Nuclear Investment Costs - Trouble on the Horizon?
The Governments plans for a new generation of nuclear power plants financed and constructed
by private companies without public subsidy seems to be proceeding to plan. However, a picture of sharply increased construction
costs with volatile and relatively low electricity prices are threatening investment in nuclear.
The problems with financing
new nuclear are similar in nature to other capital intensive energy projects such as off shore wind and carbon capture and
storage. The overriding need for large amounts of investment during the next 10 years in replacement energy generation and
improved energy infrastructure is leading to questions about both the effectiveness and affordability of the current
electricity market. the information on nuclear construction costs indicates that action to reform the electricity
market will be required before any final decisions to invest in new nuclear power are taken in 2011.
Nuclear costs - Trouble on the Horizon?
Energy Crunch in 2015 - the Future is Nuclear
It is clear that the conditions are in place for a squeeze on electricity capacity margins
which will come to a head in 2015. This capacity margin crunch will result from the almost simultaneous shutting down
of half of coal stations in response to EU sulphur emissions laws and the closure of the last Magnox and some of the AGR (advanced
gas-cooled reactors) nuclear power stations on grounds of age. Neither new renewable generators nor new nuclear will be built
in sufficient quantities and time to fill the expected capacity gap.
The shape of the Government's energy
policy is becoming clear but the funding of the huge amount of investment is problematic.
In a an article
on energy supply in IET News in June 2010, Tony Roulstone argues that the Energy Act of 2008 together
with the related Climate Change Act represent a sea change for energy strategy and identifies why the lights will not
go out in 2015. However, there are big decisions for the new Government in reshaping the energy market and major opportunities
for UK manufacturing resulting from the investment that have to made in electricity generation which will require investment
in R&D for the new clean energy sources - wind, clean coal and nuclear.
The article outlines both some
reasons and priorites for restarting investment in nuclear.
The Future is Nuclear
Re-constructing the UK Nuclear Industry
Much has been achieved in the last two years to prepare the UK nuclear industry
for the planned investment in new nuclear power stations.
Two groups of large European utilities have made public commitments
to a program of reactors and have announced possible sites.
Two up-to-date designs of nuclear reactor are moving through
the safety regulation process and a new infrastructure planning process and commission have been set-up. The questions of
resources and plans are beginning to become more real. However, the current progress is something like the 'phony
war' in 1939. lots of noise but little real action.
The critical questions of how the stations are to
be financed are dependant on changes to the UK electricity market, on which the energy regulator Offer is consulting. Not
until this is process complete and the reactors are cleared for build in 2011 will contracts be let.
In the near term
and once the election returns a Government with a fresh mandate, the key issue financing can be addressed
and we will begin to see tangible rather than prospective evidence of engagement and of commitment.
The acumen7 'Insight' by Tony Roulstone (attached) develops these ideas together
with its ability to contribute to the re-construction of the UK nuclear industry.
Insight into Nuclear - Spring 2010
Developing an University Nuclear R&D
Strategy
Nuclear R&D in the UK has almost stopped and the capability for development
run down to a low level. With the re-invigoration of nuclear energy driven by the needs of Climate Change and Energy Security
the scope for universities to develop new strategies for R&D is examined and some points of nearer term growth are identified.
During the next two or three decades, most of the nuclear power stations built will have Light
Water Reactors (LWR), therefore the most important priorities are to support of LWR continued improvement and to
develop new fuels based on thermal breeding from Uranium or from Thorium. Once the new LWRs are established, new designs
of reactor such as those identified by Generation IV International Forum, including perhaps an Accelerator Driven
Sub-critical Reactor, or fusion reactors based on the latest technology fusions demonstrator - ITER, will become more important.
In the attached presentation(link below), Tony Roulstone develops some of the ideas relevant to defining
a strategy for university R&D.
