so we look forward to seeing details of this new fund, money for SMR deployment and legislation for regulated asset base financing coming forward soon.”

EDF has been lobbying intensively for a RAB mechanism, arguing that it could slash the “strike price” – the guaranteed price for Sizewell’s electricity – to between £30 and £60 per megawatt hour. Hinkley Point C’s £92.50/MWh strike price has been criticised as excessive at a time when offshore wind costs are falling.

Two EPR units under construction at Hinkley Point C are the only commercial nuclear plants being built in the UK. Sizewell C is the only new-build project in the country for which planning permission is being sought.

Three projects – Wylfa, Moorside and Oldbury – have either been cancelled or shelved, largely because of financing problems, while Bradwell remains in the early technical stages.

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