The government will be fully aware of this, and will surely reform the market to ensure that there is a sufficient incentive for utility companies to build the eight planned reactors. At the same time, they should facilitate shale gas exploration. A combination of nuclear and locally-extracted gas looks like the most promising combination to provide the bulk of a secure energy system for the foreseeable future.
Rather later than is comfortable, the UK government seemed to have arranged things so that eight new nuclear power stations would be built, with the first coming on stream before the end of the decade. This plan has now suffered a severe setback, however, with the Horizon Nuclear Power consortium stopping its development of one plant on Anglesey and another near Bristol (RWE and E.On halt nuclear plans at Wylfa and Oldbury). With the UK’s remaining nuclear fleet – with the exception of Sizewell B – due to be decommissioned by 2023, something has to be done to replace about 15% of the total generating capacity. That figure will rise significantly as older coal-fired stations are also shut in compliance with EU rules.
The decision by the two German utility companies should not really be a surprise. After all, they had only recently been hit by the German government’s decision to close all remaining nuclear stations by 2022. As the two major owners and operators, RWE and E.On will both lose the income from these plants and bear the decommissioning costs earlier than expected. Nevertheless, this leaves the UK government with something of a dilemma. There was always a possibility of a significant gap in capacity as existing coal and nuclear stations were taken out of service; the decision by RWE and E.On doesn’t change that, but arguably could extend the period of energy insecurity.
Government ministers are playing down the issue. Charles Hendry, energy minister, is quoted by the BBC as saying "E.On and RWE's withdrawal is clearly very disappointing, but the partners have clearly explained that this decision was based on pressures elsewhere in their businesses and not any doubts about the role of nuclear in the UK's energy future. The UK's new nuclear programme is far more than one consortia and there remains considerable interest. Plans from EDF/Centrica and Nugen are on track and Horizon's sites offer new players an excellent ready-made opportunity to enter the market."
Maybe, but the big issue is whether nuclear can be made to pay. Capital costs are large and payback periods long, and there has to be some certainty of achieving a decent return over the 60 year service life. This is what is currently in doubt. There has been a long period with little nuclear new build, and the experience of the Olkiluoto 3 reactor being constructed in Finland is not encouraging (Olkiluoto 3 nuke plant may be delayed further). The reasons for the large cost and time overruns in this case are not fully clear, but seem to be related to the new reactor design and changes to the safety systems. Put together with the German exit from nuclear energy and the Fukushima incident, nuclear new build needs all the help it can get.
And there are still good reasons to go down this route. Nuclear remains the only safe, proven technology which can provide a reliable, low-carbon base load supply. If there were to be a nuclear renaissance, the technology would also develop further, to make much more efficient use of the uranium fuel (and hence not only extend supply, but also very considerably reduce the problem of long-term storage of radioactive waste). This could extend the period over which the world could depend on nuclear fission over hundreds of years, which would give plenty of time for development of further alternatives (including fusion and cheap, efficient harvesting and large-scale storage of solar energy).
But to do this requires guarantees and incentives to be decided on soon (the UK government’s electricity market reform package should be announced in May). However, despite the apparent advantages of nuclear, it is still disliked by many environmentalists. To quote Greenpeace’s Doug Parr, from the same BBC report, "The government's energy strategy is crumbling. Not even the billions of pounds of taxpayers' money they have offered as incentives to the German and French nuclear industry are enough to make a new generation of power stations economically viable."
This is somewhat disingenuous, as are so many statements from environmental campaigners. After all, the renewable energy technologies which they would rather see are completely dependent upon public subsidy, and there is little prospect of them ever being economic. Much of this subsidy goes to the same German and French companies. Even then, renewables cannot provide a base load, because of their intrinsic intermittency.
Wind turbines, with all their disadvantages, remain the only technology capable of large-scale deployment. Despite recent investments in wave and tidal power development, and work which stretches back several decades, there is little prospect of viable systems emerging anytime soon (EU push for ocean energy set to fall short). And the Desertec proposal for large-scale generation of solar power in North Africa, transferred to Europe via a network of high voltage DC cables, remains a highly ambitious and expensive dream.
The Scientific Alliance
St John's Innovation Centre
Cowley Road
Cambridge CB4 0WS
_________________________________________________