UK government to bolster support for nuclear power
UK government to bolster support for nuclear power
Package of measures to include details of plans to develop ‘mini’ reactors
Andrew Ward and Jim Pickard in London
UK ministers will this week renew their support for nuclear power with measures to strengthen the industry’s supply chain and develop a new generation of small-scale reactors.
An artist's impression of the Moorside nuclear plant in Cumbria © PA
The future of nuclear energy in the UK has been called into question this year as the industry struggles to compete with the falling cost of renewable energy.
However, the government is expected to argue that nuclear power remains crucial to UK energy security and reducing carbon emissions.
It will signal its continued support with a package of measures to bolster nuclear research and engineering, according to people briefed on the plans. These will include long-awaited details of how the government plans to promote development of “mini nuclear plants” known as small modular reactors.
The measures are expected to coincide with a breakthrough in plans for a new large-scale nuclear plant at Moorside in Cumbria. Kepco, the South Korean utility, is on the cusp of a provisional deal to invest in the Toshiba-owned NuGen consortium behind the Cumbrian project, according to people involved in the process.
Toshiba is keen to sell NuGen as part of efforts to survive the financial crisis engulfing the Japanese conglomerate. Talks have also been held with CGN of China but Kepco is expected to named preferred bidder, possibly this week.
The UK’s nuclear “new build” programme is intended to help replace large amounts of dirty coal-fired power generating capacity and old nuclear plants due to be decommissioned in coming years.
However, the future of Moorside and several other planned projects have faced doubts over financing and affordability at a time when the cost of rival renewable power projects — especially offshore wind — is falling.
Nuclear developers are under pressure to deliver future projects at a lower cost than the widely criticised £20bn Hinkley Point plant under construction in Somerset. The industry is pushing for government support to help lower financing costs.
The Treasury remains cautious about committing public equity to nuclear reactor construction — notorious for high costs and budget overruns — but ministers are open to providing some kind of financial backing, such as loans, bonds or guarantees.
The government’s refusal to help finance the Hinkley Point project — instead relying entirely on French and Chinese investors, with costs to be recovered through consumers’ bills — has been widely criticised for inflating its cost.
Parliament’s public accounts committee last month accused the government of making “grave strategic errors” in the Hinkley negotiations, including a failure to consider public financing.
Hinkley is the first new nuclear plant to be built in the UK since the 1990s and industry leaders say future projects will be cheaper as the domestic nuclear supply chain is rebuilt.
Nuclear power accounts for about a fifth of UK electricity generation but all eight existing plants are due to be closed by 2035.
The Department for Business, Energy and Industrial Strategy declined to comment.
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