Building New Nuclear: the challenges ahead - Energy and Climate Change Contents

1  Introduction

1.  Around 19% of the UK's electricity generation is from nuclear power.[1] However, all but one of our existing nuclear power stations are currently expected to close by 2023. As a low-carbon source of electricity, nuclear power could contribute towards the UK's long-term climate change and energy security goals, but a new generation of nuclear plant will be required to deliver this.

2.  Although the Government does not set deployment targets for particular types of electricity generation, The Department of Energy and Climate Change (DECC) has always supported the idea of a "balanced mix" consisting of renewables, nuclear and fossil fuel with carbon capture and storage (CCS) as the route to delivering its energy and climate change policy aims.[2]

3.  A number of steps to help facilitate nuclear new build in the UK have already been taken. These include the introduction of the Generic Design Assessment process (see chapter 2) and changes to the planning system for nationally significant infrastructure projects (including nuclear power stations). Most notably, the Energy Bill—before Parliament at the time of writing—will introduce a new system of long-term contracts for low-carbon electricity generators, which are intended to bring forward new investment in these projects.

4.  The industry has set out plans to develop up to 16GW of nuclear power in the UK by 2025. Our inquiry was prompted by concerns that there may be barriers to delivering such a programme in the UK. We sought to identify these and to ascertain how they might be overcome.

Context of the inquiry

5.  Shortly before we launched our inquiry, energy companies E.ON and RWE npower announced that they would not be proceeding with their plans to develop Horizon Nuclear Power. This was a joint venture between the two companies with proposals to build new reactors at Wylfa on Anglesey and Oldbury in Gloucestershire. The sale of Horizon was on-going throughout most of our inquiry. In late October 2012, it was announced that Horizon had been acquired by Hitachi Ltd.[3]

6.  The UK European Pressurised Reactor (EPR) design—which EDF plans to use for its new build project at Hinkley Point C in Somerset—was the first design to complete the new Generic Design Assessment (GDA) process. It was granted a Design Acceptance Confirmation in December 2012, shortly after we finished taking evidence for our inquiry.[4]

7.  EDF were in negotiations with DECC about the terms of the "Contract for Difference" that would be offered to Hinkley Point C under the new market arrangements set out in the Energy Bill. Although it was hoped that an agreement would be reached by the end of 2012, at the time of writing, no announcement has yet been made.

8.  There was also a change of Minister of State for Energy during our inquiry. We were fortunate to hear from both Charles Hendry MP and John Hayes MP in the course of our inquiry.

Our inquiry

9.  The National Audit Office provided a useful scoping note, which helped us to formulate the terms of reference for this inquiry. [5] We are grateful for their input.

10.  We received 34 submissions of written evidence and held four oral evidence sessions. A full list of witnesses can be found at the end of this report.[6] We are very grateful to all those who have contributed towards this inquiry. We visited Bridgwater and the site for the proposed new reactor at Hinkley Point C, where we met with representatives from EDF, local councils and the local community. We also visited the Energy Skills Centre at Bridgwater College. We would like to express our thanks to all those who took the time to meet us and to impart their first-hand knowledge of the opportunities and challenges for building a new nuclear power station in the UK.

11.  We invited Centrica to give oral evidence to our inquiry. However, they turned down our invitation without offering an explanation. We note that on 4 February 2013, Centrica announced its decision not proceed with new nuclear investment in power stations at Hinkley Point and Sizewell.[7]

12.  Dealing with nuclear waste is a complex subject. Given the limited time available in our inquiry programme, we were not able to look at this issue in any detail. Indeed, it would not be possible for us to address this important topic adequately without holding a dedicated inquiry into nuclear waste. We received several submissions stating that new nuclear should not go ahead until questions relating to long-term storage of nuclear waste and sea discharged radioactive waste have been resolved.[8] After we had finished taking evidence, Cumbria County Council voted to withdraw from the process to find a host community for an underground radioactive waste disposal facility. As the last remaining Council taking part in this process, the question of long-term storage is now even more relevant than when we initiated our inquiry.[9]

1   DECC, Digest of UK Energy Statistics 2012, July 2012 Back

2   See, for example, DECC, Electricity Market Reform: policy overview Cm 8498, November 2012, para 16 - 17 Back

3   "Ministers welcome Hitachi new nuclear investment programme", DECC press release 2012/135, 30 October 2012 Back

4   "UK regulators confirm acceptance of new nuclear reactor design" Office for Nuclear Regulation press release, 13 December 2012 Back

5   NAO, The nuclear energy landscape in Great Britain, April 2012 Back

6   Page 43 Back

7   "Centrica announces decision not to participate in UK nuclear new build and launches £500 million share repurchase programme", Centrica press notice, 4 February 2013 Back

8   Ev w7, Ev w39 Back

9   "Energy Secretary responds to Cumbria nuclear waste vote" DECC press notice 13/010, 30 January 2013 Back

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Prepared 4 March 2013