UK nuclear strategy takes shape

The British nuclear power expansion plan has begun strong with public and private nuclear programs starting work just a couple of months after the strategy’s announcement in January.

A demonstrator's 'white elephant' displayed during a protest outside the Sizewell B nuclear plant. (Source: Reuters/Pool)

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At the end of March, British Prime Minister declared that securing the future of the country’s defense and civil nuclear industry was a “natural endeavor” and announced public and private investment to reinforce the nuclear workforce and support 40,000 new jobs.

In January, the government plan, ‘Civil Nuclear: Roadmap to 2050’, committed to securing investment decisions for 3-7 GW of additional nuclear capacity every five years from 2030-2044 to meet the goal of up to 24 GW new nuclear by 2050.

The project would mean a sharp ramp up in new build efforts with, on average, at least one large nuclear power plant every year from 2026 to the middle of the century.

The level of ambition has been met with some cynicism in the light of budget overruns and repeatedly missed schedules at the UK’s only current nuclear plant project in Somerset.

The two unit 3.2 GW EPR Hinkley Point C nuclear power plant is still under construction after winning governmental approval in 2016, prompting skepticism that the roadmap target can be met.

However, after just a couple of months, the wheels are in motion to significantly expand British nuclear capacity.

The public body built to deliver the targets, Great British Nuclear (GBN), announced it is buying land for new nuclear development from Hitachi at Wylfa in Ynys Môn/Anglesey and Oldbury-on-Severn in Gloucestershire.

It also put to tender development contracts potentially worth billions of pounds for six companies that form part of GBN’s Smal Modular Reactor (SMR) Technology Selection Process.

Bidders have until June to submit tender responses and it is hoped successful bids will be announced at the end of this year or early 2025.

“We've said all along that we have to purchase sites, because it reinforces how serious the government is in the program, so that was a massive milestone,” Great British Nuclear (GBN) Chairman Simon Bowen.

UK Civil Nuclear Sites 

(Click to enlarge) 

Source: Civil Nuclear: Roadmap to 2050

Laying the groundwork

The around 2,000-page tender document is now in the hands of the potential bidders which include EDF Energy, GE-Hitachi Nuclear Energy, Holtec Britain, NuScale Power, Rolls-Royce SMR, and Westinghouse Electric Company UK. 

The document covers companies’ technological and project readiness, access to financing, how the companies aim to develop the site, potential partners, and supply chain development strategies, amongst other areas.

The companies’ next step, after having pitched their products to win the industry’s and government’s attention, is for them to prove what they can do and how they plan to do it, says Bowen.

The tender process will cover questions such as how much first-of-a-kind movers will need from the government to advance their projects and how close they are to regulatory approval.

“The government is prepared to underwrite the risk of the early-stage projects, which is gratifying compared to other markets,” says Bowen.

“(Companies) are looking on and seeing the UK government understands that first-of-a-kind has risk attached to it, and they also understand that the only people that can really bear that risk is government.”

While there is no final number on investment levels, Bowen sees overall requirements of around £200 billion, from both public and private coffers, to reach 24 GW.

Keeping it private

The government’s commitment to nuclear – which is expected to survive a likely change in the ruling party later this year – has also helped the establishment of the UK’s only independent SMR development company Community Nuclear Power (CNP).

The CNP aims to deliver around 1 GW of nuclear power by 2032 and has earmarked sites around the country on which they aim to initially concentrate; North Tees, Cumberland, and the North West and South West of England.

The company will focus on the demand side of nuclear power as opposed to, but in harmony with, the government’s supply side view, according to CNP Chief Development Officer Chris Sheryn.

“We are the enabler that sits in between the demand, or the ambition, and the technology that is able to deliver it,” says Sheryn.

North Tees is a privately-owned industrial complex in England’s northeast which originally housed the ICE Billingham plant, one of Britain’s most important chemical works.

Today, North Tees, with its industrial and transport infrastructure and highly skilled workforce, is reinventing as a green energy hub and will include the UK’s first Carbon Capture, Utilization, and Storage (CCUS) project which aims to capture 10 million tons of CO2 per year by 2030.

It is here that CNP has signed a Memorandum of Understanding (MoU) with Westinghouse to build four of the company’s AP300 SMRs, expected to be operating by the early 2030s.

Talks are ongoing for Power Purchase Agreements (PPAs), with grid connection at the margins, to supply electricity and/or heat to a green chemical hub planned for the area.

“It’s all private funding and, in the last 18 months, we've had conversations with investors of all different stripes, from venture capitalists through to pension funds … investors that have a risk appetite in their portfolio, but also the knowledge of what nuclear deployment is,” says Sheryn.

With companies such as Westinghouse, the question is not whether the first-of-a-kind machine is a risk – Westinghouse has proved it can build a reactor, so few questions are being asked about the viability of a smaller version of the AP1000 – but rather investors are concerned about first of the current project risk, including legislation and licensing.

“Investors’ primary concern is certainty of timing. While absolute capital cost is a material consideration, it is dwarfed by the value of achieving operation and subsequent revenue on time or early. So, maintaining visibility of when revenues will begin, and subsequent returns delivered, is key,” says Sheryn.   

Like Bowen, Sheryn is also convinced that cross-party commitment to the project is helping investor confidence.

“For the first time in living memory, we’ll probably see a transition of government where the position on nuclear will not change. It's already set. That’s key as you’ve already got that stability whatever the (political) transition,” he says.

By Paul Day