Nuclear Policy in the UK - Where are we now?

History

Nuclear power policy has changed significantly since Sizewell B, the last of what might be called the first wave of nuclear plants in the UK, was ordered in 1987.

Through the post war period almost all electricity in England and Wales had been generated by a single company, the Central Electricity Generating Board (there were similar bodies in Scotland and in Northern Ireland). The CEGB was owned by the government and was responsible for all decisions about new power stations. It had a duty to supply electricity and a geographical monopoly, which meant it could invest in power stations which were expensive to build (though quite cheap to run), like nuclear reactors, knowing the costs could be passed on to customers who could not shop around.

Though never officially part of government policy, Energy Secretary David Howells had suggested in 1981 that around ten Pressurised Water Reactors might be built in the UK over the next decade or so. By 1989 this had been scaled back to four. However, when the electricity supply industry was privatised it proved impossible to persuade the new companies to build nuclear plants when producing electricity using gas was cheaper and less controversial. In November 1989 the government announced that there was to be a moratorium on building new nuclear plants, which in effect remained in place through reviews in 1994 and 2003.

White Papers

By the second half of the first decade of the 2000s the case for nuclear power had strengthened as concerns grew about the availability and security of coal and gas and about UK greenhouse gas emissions. A White Paper in 2003 had confirmed that companies wanting to build nuclear power stations would be prevented from doing so. In 2008 the then (Labour) Government published a nuclear White Paper, Meeting the Energy Challenge, in which Gordon Brown stated:

‘The Government has today concluded that nuclear should have a role to play in the generation of electricity, alongside other low carbon technologies. We have therefore decided that the electricity industry should, from now on be allowed to build and operate new nuclear power stations, subject to meeting the normal planning and regulatory requirements. Nuclear power is a tried and tested technology. It has provided the UK with secure supplies of safe, low-carbon electricity for half a century. New nuclear power stations will be better designed and more efficient than those they will replace. More than ever before, nuclear power has a key role to play as part of the UK’s energy mix. I am confident that nuclear power can and will make a real contribution to meeting our commitments to limit damaging climate change.’

However, it was clear that the government was not proposing a return to the days where, through some public body like the CEGB, it would actually build, own and operate power stations. The decision on new build would be taken by commercial companies operating in the competitive electricity market: Government’s job was to remove unnecessary bureaucratic obstacles (notably in the fields of planning and licensing, which could add years to nuclear construction projects) and create a stable marketplace for those decisions.

Post-2010 Election: Electricity Market Reform

A major development in policy came with changes to the electricity market announced in December 2010. Electricity bills after the implementation of EMR are expected to be, on average, lower than they would have been without reform in the period up to 2030 - Electricity Market Reform (EMR) is vital to deliver urgently needed new low carbon generation. Key elements include:

  • Greater long term certainty around the additional cost of running polluting plant through a carbon price floor.

  • Long term contracts for low carbon generation to make clean energy investment more attractive still. Through a proposed ‘contract for difference’ Contracts for Difference are intended to provide a transparent and durable mechanism that will:

    1. Give long term price stability for consumers, protecting them from high or volatile fossil fuel prices.
    2. Co-exist with the existing power market based around fossil fuels.
    3. Offer long term revenue stability for investors, reducing capital cost, thus enabling investment to come forward for the benefit of the consumer.
  • Additional payments to encourage the construction of reserve plants or demand reduction measures (so-called ‘negawatts’) to ensure the lights stay on. A Capacity Mechanism will ensure there remains an adequate safety cushion of capacity as the amount of intermittent and inflexible low carbon generation increases.

  • A back-stop to limit how much carbon the most dirty power stations - coal - can emit. An Emissions Performance Standard will reinforce the existing requirement that no new coal is built without carbon capture and storage.

Other key developments

  • The European Pressurised Reactor (EPR) – the design to be built at Hinkley Point C in Somerset and Sizewell B in Suffolk – has successfully completed the Generic Design Assessment process. This is assessed by the UK’s independent regulators, the Office for Nuclear regulation (ONR) and the Environment Agency (EA)

  • The publication of a National Policy Statement in July 2011, including a clear statement from government that it ‘believes that energy companies should have the option of investing in new nuclear power stations. Any new nuclear power stations consented under the Planning Act 2008 will play a vitally important role in providing reliable electricity supplies and a secure and diverse energy mix as the UK makes the transition to a low carbon economy.’ Eight sites were identified as suitable for nuclear new build and the measure was passed in parliament by 267 votes to 14.

  • Through the Committee on Radioactive Waste Management (CoRWM), setting and moving to implement a national policy on the management of radioactive wastes.

  • The purchase of Horizon Nuclear Power by Hitachi Ltd, with a memorandum of understanding (MOU) being signed with UK companies Babcock International and Rolls Royce

  • The ONR granted a site licence for a new station at Hinkley Point C, the first new site licence for a UK nuclear power station in 25 years

  • EDF Energy was granted planning permission for the site at Hinkley Point C in March 2013.

  • The launch of the Government’s Supply Chain Action Plan, designed to ensure that the UK supply chain is competitive and ready to deliver the nuclear new build programme

EDF Energy announced 7 year life extensions for power stations at Hinkley and Hunterston. These nuclear plants will continue to provide affordable, reliable and low carbon electricity for around 2 million homes until 2023.

 

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