Business groups were left exasperated yesterday as another core investor pulled its support from the UK nuclear sector, denting the government’s energy plans. “As the second cancellation of funding for a new nuclear plant in as many months, it leaves in doubt the UK’s ability to replace its existing nuclear fleet,” Matthew Fell from the Confederation of British Industry said. “Nuclear power is a vital part of our energy mix, and new projects are needed to secure our future low-carbon, mixed energy supply.” The decision will hit workers in Anglesey, where 10,000 jobs were expected at its peak during construction. The British Chambers of Commerce said the decision was “devastating” for north Wales and the region. Local businesses which have spent time and resources to become part of the Wylfa supply chain will also face problems, the chamber said. “This latest announcement will add further to their jitters regarding the security of our future energy supply,” said Edwin Morgan, director of policy at the Institute of Directors. Mycle Schneider, a Paris-based consultant and lead-author of the World Nuclear Industry Status Report, said that UK wind and solar output tripled output between 2012 and 2017, adding 40 terawatt hours of energy – almost twice the amount expected to be generated at Wylfa. “There has been a dramatic decline in the cost of renewables. Even five years ago people argued that we need natural gas as a bridging technology, but not anymore,” he said. Energy secretary Greg Clark struck a similar note, telling parliament that the “economics of the energy market have changed significantly in recent years.” Jonathan Marshall, head of analysis at the Energy and Climate Intelligence Unit, said that the government is slowly moving away from plans to rely on nuclear power to reach carbon emissions targets.
City AM 18th Jan 2019 read more »
While attention may be diverted elsewhere it is important to understand the seriousness of the challenge now faced by the UK’s energy sector, as well as the historic shift in thinking and investment that appears to now be underway. The existing nuclear fleet provided around a fifth of UK power last year, combining with renewables to ensure more than half of UK generation was from low carbon sources. The three plants that have now been canned had the potential to curb UK carbon emissions by 29 million tonnes compared to gas power plants, according to Simon Evans, that is equivalent to eight per cent of the UK’s current emissions. The very real and obvious risk is that the planned fleet of new nuclear plants fails to materialise, renewables investment increases to fill the gap, but as existing reactors retire wind and solar struggle to fully compensate, leaving more gas on the grid for longer than planned, and without the carbon capture and storage capabilities that were once envisaged. The threat to the UK’s carbon budgets and long term decarbonisation plans is now clear and present. The government’s insistence that new nuclear projects still have a role to play in the UK and its promise to again review how new developments are financed has to be seen in the context of Clark’s pointed assessment that renewables technologies have seen costs fall to the point where “they now require very little public subsidy and will soon require none”. It is notable that the latest blow to the nuclear sector came in the same week as wind turbine developer Siemens Gamesa unveiled plans for a new 10MW offshore wind turbine, which will serve to drive down costs still further for the sector. The pro-renewables narrative from this point forward is increasingly compelling. Onshore wind and solar will start to get built without subsidy support. Offshore wind will continue to surprise with its cost reduction curve, starting with this Spring’s auction. Around 30GW of offshore wind capacity should be online by 2030 and developers say privately that if needed they stand ready to provide more. Comprehensive energy efficiency measures will help to curb demand even as electric vehicles and heat pumps take off. Plummeting energy storage costs and increasingly smart grid management algorithms will manage intermittency challenges and deliver that £8bn a year in systems cost savings the National Infrastructure Commission promised. It is a hugely upbeat projection that is fully in line with global technology and investment trends. It might yet come to pass. And yet it has to be acknowledged that such a strategy is not completely risk free.
Business Green 17th Jan 2019 read more »
