Nonsensical Nuclear

The new Energy Secretary has only had a few days in the job but long enough to discover that her department’s nuclear strategy, if it has one at all, makes no sense. This critique has three parts: what we know, rumours, and why we are in this situation.

We know that, in a net zero carbon 2050, Great Britain’s energy needs will be at least as high as now and they will almost all have to be met by electricity. Based on average demand, electricity capacity will have to increase by 6 times to 226GW. Total energy demand in 2022 was the equivalent of 1,968 TWh of electricity, and electricity only supplied 320.7 TWh, i.e. 16.3%. However capacity will have to be even higher than this to deal with periods of peak demands which can be 50% above average demand.

Renewables are all very well but the wind does not always blow nor does the sun always shine. Existing nuclear supplies about 6.5GW, but that will shrink to 3.26GW as Hinkley Point C comes on stream and all other reactors close. The Department for Energy Security and Net Zero(DESNZ) thinks 25% of electricity needs for nuclear would be 24GW, which is clearly too low. 25% of 226GW would be 56.5GW, a more reasonable 2050 target for nuclear, or 53.2GW of new nuclear excluding Hinkley Point C.

DESNZ now recognise that small nuclear reactors (SMRs) are cheaper and better value for money than the traditional big Giga-reactors and they refer to the former as “low cost nuclear”. With a capacity of about 300MW each, we would need about 177 SMRs to be operating by 2050, an average addition of 6.8 per year.

Contrarily, the DESNZ approach is “too little, too late.” A competition to select SMRs has been set up with a view to deciding on which two SMRs (one of each of two types) should be ordered over the next six years, specifically expressed as “the government’s commitment to take 2 Final Investment Decisions next parliament”. The two needs to be 41.

Contributing to the confusion is the DESNZ’s “hire a dog and bark yourself” policy. “Great British Nuclear” (GBN) was announced three Prime Ministers ago, and confirmed by successors. GBN has a chairman and CEO, autonomy and “is responsible for driving delivery of new nuclear projects.” Meanwhile DESNZ, no doubt playing games with HM Treasury, appointed “a Senior Responsible Owner (SRO) of Phase 2 of the Low-Cost Nuclear Programme with effect from 8th February 2021 (the “Effective Date)”, directly accountable to Jeremy Pocklington under the oversight of the relevant Minister of State.” Whilst Pocklington has doubtless told his new Energy Secretary that this is merely oversight or liaison, the memo makes it very clear that the SRO is in charge, i.e. it duplicates the GBN Chairman’s.

What is probably correct but not independently verifiable must be described as “rumours”, One is that while GBN is doing its best to run the run competition fairly, DESNZ has rigged it so that Rolls Royce, as the only British SMR manufacturer, is bound to win. The SRO appointment letter only mentions Rolls Royce. As some degree of apparent competition must emerge, General-Electric-Hitachi will also win. This decision is remarkable as the latest date for entering the competition was 23rd August. Several leading SMR developers are believed not to have bothered because certain failure is not good for business.

The UK seems to be breaking ranks with the US and Canada on SMR support and licensing. The North Americans are adopting a non-prescriptive, all ideas welcome, approach. They provide licensed land for prototype development and encourage utilities to build FOAKs (first of a kinds). They are doing this in the full knowledge that some technologies will fail and that those investors will lose money. But at the end of the day they will have a smaller number of the best value SMRs. We could learn from SMR developers setting up in Britain and we should. Chasing away nuclear investment at this stage is daft

The last question, “why?”, is simply baffling. We need all the help we can get and not artificial barriers created by Whitehall civil servants keeping out the best and the best value SMRs. Doing so is bad for Britain and will prove expensive for energy users if the government is serious about a net carbon zero 2050.

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If only Will Hutton used even a smidge of logic and knowledge

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No plan strikes us as being eminently sensible here