Tom Greatrex / What We Have Been Warning Of For A Very Long Time Has Happened

By Kamen Kraev
11 October 2021

Country needs about 30 GW of new nuclear and a fleet of SMRs, says NIA head
What We Have Been Warning Of For A Very Long Time Has Happened
Tom Greatrex: ‘To get to net zero and a decarbonised power supply, in the UK we need four times the amount of clean power that we currently have.’ Courtesy NIA.
The energy crisis in the UK has led to renewed calls for more reactors. NucNet asked Tom Greatrex, head of the London-based Nuclear Industry Association, about the role nuclear can play in a market hit by rising prices and facing the imminent shutdown of ageing plants.

  • Lower supply, higher demand, and poor wind performance led to record increases in power spot prices
  • The UK nuclear reactor fleet will almost entirely shut down by 2030, curbing low-carbon generation capacity
  • There has been a positive shift in opinions of the role nuclear can play
  • At least 10 GW of new nuclear needed by mid-2030s in the UK, and possibly an additional 20 GW to meet net-zero in 2050

NucNet: The Nuclear Industry Association has been warning policymakers about the risks of energy supply based largely on renewables and natural gas. Power prices in Europe have increased to unsustainably high levels in recent months, sparking an energy crisis in many countries, especially the UK. Perhaps you can tell us why this has happened?

Tom Greatrex: What we have been warning of for a very long time has happened in the UK and it will continue to affect us, at least for this winter and quite possibly well beyond. Over the last few months, we’ve had relatively low output from wind power. The UK has got quite a lot of wind-powered installed capacity, but its variability has really shown itself over the past few months.

At the same time, a power interconnector between the UK and France caught fire and reduced the electricity imports coming from France.

We have also had the impact of higher demand, or lower output, or a combination of both, for gas in Europe and this has caused prices to go up. And we haven’t yet managed to significantly break the link between traded gas prices and electricity prices in the UK, because we are overly reliant on burning fossil fuels imported into the UK for our electricity, particularly at times when the weather isn’t optimum for the delivery of wind or solar.

Add to this the fact that our nuclear fleet in the UK is in the process of retiring. In June, EDF Energy said it would begin defuelling two rectors at Dungeness B seven years ahead of schedule. In 2022, two units at Hinkley Point B and Hunterston B are scheduled to close, although Hunterston B could actually burn its last fuel before the end of this year. This means our clean, firm power capacity is also reducing at the same time to what is a real unholy mess. It’s no comfort that the current crisis was predictable, but it’s where we are.

NucNet: What place does nuclear generation have in this uncertain market? Large nuclear operating countries like France are being affected by high energy prices too. Critics might say nuclear is not helping?

TG: My answer to those critics is that simply we haven’t got enough nuclear. It’s pretty obvious, frankly, that we’ve got a fleet which is ageing and retiring and therefore our clean baseload capacity is going down. That means we are more vulnerable and exposed to the vagaries of both the weather and internationally traded commodities and both of them together, which is what we’re experiencing.

If we did what we should have done 10 years ago and actually got on with building nuclear plants, we could well have been in a different position by now. We could have had more nuclear either delivering or about to come online to help mitigate that impact of those factors which are not within the control of any government. One can’t control the weather and no government can have a really significant impact on international trading commodities.

So if energy security is as important as politicians in the UK often say it is, I think there’s been a bit of a wakeup call. It’s too late in the sense of being able to make a difference for the immediate issue, but we could be in a much better place if such a crisis comes around again.

NucNet: So what you’re calling on the government to do is to accelerate a nuclear new-build programme. But is this message really reaching policymakers?

TG: I think there has been a noticeable shift in the UK in terms of government and policymakers over the last few weeks. I think the implications of security of supply on the events that have come to pass have really made ripples. I think there probably might have been a hopeful thought that the UK will get through, find some way of dealing with this energy crisis.

But, I think that assessment has been fundamentally changed. And this at the same time as we’ve got COP26 happening in the UK, and the government’s pressing a net zero commitment by 2050. This is all in the context of energy security that I think minds have been focused on a bit.

