Small Nuclear Power Plants Draw Support in U.K.’s Green Program
(Bloomberg) -- The U.K. government is championing small nuclear reactors as a key part of its decarbonization strategy in a move that left developers of traditional large-scale plants in limbo.
Prime Minister Boris Johnson’s government’s 12 billion-pound ($15.9 billion) strategy to green the economy included 500 million pounds for reactors that are a fraction of the size and cost of traditional nuclear plants. The aim is to encourage private investors to bring more capital into developing the technology.
Small modular reactors and advanced modular reactors are cheaper and quicker to build than big conventional stations like the Hinkley Point project Electricite de France SA has underway in south west England. While bigger reactors have been in use for decades, the smaller ones are being promoted as an alternative that may be quicker to deploy. Companies led by Rolls Royce Holdings Plc are working on 16 small nuclear reactors by 2050, and NuScale Power LLC in the U.S. is also bidding for work.
“The future for nuclear in the U.K. may be in the development of small modular reactors, which can be prefabricated and delivered to sites partly constructed,” said Tom Heggarty, principal analyst at Wood Mackenzie Ltd. This “should allow new nuclear plants to be delivered at lower cost, though the technology has a long way to go before being commercially proven.”
Small modular reactors have been promoted by the nuclear industry as a way to blend steady atomic generation with intermittent renewable energy. Advanced modular reactors operate at extremely high temperatures and the high-grade heat could be used to produce hydrogen, another of the government’s key areas of focus.
The government says it’s still “pursuing large-scale nuclear projects subject to value-for-money. To support this, we will provide development funding,” according to the plan published Wednesday.
There was little word in the plan about how the government will encourage further large-scale plants that could replace the generation of reactors due to retire in the next few years.
At the moment, EDF’s Hinkley Point plant is the only large nuclear reactor under construction and would be the first in more than two decades. It’s also seeking to build another plant known as Sizewell C, though it has said it can’t afford to shoulder the cost and risks alone. It’s looking to the government for support.
In recent years, the government put more emphasis on offshore wind farms as a clean-energy technology, leaving debate about how to fund big nuclear plants unresolved. Hitachi Ltd. pulled out of the Wylfa project in Wales earlier this year, leaving Sizewell and EDF as the only remaining large project.
“Sizewell C is the only large scale nuclear project ready to begin construction,” said Sizewell C managing director Humphrey Cadoux-Hudson. “When it gets the go-ahead, it will create thousands of jobs.”
The government said Wednesday it expects a large-scale nuclear power plant would support about 10,000 jobs during construction. EDF puts the figure at 25,000. The SMR program from the Rolls-Royce consortium Plc will add 40,000 jobs.
How best to finance a 20 billion-pound infrastructure project is a huge question for government. The uncertainty of which perhaps explains the absence of detail in the green plan. The government has suggested it will take an equity stake in the Sizewell project and is due to give its verdict on the Relative Asset Model soon.
More detail on the government’s plans for large scale nuclear is expected in the white paper, said Tom Greatrex, chief executive officer of the Nuclear Industry Association.
©2020 Bloomberg L.P.