Business

U.K. Faces Harder Route to Net Zero With Nuclear Plans in Danger

Today News ||

Article content

(Bloomberg) — The U.K.’s nuclear new-build program looks in danger of unraveling, potentially opening up a supply gap that must be filled with low-carbon power if the country is to meet ambitious climate targets.

The government is looking at ways to exclude China’s state nuclear company from future power projects, a move that could imperil two proposed plants in eastern England. With several existing reactors closing early and demand set to boom, it needs to figure out how to plug that gap without increasing emissions.

Advertisement

Article content

“Net-zero is still possible but it’s harder,” said Guy Newey, strategy and performance director at researcher Energy Systems Catapult. To electrify heating and transport, “you’re going to need an electricity system which is at least twice as big as the one we have now, and one very important characteristic of nuclear power is it produces a lot of terawatt-hours.”

The government’s potential removal of China General Nuclear Power Corp. from future U.K. ventures could undermine confidence in the atomic-power industry at a time when decarbonization is moving up the political agenda ahead of key climate talks starting in October.

CGN announced a partnership in the U.K. with Electricite de France SA in 2015, with plans for three new reactors — Hinkley Point C and Sizewell C, led by the French company, and Bradwell B, led by the Chinese. Hinkley is already under construction.

Advertisement

Article content

Bradwell, with CGN at the helm and a Chinese reactor design, was always going to be politically difficult. And last year, when the government announced a ban on Huawei Technologies Co. from 5G mobile networks, speculation grew that China’s involvement in Britain’s nuclear sector would be next to face curbs.

Carbon Capture, Hydrogen

Together, Sizewell and Bradwell would provide 5.5 gigawatts of capacity, a good chunk of stable back-up for the U.K.’s rapidly expanding wind generation offshore. Alternative clean-energy options include natural gas with carbon capture, hydrogen power and small modular reactors, or SMRs, but none of these are commercially viable yet.

“If nuclear is looking harder, the government needs to prioritize investment in other options to keep net-zero in sight,” said Josh Buckland, a director at consulting firm Flint Global.

Advertisement

Article content

The government says it’s committed to SMRs, which are quicker and cheaper to build than regular reactors, but financial backing is needed. The most advanced project is being developed by a Rolls-Royce Holdings Plc-led group which says it needs 2 billion pounds ($2.76 billion) to move forward. It would take almost seven such reactors to produce the same amount of power as Sizewell.

Financing for large atomic power stations, which can cost more than 20 billion pounds, is one of the biggest challenges for the sector. Wind farms need a fraction of that investment and can come together in less than five years.

Risk to Projects

RELATED:  US blackouts leave 4m without power during harsh winter blast

Hinkley Point C, in southwest England, is likely to go ahead since it’s already being built. Sizewell C, on the east coast, is in the planning approval process. The government said in December it was in talks with EDF about financing for the project, though such discussions may now have paused while the implications of removing CGN are considered.

Advertisement

Article content

Bradwell’s Chinese reactor design has been stuck in the U.K. approvals process since 2017. It was intended to showcase Chinese technology in Europe, and CGN’s U.K. Chief Executive Officer Rob Davies said last year that the company would be prepared to self-finance the project to get it built.

The government’s potential move to cut out CGN “certainly makes delivering nuclear a more complex task,” Flint Global’s Buckland said. “Sizewell will require alternative sources of finance, something that is far from straightforward in the nuclear sector.”

The government’s Department for Business, Energy and Industrial Strategy said all nuclear projects are “conducted under robust and independent regulation to meet the U.K.’s rigorous legal, regulatory and national security requirements.” Atomic power still “has an important role to play in the U.K.’s low-carbon energy future,” it said in a statement.

A separate, long-planned U.K. nuclear project was shelved last year after Japan’s Hitachi Ltd. exited the development, turning down the most generous support package the government had ever offered.

©2021 Bloomberg L.P.

Bloomberg.com

In-depth reporting on the innovation economy from The Logic, brought to you in partnership with the Financial Post.

    Comments

    Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

    More Economy Business News Updates of Today Check Below

    Today News || Business Today || World News || Headlines Today || Health || Technology News || Education News

    Source

    Tags
    Show More

    Related Articles

    Back to top button
    Close