As energy demand rises, UK Prime Minister Boris Johnson meets industry bosses to discuss new power stations, with various reactors slated for closure
The government wants the UK to get 25% of its electricity from nuclear power, as said by Boris Johnson while speaking to nuclear industry top executives. Such a move would signal a considerable shift in the country’s energy production mix.
Executives from major technology companies including the UK’s Rolls-Royce, France’s EDF and nuclear utilities, and the US’s Westinghouse and Bechtel met with Johnson on March 21 to discuss ways of helping to speed up the development of new nuclear power stations.
While electricity demand is expected to rise steadily in the next decade, the United Kingdom generates about 16% of its power from nuclear power stations. However, several reactors are slated for closure. That would mean that just to keep the share of nuclear constant, large investments in new power stations would be required to increase it to a record level of just over a quarter of electricity use.
Major foreign investors including Australia’s Macquarie and the Canada Pension Plan Investment Board, alongside a series of big pension companies and insurers, including Rothesay Life, Aviva, and Legal & General were also present at the meeting.
For years, ministers have wrestled with how to attract private capital to invest in nuclear electricity production. However, companies have balked at putting insurance cash and pension at risk.
To make it easier for insurers and pensioners to invest, the government is considering changes to insurance rules set by the EU and copied by the UK. The UK hopes that its switch to a “regulated asset base” model will give long-term investors more certainty on returns, a change it hopes will address limitations to the current rules, known as Solvency II.
According to a government source briefed on the discussion, the government wanted to show the nuclear and investment industries that it had a “clear ambition for more nuclear” in part to balance out intermittent renewable power sources.
In recent months, after unprecedented increases in fossil fuel prices, scrutiny of the government’s energy policies has increased. Russia’s invasion of Ukraine has added to the pressure, with gas and oil prices surging and western allies considering restricting energy exports as they try to isolate President Vladimir Putin’s regime.
Oil and gas executives met with the prime minister last week to discuss increasing investments in the North Sea and it is understood that next week the executives from the offshore wind industry will meet with him to discuss plans for further expansion of renewables.
Industry heads and financiers were notified by Johnson that successive British governments had portrayed “chronic absence” of leadership on nuclear energy and that the country was “being left for dead” by other nations, such as France, on the issue, according to an aide who was present at the meeting.
Tom Greatrex, the chief executive of the Nuclear Industry Association (NIA), speaking after the meeting, said:
“Accelerating nuclear projects is absolutely essential to keep energy costs down, cut expensive gas imports and strengthen our energy security as we move towards net zero. That means urgently investing in a fleet of large and small nuclear stations, alongside renewable investment, to deliver the clean, sovereign power we need.”
In recent decades, the UK has struggled to build new nuclear power stations, with geopolitical tensions making the government less keen on attracting Chinese investment to Sizewell C on the Suffolk coast, and the Japanese conglomerate Hitachi in 2021 pulling out of plans to build a new reactor at Wylfa, north Wales.
The existing nuclear fleet, meanwhile, has been declining steadily, with Heysham I and Hartlepool I due to shut down in 2024. Hinkley Point B in Somerset will follow suit in the summer, and Hunterston B in Scotland retiring earlier this year. Nuclear capacity, at that point, is expected to fall to as low as 3.6GW.
This government has been compelled to increase its annual nuclear power capacity to 15GW by 2030 and 30GW by 2050 by a cross-party group of MPs that campaigns on nuclear issues, far above the 12.7GW recorded at the nuclear power’s peak in 1995.
A ban on new nuclear projects in Scotland, imposed by the devolved government, and difficulty in securing funding from private investors are among the major obstacles, which prevent Hunterston B from being replaced.