So I think we are noticing a discernible position of the UK government almost, but not quite, acknowledging that perhaps it’s gone a bit slow on nuclear and the determination to try to move a bit quicker – and that’s very welcome.

NucNet: The government seems to be on the verge of committing public money in nuclear new build. It has also been working on a new regulated asset base (RAB) model to help finance large infrastructure projects, including nuclear. Is this likely to help? Is the legislation in the process of being finalised?

TG: Well, the RAB idea has been circulating for quite a while, but it will relatively soon be put into legislation to help finance large capital intensive projects. The RAB model is not entirely new and has been in use in other sectors.

What is at play here is that there seems to have been an understanding and an acceptance that trying to build new nuclear – be that large, conventional reactors or small modular reactors – using the contracts for difference model that we used for Hinkley Point C is just not going to work because the cost of capital is too high.

I think the government is ready to move forward with a different approach, which will significantly reduce the cost of capital and help accelerate some of the projects that have been talked about for the last few years without very much happening.

NucNet: And the NIA welcomes the RAB move?

TG: Yes, more than that. We’ve been lobbying for it for a while and said very clearly that without it, there won’t be any new build. It’s no good for ministers and people to say: ‘Oh yes, we want some more nuclear’ and they don’t fundamentally fix that policy framework issue. It’s fundamental to being able to get more capacity built.

NucNet: Do you think the large energy-intensive industries will increase their interest in nuclear?

TG: By and large, the energy-intensive industries in the UK have always been on board with nuclear because they use and need a lot of power. Their primary motivation has been predictability of electricity cost. And they want the reliability in terms of price, predictability over medium to long periods rather than massive fluctuations and variations in supply and price.

They’ve always been in that position. Chemical industries in the UK, for example, have always been part of the voices calling for more nuclear. The main business body, the CBI in the UK, which covers all sorts of industries, is pro and has been for a long time pro-nuclear both in respect to climate and security of supply.

I think what has changed is with these energy price hikes happening every now and again, security of supplier has gone higher up the list at the moment in the UK with some people who might be not necessarily in industry, but are around the debate and may have been less likely to speak when they felt the debate was solely focused on climate.

NucNet: And what about the media? Do you see an increased interest in nuclear and an effort to understand it?

TG: Yes, there is a bit of a surge there as well. It has partly been as a result of what’s been happening. We’ve commentary from different places, media commentators and leading writers in the main newspapers saying not only that we need new nuclear, but we need to be actively working on it – that the government needs to be active in helping to facilitate that delivery.

NucNet: How much new nuclear does the UK need to meet its clean energy needs?

TG: Well, the first thing is that we can’t extend the lifetime of our fleet any longer, with the exception of the single-unit Sizewell B, which is the only nuclear plant that will operate beyond 2030. At the moment, it is scheduled to stop operating in 2035 and in all likelihood might be able to be extended into the 2050s. But everything else has been through lifetime extensions already. Operators are not going to be able to squeeze any more out of them. So we don’t really have the option of long-term operation.

To get to net zero and a decarbonised power supply, in the UK we need four times the amount of clean power that we currently have. By the mid-2030s, we need at least 10 GW of new nuclear, and at least another 20 GW nuclear to meet net zero in 2050. And we see a fleet of small modular reactors that would complement large reactor generation. And all of this happening in parallel.

NucNet: What about broader energy issues beyond electricity generation? I’m thinking of issues such as district heating and the generation of green hydrogen from nuclear.

TG: Indeed, almost everything we have talked about to this point was about grid power. I think it’s a really important contextual point that this isn’t just about grid electricity. This is about energy more widely and the role that nuclear can play in that, and will play in that if we’re going to successfully decarbonise more widely. This is another reason why I think we need a lot more electricity capacity.

The broader decarbonisation challenge includes heating. We will need to either directly electrify it or use an energy source which is best generated through using clean electricity to drive it, like hydrogen, for example.

In the context of current price and supply issues, I think policymakers are perhaps starting to understand a bit better than they would have done a few months ago what the role of hydrogen could be. How are we going to best produce that hydrogen without reinforcing the same problems about being over-reliant on gas and gas prices?

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