Nuclear Energy is controversial.
Nuclear has been a source of energy in the UK for 50 years, generating electricity safely and reliably with minimal impact on the environment. While the public may be willing to accept the construction of new nuclear plants in general terms, the willingness of the individual to accept the proximity of potential new builds is doubtful. The public does not understand the issues surrounding nuclear power and has a strong sense of risk.
Currently, there are seven sites in the UK, containing 15 operational reactors which consist of 14 Advanced Gas-cooled Reactor (AGRs) and one Pressurised Water Reactor (PWR). These have a capacity of 8.9 GW, representing approximately 17% of total UK electricity needs.
In 2003, it was predicted that the last Magnox reactor, Wylfa, would be turned off by 2011 and the last AGRs, Heysham 2 and Torness, would be switched off by 2023, amounting to a significant deficit in the UK’s supply of electricity. This leaves one PWR, Sizewell B, as the UK’s only operating plant after 2023.
As of 2016, the entire AGR fleet had their life extended, meaning Heysham 2 and Torness would now close in 2030. These extensions have provided some time to find alternatives or build new plants, but the fact remains: by the end of the next decade a significant proportion of the UK’s nuclear fleet will stop producing electricity. This creates a problem.
Three key players have proposals to construct new reactors in the UK: EDF, Horizon Nuclear Power and NuGeneration. EDF, which currently owns and operates the UK’s entire nuclear fleet, plans to build Areva’s European/Evolutionary Power Reactor (EPR) at Hinkley Point C in Somerset.
This development, primarily financed by the French company, would bring a 3.2 GW increase in the UK’s capacity. However, the remaining investment would come from CGN Group, a Chinese firm, and this is supposedly the reason why Prime Minister Theresa May is delaying the go-ahead for the project, to review the plans and assuage concerns stemming from when she was Home Secretary.
Is it unreasonable for the incumbent Prime Minister of three weeks to want to understand the consequences and connotations of such a deal? China seems to think so, claiming the “suspicious approach that comes from nowhere to Chinese investment” is unfathomable. This warning from China calls into question the UK as a viable investment opportunity on an international scale.
In a post-Brexit economy, it is not farfetched to assume anxiety will overcome the newly formed cabinet on such a substantial infrastructure project. But is this a decision that the British government can afford to make? Or is the ball in China’s court?
Hinkley Point C is a paramount project for the UK, generating considerable renewable energy, in addition to creating thousands of jobs during construction and operation, enabling the economy to increase output, income and growth. It seems a foregone conclusion that this project will, and more importantly has to, go ahead.
Downing Street is not providing an explanation for the delays, but it seems unlikely that construction will not proceed at all. While a delay to review the plans is not unreasonable, the time scale of this delay is somewhat concerning. Moreover, the warning from China draws the attention of not only Europe, but of all existing and potential trade partners to the wavering concerns of this infant cabinet, and alluding to possible hostility toward foreign trade.
This delay could increase the uncertainty within the UK economy, damaging international ties and reputations, which could counteract any benefits of Hinkley Point for the economy. The effects could reach the general public, translating into increased energy bills, reducing disposable income and compounding on existing problems for the economy.
Any further delays will hinder the UK’s capability to meeting the electricity demand of an ever increasing population. Transparency will be essential if the government doesn’t want this fiasco to deter any future developments with foreign investors, with Eurasian (Horizon owned by Hitachi and NuGen-Westinghouse) partnerships forming the main proposals for future plants. The sooner this can be resolved the better – once the Brexit proceedings start it is unpredictable how these European utilities will view the UK as an investment opportunity.
Despite the fact that Britain voted Leave to ‘take back control’ from Brussels and the European Union, within the energy sector European intervention and investment is inevitable and indispensable.