Australian news, and some related international items

The UK’s nuclear plan is a financial, environmental and political risk

The UK’s nuclear plan is a financial, environmental and political risk, Investment Monitor,   Jon Whiteaker , 16 Nov 21,    If the UK government thinks the RAB model will solve all its nuclear power problems, it may have a nasty surprise coming its way.

As the dust settles on COP26, the UK government will turn its attention away from global discussions and towards what it is doing domestically to help mitigate the climate crisis.

The government’s Net Zero Strategy sets aside £120m towards developing new nuclear power plants, which it says “could support our path to decarbonising the UK’s electricity system” by 2035.

Could’ is doing a lot of work in that sentence, because although nuclear power plays a prominent role in the government’s decarbonising strategy, bringing additional nuclear capacity online is far from straightforward.

The government says nuclear is a continuous, reliable and low-carbon form of energy that has been part of the UK electricity system for 65 years. Nuclear is also controversial, hugely expensive in comparison to other fossil fuel alternatives, and often proves challenging to develop.

According to the latest World Nuclear Industry Status Report, between 1951 and 2021, of the 783 nuclear reactor projects launched, 12% have been cancelled. Delays and cost overruns are also very common when constructing nuclear plants.

The UK government is hoping to kickstart development of new nuclear in the UK through the introduction of the regulated asset base (RAB) funding model. This model is intended to widen the investor pool for nuclear power, reduce financing costs, and ultimately save bill payers money.

While the RAB model has proved successful for other large UK infrastructure projects, it comes with risks for the government. It is unclear which investors will be happy to support new nuclear projects, and there are potential political costs if UK citizens are made to pick up at least part of the tab if things go wrong.

The government expects electricity usage to increase by 40–60% by 2035. It has mapped out several scenarios for how this demand can be met solely by renewables, all of them dependant on building new nuclear power capacity.

Yet in 2020, while generation from all other renewable energy sources increased, generation from nuclear power actually declined in the UK due to a decision not to restart operations at the Dungeness B plant in Kent, which had been suffering a prolonged outage since 2018.

The UK nuclear fleet is old, suffering performance issues and largely due to be decommissioned. By 2035, the UK will lose almost 8GW of nuclear power plants to decommissioning.

The only new nuclear plant under construction is the 3.26GW Hinkley Point C plant, which is now due to be completed in 2026.

All this means the government needs to quickly develop new nuclear capacity. It seems very taken by new small modular reactors, particularly if they are developed by UK companies such as Rolls-Royce.Yet this and another new technology, advanced modular reactors, are not due to reach the demonstration phase until the early 2030s.

So, the government has been seeking a way to deliver several new Hinkley Point Cs…………………

The National Infrastructure Commission, a body designed to give impartial advice to the government, said in March 2020 that a “renewable-based system looks like a safer bet” and a “substantially cheaper” option than the construction of multiple new nuclear power plants.

That sounds like advice worth considering again.

November 25, 2021 - Posted by | Uncategorized

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