How crucial is nuclear power for energy security?
Written by Kunal Sawhney, CEO, Kalkine
Amid the gruelling energy crisis, the government has announced its intention to take a 20 per cent stake in Sizewell C nuclear power plant in Suffolk. The planned project is to construct a 3,200 Megawatts electric (Mwe) nuclear power station. The ambitious power project is estimated to generate low-carbon electricity sufficient to supply six million homes; not only that, but it will also create thousands of local jobs and support around 70,000 jobs.
The current nuclear power situation in the country
Nuclear power constitutes a major portion of the UK’s power need. At present, around 16 per cent of the nation’s electricity comes from nuclear power plants. This nuclear power is generated from 13 nuclear reactors at six plants. The government has been reiterating its resolve that nuclear power is an integral part of meeting its carbon reduction target. Also, different other sites like Bradwell, Hartlepool, Wylfa, Heysham, Oldbury, and Sellafield have been identified for new power stations.
An independent body established under the amended Climate Change Act 2008, Climate Change Committee (CCC) advises the government on meeting its carbon reduction targets. In 2020, CCC had stated that if the UK is to meet its net-zero goal by 2050, nuclear power will be needed as renewables and another low-carbon generation source of energy.
Government initiatives
The government, in October last year had, introduced a new finance model that would help reduce the cost of new nuclear power projects in Britain. The new model known as the Regulated Asset Base (RAB) is expected to cut the cost of financing and the ultimate cost to consumers of over £30 billion on each new large-scale station by attracting a wider range of private investment into new nuclear power projects. The model is also said to be a step forward for self-reliance by enlarging the pool of private investors and reducing the dependence on overseas developers.
The government had committed £210 million to develop small modular reactors in the UK, one of the world’s first small modular reactors (SMR). The Rolls-Royce SMR would be matched with funding of over £250 million from Rolls-Royce Group, BNF Resources UK Limited, and Exelon Generation Limited. SMRs are set to be less expensive to build compared to old-style nuclear power plants, as they are small in size.
A final investment decision for a large-scale nuclear project investment of £1.7 billion was announced in the Autumn Budget and Spending Review 2021. An investment of £385 million was also announced for advanced nuclear research and development.
Energy security is the prime concern
The UK is presently going through the worst energy crisis it has ever seen. Soon after the pandemic, when the world was struggling with the supply chain constraint that disturbed all the economic activities, including energy supply, the Russian invasion of Ukraine destabilized the whole energy equation between the UK and its energy suppliers. Reliance on foreign oil and gas imports has made the government and the people think again about the issues of energy security.
The current energy crisis and high cost of energy bills have forced the government to take all possible initiatives to minimize the woes of the households at the earliest. The decision to acquire 20 per cent stake with an equal stake taken by French developer EDF is anticipated to encourage infrastructure investors and pension funds to take the remaining stake in the long-delayed Sizewell C nuclear power.
It has become imperative as the nuclear power capacity in the UK is likely to decline in short to medium term. Around half of the UK’s current nuclear capacity is due to be decommissioned by 2025, which would make the task of meeting the net-zero goal by 2050 difficult. The UK’s high reliance on other countries for its energy needs calls for immediate action. The government had earlier made a contribution of £100 million to the project’s development now its acquisition of a 20 per cent stake will surely boost the morale of the investors, side by side it will create lots of local jobs.
