Those who claim nuclear is dead, at least for Europe, because of its high costs and lack of public support are wrong, writes Tim Yeo, Chairman of the pro-nuclear group New Nuclear Watch Europe (NNWE). Despite recent financial troubles besetting certain parties in the nuclear sector, there are competitive vendors and competitive projects out there. Key for European countries considering building new nuclear plants is to choose the right technologies.
By far the greatest criticism of nuclear pertains to its cost. As a result of the strike price of £92.50/MWh the UK government has agreed for Hinkley Point C, the impression has been created that nuclear power is expensive. Yet there are many examples of new build nuclear power being economically competitive.
Lying at the heart of the issue is technology choice. NNWE has long argued that in order to secure the advantages of nuclear power for their citizens, governments must take care in choosing the technology and vendor that suits their particular requirements. When it comes to new build we believe that the risk of significant cost can be dramatically reduced by choosing designs that have been previously built elsewhere and have a track record of safe commercial use.
The most cost-competitive technologies in the next few years are likely to be supplied by foreign vendors
Paks II in Hungary, recently approved by the European Commission, and the Hanhikivi project in Finland are examples of much cheaper and competitive nuclear technology. At €55-60/MWh these nuclear plants, both built by Russian supplier Rosatom, are just over half the price of Hinkley Point. Both projects are so-called Generation III+ nuclear power stations.
Rosatom is the only vendor in the world that has the latest nuclear technology (generically known as Generation III+ technology) up and running and the cost benefits of choosing a proven technology are clear. Other vendors of Generation III+ technology, for example, Areva, with its EPR design, which is used in Finland’s costly Olkiluoto project and will be used at Hinkley Point C, are still first-of-a-kind and have a price tag to match.
In the United Arab Emirates, the first of four new Korean nuclear reactors, built by Kepco, will start producing electricity within the next 12 months, at a price that will be cost-competitive with other forms of electricity generation. And China’s Hualong One reactor, currently undergoing the UK’s rigorous Generic Design Assessment (GDA) process required by the nuclear regulator, will not be far behind.
The general message to European countries planning new build nuclear projects – these include Bulgaria, Czech Republic, France, Romania, Slovakia and the UK – is to commit to the technology and to protect the projects from being de-railed by anti-nuclear sentiment. One has only to look at Germany for the stark reality of saying no to nuclear – rising or flat carbon emissions, increased dependency on imported gas and a renewables revolution that is out of control. If Europe is serious about its climate change commitments, it simply cannot afford for new build nuclear projects to falter.
New nuclear projects in Europe should be encouraged if they meet the key principles of affordability, reliability and value creation. The most cost-competitive technologies in the next few years are likely to be supplied by foreign vendors, in particular the three mentioned above. Therefore, it is important for European countries to create conditions that encourage foreign investors and vendors to participate in European energy markets.
The industry needs to get better at exploiting the economies of scale which have transformed the competitiveness of some renewable technologies
In that way, investment in new nuclear capacity should bring substantial economic benefits to host nations during both the construction and operational phases. Investment in nuclear will not only guarantee secure and affordable low carbon electricity, it will also give a boost to the economy. By contrast, the consequences of delaying new nuclear build will mean slower economic growth, fewer high quality jobs, and a less reliable power supply.
At the same time, the need for the nuclear industry to demonstrate its cost competitiveness is as strong as ever, especially against a backdrop of low fossil fuel prices and the falling cost of renewables. The industry needs to get better at exploiting the economies of scale which have transformed the competitiveness of some renewable technologies. Something which is far more challenging for nuclear, when an individual plant costs a thousand times more than a solar farm or a wind turbine, than for many other parts of the energy industry.
The good news is that vendors of proven technology are demonstrating they can deliver nuclear power at competitive prices for electricity produced. There is a choice of nuclear technologies, and the benefits in terms of cost, security of supply, tackling climate change and above all safety are clear. Nuclear does not cost the earth. Governments should not shy away from the nuclear option – it is simply a matter of making the right choice.\
Tim Yeo is chair of New Nuclear Watch Europe and the University of Sheffield Industrial Advisory Board for the Energy 2050 initiative. He is also a Board member of Eurotunnel and Chairman of AFC Energy. He is a former Minister of State for the Environment, Shadow Secretary of State for Trade and Industry, and was Chair of the Environmental Audit Select Committee from 2005-2010 and then Chair of the Energy and Climate Change Select Committee from 2010-2015.
Tim founded NNWE at the end of 2014 to help ensure nuclear power is recognised as an important and desirable way for European governments to provide affordable, secure, low carbon energy and help to meet the long-term energy needs of their citizens. He is also a considerable champion of renewable power believing that nuclear and renewables are an effective energy mix. Tim regularly speaks at energy events and is also active in the media and blogs regularly on nuclear issues at www.newnuclearwatch.eu.
For more information on the economics of nuclear power, see this recent report from the World Nuclear Assocation (WNA) and this article by Milton Caplan, Chair of the WNA Economics Working Group responsible for the report.
For a good, simple overview of what “advanced” nuclear reactors are and why they are safer and cheaper than existing reactors, see this article by Michael Fitzpatrick of Coventry University.