Lobbying for Sizewell C intensifies amid job loss fears
Proponents of the proposed EPR nuclear power station at Sizewell on the Suffolk coast are ramping up calls for the government to give the project the go ahead, saying tens of thousands of jobs are at stake, while critics say the project is too expensive and unnecessary.
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Sizewell C, which aims to be an almost carbon copy of EDF's and China's CGN’s Hinkley Point C in Somerset, applied to the Office for Nuclear Regulation (ONR) for a nuclear site licence to construct and operate at the end of June, a process that is expected to take 15-18 months.
The industry is also on tenterhooks as it awaits the government’s position on nuclear in its much-anticipated energy white paper, expected in the next few months.
Hinkley Point C has already come in for criticism for having overrun its budget and schedule – the plant is expected to cost up to £22.5 billion, far higher than the original estimate, and it will be running by 2025, delayed from the original start of 2017. The EPR reactor design was also bashed recently by France’s own Minister of Ecological Transition Barbara Pompili.
“The Flamanville EPR is a mess," said Pompili during a radio interview with France Inter, while reiterating the French government’s goal of reducing nuclear in the country to 50% from around 70% of the mix by 2035.
The relatively higher cost of nuclear over renewables, such as wind, has prompted opponents to call for the scrapping of the technology in Britain altogether.
According to Lazard, the levelized cost of energy (LCOE) for nuclear is around $118 to $192 per MWh compared to $28 to $54 per MWh for wind and between $44 and $68 for combined cycle gas.
EDF provides a Strike Price for Hinkley C, under the UK’s Contracts for Difference (CfD) mechanism, at £92.5 (around $120) per MWh at 2012 prices. Given this price is index-linked, the current price for Hinkley C has ramped to about £110, says Paul Dorfman, Honorary Senior Research Fellow at the Energy Institute, University College London (UCL).
“The question is, at these prices, is it Game Over for nuclear in the UK?” asks Dorfman. Under the expected Regulated Asset Base (RAB) funding model for Sizewell C, it would be British tax payer picking up the bill as the project goes over costs, Dorfman adds.
Problems at Flamanville prompted the French auditor office early July to announce that construction of new EPRs in France must have clear financing methods and guarantees after difficulties and construction costs were underestimated during the building of the first two EPRs in Finland and France.
Gross Value Added by UK nuclear sector by region (2016)
(Source: NIA, ONS, Oxford Economics)
When the Wind Stops Blowing
EDF itself has rejected these criticisms, saying that it is the high cost of financing that is ramping up its reactors’ prices and that a country cannot rely entirely on renewables for power due to intermittency problems.
“In the UK, despite the progress we’ve made in bringing forward a very successful offshore wind sector, over June and July, during a pandemic and almost unprecedented economic downturn, we’ve made almost 40-50% of our electricity by burning gas. The situation in the UK demonstrates that you need a way of making low-carbon electricity when the wind’s not blowing,” said Julia Pyke, Director of Sizewell C Financing and Economic Regulation at EDF.
Speaking at the end of July during the OECD-Nuclear Energy Agency webinar “Unlocking financing for nuclear energy infrastructure in the COVID‑19 economic recovery”, Pyke noted that if Sizewell C was financed in the same way as the government financed transmission lines, consumers would pay around £40/MWh.
“It’s essentially a political decision. It’s not the cost of construction, but the cost of money, and the cost of money depends on the level of risk,” she said, adding that the cost should not be compared to renewables but rather other, non-renewable sources of power.
EDF also argues that, since much of Sizewell C is a copy of Hinkley Point C, it will leverage its experience in building that plant to keep costs lower in Suffolk. The Strike Price for Hinkley Point C would fall to £89.5/MWh at 2012 prices if EDF were to take a Final Investment Decision on Sizewell C, the company has said.
“For Hinkley Point C, if you look at all the costs of the design and engineering, all the costs of going through the generic design assessment, all the costs of preparation for construction, those costs are one-off costs. With Sizewell C, you’ve got all of the benefits of that initial investment,” says Sarah Williamson, Technical Director at Laing O’Rouke.
Supply Line Cliff Edge
The Sizewell C Consortium, launched mid-July and made of of over 50 companies and organisations, says the Sizewell C project is a vital step to securing Britain’s low carbon future and the prosperity of UK jobs and industry. The “shovel ready” project will deliver 25,000 job opportunities and 1,000 apprenticeships, it says.
“There is a lack of clarity so far from government on whether to build more gigawatt-size nuclear power plants or not, and we know this cliff edge is coming for many suppliers,” says Cameron Gilmour, spokesperson for the consortium and vice president of Doosan Babcock.
"If they don’t create a pipeline of projects, if we don’t have a planned transition from Hinkley Point C to Sizewell C, we’ll lose so much momentum and we’ll lose skills. And these skilled people, knowledgeable people, with the experience of building Hinkley Point C will be lost to other jobs in other sectors, and won’t be there if we return to this project in a year or two's time.”
According to the Project Director of Nuclear Build at Atkins, which has joined the consortium, Andrew Thompson, making sure that Sizewell C is a carbon copy of Hinkley Point C will make the most of the initial regulation and work already done.
“What we’ve got to do is be really clear in terms of there being no design change, because we know it’s already been through the regulator,” says Thompson. While noting that some differences would be needed below ground due to the plant being in a different geographical location, designers should resist making changes that would prompt a new round of safety regulation, he says.
Suffolk, the East Anglian county in which Sizewell C will be built, is also keen to benefit from the economic injection the plant would bring to the region.
“A new nuclear power station at Sizewell C will generate a significant boost to the local economy in terms of jobs, investment, supply chain activity and infrastructure improvements and we can see the benefits that Hinkley Point C is bringing to the South West,” says Gareth Davies, Head of Sizewell C Supply Chain Engagement at the Suffolk Chamber of Commerce.
By Paul Day