New Nuclear

As the UK vision for nuclear energy comes into question, Janet Wood gives an update on recent developments at the Hinkley, Moorside and Horizon projects. The UK nuclear new-build programme remains the flagship scheme of its type in Europe, with a new fleet planned to replace the elderly plants that currently supply up to a fifth of electricity generation. But although the government’s broad commitment is secure, little remains of its original vision of a series-build approach that would cut costs and build a domestic industry. In practice, the UK has become something of a test bed for Asian reactor exporters, rather than a new rebirth for European nuclear, with Chinese and Japanese companies leading projects. The UK nuclear new-build programme has been a casualty of both global nuclear industry failures and a changing domestic power industry, which has seen dramatic falls in the cost of offshore wind and a boom in interconnection. Nuclear still has strong political backing – in fact, it seems that the government will have to take some kind of stake in future projects. That is partly because the projects are seen as so risky by investors, and partly because successive reports by parliamentarians and UK financial watchdogs, like the National Audit Office, have pointed out that the government’s insistence that it had transferred that risk to the private sector had been a major factor in raising costs, because the government could secure cheaper finance for the project than the private sector. Far from giving the go-ahead for a series, the influential National Infrastructure Commission said this year in its National Infrastructure Assessment that “Government should not agree support for more than one nuclear power station beyond Hinkley Point C before 2025.” In fact, two reactor designs have been cleared to follow EDF’s EPR and at least one company sees the design as ready for series build. The Commission is advisory and the government can ignore its advice. In the past, it might have meant some discussion in the Department for Business, Energy and Industrial Strategy (BEIS) over whether to favour the Moorside site adjacent to Sellafield in northwest England, or Wylfa Newydd in Wales. But the implosion of Westinghouse, whose AP1000 was lined up for Moorside, means that troubled project has been overtaken by another: Wylfa in Wales. The remaining question at Wylfa Newydd is whether it can be funded. The UK government has reportedly agreed to a £5 billion financing package, although it stressed that a deal was not done and it is not clear what form that support takes. Horizon also said it was looking for support from the Japanese government. The fundamental question remaining is the price to be paid for power from the plant. The project has no hope of attaining a level near the £92.50/MWh agreed in October 2013 (and index-linked) for EDF’s Hinkley Point C, and reports in the Guardian suggest a price of £80/MWh, while the Financial Times suggests it could be lower still. Horizon appointed Bechtel as project management contractor for Wylfa Newydd on 22 August and also signed support contacts with Hitachi Nuclear Energy Europe for delivery of the ABWR reactors and JGC New Energy UK Limited for balance of plant services.

Compelo 13th Sept 2018 read more »

The world is consuming ever-growing amounts of energy, and consumption is set for a particularly intensive growth in electricity. Put simply, people are going to need more electricity in the years to come as we shift away from fossil fuels. This fast growth will require more generation capacity, some of which will be nuclear. In fact, according to a report by the International Atomic Energy Agency, the world’s nuclear power generation capacity may grow to 511 GW(e) by 2030 from 392 GW(e) in 2017, and further to 748 GW(e) by 2050. This is the high case scenario outlined in IAEA’s Energy, Electricity and Nuclear Power Estimates for the period up to 2050 report that came out this week. In the low case scenario, global nuclear capacity would shrink to 352 GW(e) by 2030 but will inch up later, reaching 356 GW(e) by 2050. In other words, nuclear will continue taking part in the generating electricity for an increasingly electricity-hungry planet and the worst that can happen is that it loses some ground to natural gas and renewables.

Oil Price 13th Sept 2018 read more »

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Published: 14 September 2018