Nuclear R&D Strategy Considerations
Nuclear New Build - Industry Update
15 years after the completion of Sizewell, the nuclear
industry in the UK is on the move:
- Getting new designs licenced, and - Preparaing the construction teams and capabilities for what will prove to be one of the largest
and most challenging construction programs of the first quarter of the 21st century.
Tony Roulstone describes (see
link below) the progress made and some of the current concerns of the UK nuclear industry.
UK nuclear power program progress
Climate Change Solutions
Climate Change is the topic of the moment. Solutions that are being promoted based essentially
on setting global and national targets and then seeking to deliver these through either a mixture of regulation
or compulsion, or by market-based differential pricing of energy. The nature of the solutions has had much less study and
the routes and steps to be taken are not mapped out.
The paper (link below) describes a different approach
based on scenarios, with analysis which includes the real world considerations of risk and the concrete steps required
to develop the options which are currently not available. This approach will provide a clearer view of the ways in which Climate
Change can be tackled in a world where markets are imperfect, and do not have the foresight to deal with a problem that has
huge lead-times and is of such crucial importance.
Approach for Climate Change Solutions
Nuclear Power is making Progress
It may be hard to sense but nuclear power is making progress. Since the Energy Review of 2006, much has been accomplished
even if the tangible evidence of achievement – ‘green shoots of progress’ are yet to be seen.
Much of
the progress is in line with the report – Accelerating Nuclear Power of 2007 (which was written with a working group
from acumen7) – perhaps without the coherence and the urgency that was proposed at the time.
Activity
is being coordinated by the new Office of Nuclear Development within the new Department for Energy and Climate Change.
Establishing this type of focus
was one of acumen7’s main recommendations. Other ideas that we promoted for clearer industry involvement, targets
and plans for nuclear generation and a minimum carbon (or electricity) price, or other form of funding support, are yet to
be taken up by HMG.
As described in (Making Progress - link below) we believe that these further
measures would provide the sorely needed impetus to address the important, linked problems of Climate Change and Energy Security.
Making progress
UK
Energy Policy - 'Quarter Speed Ahead'
In
January, after almost a year of consultation and deliberation, the UK Government agreed to endorse nuclear power. However,
in the White Paper the endorsement was so hedged around with conditions and doubts that it amounted not to the “full
steam ahead” for which the industry had hoped; rather it is a limp “quarter speed ahead”. Progress with
the construction of any new nuclear power stations in the UK will be very slow.
As agued
in the paper below, more is required in the areas of economics, targets and mechanisms to accelerate nuclear new build.
This paper
was published in Nuclear Energineering International April 2008.
Quarter Speed Ahead
Energy Choices - January 2008
A paper on the decisions UK Government will have to make once they
have signalled the freedom for the private sector to invest in nuclear power. The decisions will affect: How to make
attractive prvate sector investments to replace old electricity generators by low-carbon sources such as nuclear; Small volumes of competing reactor designs and utilities may lead to 15% higher
electricity prices. Scope for nuclear contribution
to grid has a limit closer to 60% of the installed capacity, than 20% at present.
These
decisions should recognise the major scope for replacing of dirty fossil fuels with clean energy technologies such as
nuclear. Nuclear Future
Vol 4 Issue 1 January 2008 - Tony Roulstone
Choices
Agenda for Urgency - July 2007
acumen7 analyzes
the state of play in the stakes for building new nuclear power stations. This is done in the context of the Government's
commitment to address climate change and the security of energy supplies and it makes proposals for action: Low Carbon & firm generation capacity is urgently
required; UK needs to secure and diversify its energy supplies; Nuclear generation is the only technology that can
satisfy these needs, but current generating capacity is nearing the end of its life & will take many years to replace; Commercial and institutional conditions are not in
place for major new nuclear build; Global & UK industrial capability to build new stations is weak; Joint task force should put in place the conditions for new build & ensure
the programme is delivered.
Agenda for Urgency - Executive Summary
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