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Government infrastructure committee says UK should scale back nuclear plans in favour of renewables

10 July 2018

Government advisers have told UK ministers to back only a single new nuclear power station after Hinkley Point C, currently under construction, because renewable energy sources are likely to prove a better investment over the next few years. The National Infrastructure Commission (NIC) said the government should scale back existing nuclear new build plans that envisage as many as six new plants being built.

The assessment said the new approach would give “flexibility to move towards newer low-carbon energy sources in future”, while at the same time maintaining the UK’s nuclear supply chain and skills base.

The recommendations will be a blow to the nuclear industry. A new £200M nuclear sector deal outlining industry-led proposals to guide the future of the UK nuclear business was announced at the end of last month.

The commission, launched by George Osborne in 2015, said that a decade ago it would have been unthinkable that renewables could be affordable and play a major role in electricity generation. But the sector had undergone a “quiet revolution” as costs fell, it said.

Sir John Armitt, the NIC’s chairman, said: “They [the government] say full speed. We’re suggesting it’s not necessary to rush ahead with nuclear. Because during the next 10 years we should get a lot more certainty about just how far we can rely on renewables.”

He argued that wind and solar could deliver the same generating capacity as nuclear for the same price, and would be a better choice because there was less risk. “One thing we’ve all learnt is these big nuclear programmes can be pretty challenging, quite risky – they will be to some degree on the government’s balance sheet,” he said.

“I don’t think anybody’s pretending you can take forward a new nuclear power station without some form of government underwriting or support. Whereas the amount required to subsidise renewables is continually coming down.”

The UK government is in the process of negotiating a deal with Hitachi to enable the nuclear project at Wylfa on Anglesey in Wales to go ahead, but EDF Energy is also putting forward plans for a second nuclear power station after Hinkley at Sizewell in Suffolk and there have also been discussions with South Korean nuclear operator KEPCO over a new plant at Moorside in Cumbria.

Other options for new plants at Oldbury in Gloucestershire and Bradbury in Essex are also in their early stages.

The NIC report said the UK government should support only one of these before 2025, by which time improvements in storage technology should have made renewables even more viable and competitive in price.

By not supporting too many nuclear projects the government can give flexibility to move towards newer low-carbon energy sources in future. The NIC recommended that by 2030 a minimum of 50% of power should come from renewables, up from about 30% today.

In the second quarter of 2018, wind, solar and biomass power stations supplied 28.1% of UK power, compared with nuclear at 22.5%.

As an indication of where energy prices are going, Dong Energy’s 1,386MW-capacity Hornsea Project Two windfarm in the North Sea, 89km off the Yorkshire coast, is proceeding on the basis of a contract for difference (CfD) price of £57.50/MWh, half the cost of windfarm prices being negotiated just two years ago.

In comparison, the CfD strike price for the Hinkley Point C nuclear station is set at £92.50 per MWh.

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