4 Mar (NucNet): The UK government needs a “plan B” on nuclear power because of the danger that new reactors will not be built in time to avoid energy shortages and possible blackouts, an influential committee of MPs has warned.
A series of obstacles could mean the government’s target of 16 gigawatts of new nuclear power by 2025 is not met, according to a report from the House of Commons energy and climate change select committee. The report warns that if new plants do not materialise it could be “much more expensive” to meet Britain’s legally-binding climate change targets, and could leave the country more dependent on imported gas to keep the lights on.
Tim Yeo, the committee’s chairman, said ministers must “urgently come up with a contingency plan in case the nuclear industry does not deliver the new power stations we need”.
He said: “The government seems to be crossing its fingers that private companies will deliver a fleet of new nuclear power stations on time and on budget.”
The committee also criticises the lack of transparency in government talks with EDF Energy over possible subsidies to build Britain’s first new nuclear plant in a generation at Hinkley Point in Somerset, and warns that “new nuclear should not be delivered if the price is too high”.
With all but one of Britain’s 16 commercially operational nuclear reactors due to close by 2023, new plants are “crucial” if nuclear power is to remain part of the UK’s energy mix in future decades, the report says.
However the MPs heard evidence that the government’s 16GW target – a plan that would see new reactors at five sites around the UK – was “ambitious” at best and “unrealistic” at worst.
Mr Yeo told BBC Radio 4’s ‘Today’ programme that “to get the first [nuclear] power stations built at [Hinkley Point], I believe the government should pay a reasonable price”.
EDF Energy chief executive officer Vincent de Rivaz said in December 2012 that a final investment decision on whether or not to build new nuclear reactors at Hinkley Point will be taken in 2013.
He said reforms to the UK’s electricity market including the introduction of contracts for difference (CfDs) are essential for EDF Energy to be able to make a long-term commitment to building two European Pressurised Water Reactors at Hinkley Point.
The report supports the government’s use of CfDs to help make new nuclear power stations easier to finance, but says MPs are concerned at the lack of transparency around the price negotiations between the government and industry.
The report says the new contracts must provide value for money for consumers and should not be offered at a price that is higher than other low-carbon sources of energy, such as offshore wind, which is hoped to be around £100/MWh (about 150 US dollars, 115 euro) by 2020.
Mr Yeo said unlike gas-fired power stations, nuclear power stations are expensive to build but cheap to operate. He said it is right that investors should be given confidence that they will recoup their money by providing them with long-term contracts.
He said: “But at the same time, long-term price guarantees for new nuclear power stations need to deliver value for money to consumers. Locking consumers into paying prices for nuclear power that are unacceptably higher than prices paid to renewables or carbon capture and storage projects would be wrong.”
Mr Yeo said it is “disappointing” that there is still so little transparency about ongoing negotiations between the government and developers of new nuclear power stations.
Apart from EDF Energy, there are two companies hoping to build new nuclear plants in the UK.
Hitachi, which last year took over the Horizon nuclear venture from German utilities RWE and E.ON, owns two sites – one at Wylfa in Anglesey and the other at Oldbury in Gloucestershire – and says it plans to build two to three 1,300 megawatt nuclear reactor units at each.
NuGen, a joint venture between France’s GDF Suez and Spain’s Iberdrola, is preparing plans for 3,600 MW of new nuclear near the existing Sellafield nuclear site in Cumbria, northwest England. NuGen says detailed plans for developing the site will be submitted to the planning authorities with the aim of making a final investment decision around 2015.
In May 2012, the International Energy Agency said the UK government’s policy that financing for new nuclear reactors has to come from the private sector, including the full costs of decommissioning and their full share of waste management costs, has made it “a widely watched laboratory for the development of nuclear power in a market economy”.
The report is online:
www.parliament.uk/business/committees/committees-a-z/commons-select/energy-and-climate-change-committee/news/building-new-nuclear-the-challenges-ahead
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