Blog

Nuclear and economic recovery

Tom Greatrex

22 May 2020

It is both hard, and easy, to believe the lockdown state that much of the country is still in – with relaxations around the edges – has been going for eight weeks now.

Without much of what helped form the rhythm of the typical week being available, time can simultaneously appear to drag and fly by. Warnings from the Chancellor, and economic statistics released over this period, have shown that the UK is already in what is a significant recession. Hardly surprising when the economy is all but closed down as a necessary public health response.

With the millions of people who are unable to work as a consequence having their salaries at least partly paid by the state, while economic activity has had the handbrake sharply applied, the amount being borrowed by the state has accelerated like Christopher Lloyd’s DeLorean.

The urgency of the situation has seen some urgency of action and attitude from government – for all of us who are habitually frustrated by the pace of activity, conscious avoidance of decision making and seemingly unrivalled expertise in finding some convenient long grass that seems to inhabit Whitehall officialdom, this has been a welcome development.

Of course, it has happened because decisions could not be put off further and politicians of all persuasions understand that there are some things where, whatever the ideologies they subscribe to, the population looks to government for support and leadership. It is hard to think of anything more true of that than arresting the economic consequences of a global pandemic.

As the weeks have gone on, gradually some have been able to return to work – and there were some, including across the nuclear estate, where work has continued throughout – the skies are appreciably noisier, there are more cars around and some businesses are beginning to ramp up again, with social distancing and additional hand sanitising a part of their new normal.

Yet for the economy to be rebooted, it is going to take much more than a gradual lifting of restrictions. That is understood by government, and we can expect to hear much more about the role of the state in staving off irreversible damage to sectors of the productive economy. That will become, I suspect, a part of the new normal too.

So why is this important for the civil nuclear industry? For three reasons, primarily:

  1. Ours is an economic sector which has a geographical footprint across the country, but most markedly in areas away from the south east corner of England. The economic impact which NIA publications and reports – such as the Activity Report – demonstrate is both significant and built on a foundation of skills and capability where the UK is well placed to drive economic activity and create and sustain long term jobs.
  2. The challenge of arresting carbon emissions and meeting the net zero target by 2050 remains. While COP26, as a focal point for 2020, has been postponed until next year, the political salience and environmental imperative of both the decarbonisation of our power system and zero emissions electricity being a greater proportion of our energy generation and use has not been diminished. A mixture of weather dependent and firm low carbon power generation will be required, with an increase in both a pre-requisite.
  3. The clock has not stopped over the last few weeks – it is as true five months into 2020 as it was as the new year started that the current nuclear fleet, supplying 40% of our low carbon power, with the exception of Sizewell B, will retire during the course of the current decade. A number of projects to replace that capacity are at various stages of development – but with the right impetus could begin to make a tangible contribution to rebooting the economy now while providing long term infrastructure which all reputable analysis shows is needed if net zero can be more than an aspiration.

Over the past few weeks, the NIA has been discussing these issues with government and others, and there is an understanding and appreciation that meeting the challenges of stimulating economic activity, renewing ageing infrastructure and enabling the net zero ambition to be achieved will not happen at sufficient pace by default. Indeed, this week there has been more public discourse about this – from the current edition of the Economist, a high level summary overview from Energy UK, and the NIA’s series of webinars with third parties – all concurring that the pace of activity from both industry and government can not slow.

Of course, there is always inertia, a chorus of often ill-informed naysayers will pipe up and some of those in positions of authority petrified of making a call may find it hard to adjust their mindsets – but those attitudes will need to be overcome.

Over the next few weeks, you will see much more on this from the NIA and our industry as we underline and emphasise the opportunity which now exists to really make some of the progress which has been lacking in recent times. Not just for the good of our industry and those who work in it, not solely to help drive the economy from the depths of the deepest and most sudden downturn in modern times but also to help equip society in a world where burning fossil fuels to generate electricity, heat homes and power transport, is as firmly in the past as the notion of a time travelling DeLorean.