After 20 years of dithering, the British government, or at least the rump end of the outgoing government, has decided the country needs 10 new nuclear power stations starting with the first later in the next decade. Power generation in the UK is a private sector enterprise so the governments’ assistance comes in the form of subsidy and planning. The current announcement is that planning will be fast tracked from the previous 6-7 years to 12 months. Ten sites have been pre-approved with the planning process streamlined.
The announcement has been widely applauded by the mostly foreign owned power generators in the UK. French and German power companies dominate the UK’s open generation market while many of the same companies have recently withdrawn from the government’s plan to subsidize a new generation carbon capture clean coal fired power station. On offer was $1.6bn of taxpayers money but one after another the foreign consortia have withdrawn, presumably on the grounds that they do not believe the untested technology to be economically viable.
The UK has an unenviable problem. To meet carbon emission commitments and replace aging power production capacity, the UK needs to replace 55% of its total generating capacity over the next 15 years. The government (at least this government) is committed to make 20% of that from wind, tidal and solar but many feel that target is unrealistic and anyway does not solve the problem of what happens when the wind doesn’t blow and the sun doesn’t shine it happens even in Britain! Base load power production is still required hence the commitment to nuclear.
Graph Courtesy of Guardian.co.uk
The cost is estimated at some US$330bn if Britain is to achieve the combination of renewable and nuclear that is deemed necessary to achieve commitments to carbon emission reductions by 2020. That bill will fall on the door mats of the consumer in the form of higher energy costs. Always assuming of course that the power generators can secure the equipment to build the nuclear plants in the first place; a disturbing article in the Telegraph suggests access to critical steel castings required for the reactor core may be a major bottle neck. 90% of the world’s supply comes from Japan Steel Works in Hokkaido. The firm is currently geared up to make casings for 5.5 reactors a year and is investing to increase this to 12. But China alone is expected to complete 22 by the end of next year and has another 132 planned. India, France, Poland, Italy and others are also already in the queue so quite where the UK will come remains to be seen. There has been discussion of new forging presses being built in the USA to meet global demand for this specialist application but when or if they will be available is uncertain.
So whether Britain’s decision to embrace nuclear and shun carbon capture clean coal is going to be repeated elsewhere remains to be seen but the economics driving the decisions in the UK are unlikely to be fundamentally different in other OECD markets.