Key Points from UK Parliamentary Office Science and Technology: Nuclear

Ali Downes, Doug Parr, Richard Outram, Steve Thomas and I involved, input, and reviewed key Dec 2022 UK Parliamentary Office Science and Technology (POST) publication on nuclear

Turns out to be an important doc.

OK, doc rehearses some arguments from pro-nuclear stakeholders they interviewed and who also reviewed – however the following are direct quotes.

“The coastal location of UK nuclear power stations makes rising sea levels and storm surge flooding a future risk that will need to be considered.” 

“Nuclear power has high up-front capital costs and long construction periods, necessitating significant borrowing that makes the overall cost highly sensitive to borrowing rates and construction uncertainties.”

“This is compounded by the cost of capital during construction (subject to the risk of overruns), which for PWRs in Europe and North America makes up at least 25% of construction costs. Climate change has also been highlighted as increasing the investment risk profile of nuclear.”

“In 2006, the company designing the EPR (since bought by EDF) claimed the price of electricity for the yet-to-be-built EPR would be £24/MWh. In 2012, to incentivise investment in Hinkley Point C, a guaranteed, index-linked Contracts for Difference (CfD) strike price† of £92.5/MWh was awarded by the Government for the electricity generated over the 35 year contract.113 At the time, the rate of return was estimated at 9%, but in 2021 it had fallen to 7%, with further delays likely causing further

reductions. A CfD mechanism is unlikely to be used again due to exposing the developer to all the construction risk.”

“Only partial demonstration of the fusion process has been achieved. Extraction of useful energy, if possible, will entail tackling significant engineering challenges and

further investment.”

“Although underestimation of cost is a common characteristic of large electricity infrastructure projects, nuclear has had some of the largest percentage cost escalations, with projects between 1969 and 2005 being overbudget by 117% on average.28 This is despite nuclear specific elements of building a reactor being a minority of construction costs, which for the European Pressurised Reactor (EPR – see Building Gen III reactors) makes up 18%.”

“Analysis has shown that design changes and poor project management can cause costs to increase through a nuclear programme.”

“Globally, EPRs built in China43 and Finland (with another near completion in Flamanville, France) have incurred significant cost overruns and time delays of up to 12 years, and also experienced problems after coming online.”

“The bankruptcy of Westinghouse cancelled talks in 2019 to build an AP1000 at Moorside, Cumbria,63 but they have since resumed for Wylfa, Angelsey. Hitachi-GE’s proposals for the Advanced Boiling Water Reactor (ABWR) at Wylfa were abandoned in 2019 after spending £2 billion on the project”.

“Smaller designs (SMRs) reduce the benefits from economies of scale. The economics of this trade-off against ‘economies of mass manufacture’ have yet to be demonstrated, with cost reduction estimates approximated from other industries. The desire to deploy multiple units quickly, reducing the time for analysis, testing, and demonstration, has been highlighted as contributing to problems in the US deploying Gen II reactors. As ANT designs will require significant development, it should be noted that nuclear costs almost always increase during the design development process.”

“The NuScale SMR has received up to $1.4 billion from the US Government for the first reactor due to come online by 2030. However, even with this subsidy, initial cost estimates will be exceeded significantly as it was expected to be ready by 2016.”

“Nuclear stakeholders claim existing reactor types can, to a limited extent, moderate generation to match demand depending on the reactor type. However, this has not substantially been observed in practice.”

“Currently, 65% of the energy produced by nuclear power stations is wasted as heat.”

“The UK’s future electricity system will include large amounts of variable wind and solar, with a less certain capacity of nuclear.”

“Over-investment (in nuclear) could divert resources from other low-carbon measures that would be faster and more economical to deploy at scale if promised nuclear cost reductions are not realised. Optimism bias‡ has historically contributed to consistent underestimations of nuclear costs and construction times. Stakeholders who questioned the role of nuclear highlighted that, in 2020, BEIS had nearly twice as many people working on nuclear than renewable energy, arguing that committing even more resources to new nuclear capacity could divert valuable resources away from technologies that should play a more prominent role in future energy systems.”