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Britain is trying to launch a nuclear renaissance on the cheap. It can pioneer small modular reactors, or push its world-class breakthroughs in nuclear fusion, or make a giant national bet on a fleet of old-style reactors, but it cannot do all three under the current fiscal regime without spreading itself too thin.
The Government’s nuclear plans are a formula for scattering taxpayer money in an attempt to keep everybody happy, without reaching critical mass on any front. It risks ending in a familiar British U-turn when funds run short.
Given that the Treasury plans to cut public investment to the bone by the late 2020s (to 1.8pc of GDP), the strategy is not credible. Labour has been so coy about its plans that we are left no wiser about what it would do.
The rule of thumb for big gigawatt nuclear power is that you must either commit hard, or leave well alone. It takes a fleet of new reactors to reap serious economies of scale, the strategy pursued with success by South Korea, or by France in the 1970s.
“You have to do this properly. You need several projects of two reactors each of the same design to get this going,” said Dr Tim Stone, chairman of the Nuclear Industry Association.
The worst policy is to dabble in ones or twos, as seems to be happening with the over-complicated EPR plant at Hinkley Point C, now expected to cost £31bn-34bn (2015 prices) with a further delay of four years, followed by something similar at Sizewell C.
It is true that Hinkley’s exorbitant strike price of £128 MWh (inflation-adjusted) is not a fair reflection of cost. Each successor should be cheaper. The strike price expires after 35 years. “Modern reactors have a design life of 60 years, but they could well run for 80 or even 100 years. That cuts long-term energy costs dramatically,” said Dr Stone.
Made in Britain: The Pathway to a Nuclear Renaissance, a joint report by the Commons and the Lords, spells out what a coherent strategy should look like. The Government should outline the full list of projects to 2050, make it a critical national priority, pony up real money and require the use of British supply chains.
Scale would make Big Fission cheap enough to be competitive. But the power would not arrive until after 2035, by which time offshore wind coupled with gas peaker plants will already be the backbone of the system, and the UK will have decarbonised the grid – a glaring contradiction flagged by the Environmental Audit Committee.
So unless the strategy is to export nuclear power to Europe via a nexus of yet-unbuilt interconnectors, or use it 24/7 to make green hydrogen – both plausible – we will often have a surfeit of inflexible baseload power, leading to a host of headaches.
The larger question is whether Big Fission will be yesterday’s technology by then. Bill Gates’s TerraPower is already far along with its sodium-cooled SMR in the US, claiming that it will halve nuclear costs and supply dispatchable power at just $50-$60 MWh.
The 345 MW reactor ticks a lot of boxes. It operates at atmospheric pressure. It can flip from base-load to “load-following”. The chloride coolant reaches extreme heat, which can be stored in molten salts as a battery. “The energy can be used to power the grid at peak demand when the wind isn’t blowing, or the sun isn’t shining,” said the company.
Canadian start-up Terrestrial Energy, developing the world’s first SMR molten salt reactor to pass the Phase II stage of regulation, is in some ways even better. “It supplies heat at almost 600 degrees, which lets us generate electricity 50pc more efficiently than a conventional nuclear plant,” said Simon Irish, the chief executive.
“The industrial-grade heat is valuable: we can use it to make green hydrogen and help decarbonise all kinds of industrial processes,” he told me.
“We can ramp the plant up and down just by taking the heat out and storing it in molten salts. It responds instantly. The reactor is not picky, so we will eventually be able to use spent nuclear fuel,” said Mr Irish, one of several British nuclear specialists to decamp to Canada, the Mecca for nuclear start-ups.
Unlike TerraPower, his 400 MW reactor can use standard low-enriched uranium (below 5pc) rather than needing highly enriched HALEU fuel, which depends on Vladimir Putin.
“There is no supply of HALEU outside Russia, and you are talking about billions to set up a supply-chain. You have to face the constraints of the real world,” he said. Terrestrial is also targeting $60 MWh at scale.
The 40 or so “fourth-generation” SMRs being developed worldwide are as yet untested. Costs may spiral higher. Some will fail. But what we know is that big light-water reactors are both very expensive, and limited in what they can do.
They cannot easily be dialled up and down. They operate below 300 degrees, at a low thermal efficiency near 30pc, and do not supply industrial heat. They must be pressurised at great cost. They do not use nuclear waste from Sellafield, the world’s biggest depository of radioactive sludge. They add to it.
It is disheartening that the UK more or less organised its SMR selection contest to ensure that every candidate was a mini-version of pressurised water reactor technology.
“The process in the UK has been captured by vested interests. The Government left things too late and then put huge pressure on bureaucrats, who jumped on what looked like a quick solution,” said one insider.
Rolls-Royce is the front-runner. Its 470 MW reactor relies on home-grown technology, aiming to locate 80pc of the supply chain within the UK. The parts can be mass produced in factories. Done in volume, this could slash costs. “We need to see them rolling off the production line like Nissan Micras,” said Dr Stone.
They can be exported worldwide and earn revenue. I wish them all the best. But Rolls-Royce is unlikely to proceed unless the state guarantees that 12 will be bought. That takes money.
The Government is in parallel spending £385m on the next wave of fourth-generation SMR technology, but this extra pillar at times feels like an after-thought. My fear is that it will be squeezed out by old fission once fiscal austerity starts in earnest.
There is a real chance that advanced SMRs and nuclear fusion will radically change the global energy equation in the 2030s. Britain is a cutting-edge global player in both fields. That is where the British state should concentrate the full force of its nuclear effort.
Britain could be a world leader in nuclear power, but not with old technology
Scattering taxpayer money in a bid to keep everyone happy is not a coherent strategy