Cutting the costs of new nuclear power plants
6 November 2019
Managing Director, Nuclear Development
Cross party support to introduce a legally binding net zero emissions target by 2050 has cemented the UK’s position as a leader in the fight against climate change. We now need to deliver it, with reductions in CO2 emissions from electricity production enabling reductions in heat and transport in a way that is affordable.
According to the Committee on Climate Change, the independent body preparing the UK against climate effects, we need to quadruple low carbon production in order to deliver ‘net zero’ by 2050, through a combination of ‘intermittent’ renewable sources alongside ‘firm’ low carbon generation.
UK government has confirmed its commitment to low carbon nuclear electricity on the basis that the cost can be reduced. We accept the challenge and we think it can be met.
Falling costs for future wind energy projects are good news for consumers. Britain will need a big expansion in renewables if it is to cut emissions to ‘net zero’.
We also need electricity when the wind doesn’t blow and the sun doesn’t shine. Nuclear offers reliable, low carbon power to complement renewables and deliver an affordable system where the risks of intermittency are minimised.
Experience and repetition have enabled the offshore wind industry to drive down construction costs and the cost of financing construction. Studies show that the repetition effect also applies to nuclear. Countries building series of identical reactors find they progressively become lower risk, and therefore cheaper to build and finance. That is already the experience at Hinkley Point C where we are building a UK version of the EPR reactor. Building the second of two identical units at Hinkley Point C is already proving faster and easier than building the first.
Hinkley Point C is the start of a pipeline of new nuclear projects that Britain needs to build. Our proposed project, Sizewell C, will be a close replica using the same design, workforce and supply chain. Evidence from the Energy Technologies Institute shows this is the best way to bring down the costs of building a nuclear power station.
The reduction in risk of building a repeat design lowers the costs of finance. The proposed regulated asset base funding model for Sizewell C widens the possible pool of investors by offering steady returns through construction into operation. Government published a consultation in June exploring how the model could be applied to nuclear development in June.
The twin effects of cheaper construction and cheaper finance mean the cost of building a new nuclear power station at Sizewell C can be competitive with the total costs of alternatives, even as low carbon electricity prices fall.