Time for action
25 March 2021
Senior Deputy General Secretary
Back in 2019 I made the case for New Nuclear Watch Institute that a shift towards greater employment in high productivity sectors like nuclear would be central to closing the UK’s productivity gap. Sixteen months on, and with an economy ravaged by the Coronavirus pandemic, it is even clearer that a new build programme could help to underpin a sustainable recovery based on high quality employment.
It is therefore hugely disappointing that, despite some positive signals in the Prime Minister’s 10-point plan and the Energy White Paper, so much of the debate remains focused on the price per MWh for electricity generated from Hinkley Point C. That this is a consequence of the financial model adopted rather than an inherent cost premium for nuclear is conveniently overlooked. Further, it is a model that the National Audit Office has said should not be used for future projects.
And with good reason: The cost of capital amounts to 50% or more of total project costs. It is an unsustainable approach and EDF Energy are not seeking to replicate it.
At last, the government has acknowledged that a level of direct investment would help to slash construction costs by at least one third. This is not a radical agenda. Of 14 countries currently constructing new nuclear plants, ten are using government financing.
By contrast, the UK is still waiting for a clear commitment to implementation and clarity on the funding model.
So it is important to be clear about the cost of inaction, or further procrastination, including the negative consequences for regional economies and for the UK’s drive to achieve Net Zero.
Delivery of a new nuclear fleet will involve £ billions of investments, spread across the UK, and it will create tens of thousands of jobs and thousands of apprenticeships.
For example, 40% of workers involved in the construction of Hinkley Point C are local, with £4 billion invested in the wider South West economy. The Horizon project would have delivered 8500 jobs in construction, 850 long-term operational jobs, 700 apprentices and over £5 billion of UK supply chain opportunities. If given the go-ahead, Sizewell C will transform the prospects of thousands of young people in the Eastern region. A third of the peak construction workforce of around 2,600 people will come from the local area, with the local economy benefiting by at least £125 million per year during construction and £40 million per year during operation.
When it comes to Net Zero, my union strongly supports the growth of renewables. However the forecast rising demand for electricity as sectors such as heat and transport decarbonise confirms the continuing need for reliable sources of low carbon power as part of our core energy mix. As the Energy Systems Catapult has stated, alternative net zero scenarios that exclude new nuclear place the system under enormous stress and have significant costs and land-take implications.
Put simply, the case for new nuclear is as a driver of a high-quality green recovery benefiting regions across the UK. The price is part of a political choice, and 2021 is the year in which government must choose its course.