2 Nuclear new build in the UK
13. Before exploring the potential barriers to
nuclear new build in more detail, we start by examining the significance
of failing to deliver new build projects as they are currently
envisaged. In this section, we set out some of the key risks and
challenges that will be encountered should planned new reactors
not materialise. We also examine the likelihood that programmes
will not deliver as planned.
Plans for nuclear new build in
14. The Government does not have targets for
the deployment of particular electricity generation technologies.
However, DECC is clear that it believes that a mixed portfolio
containing nuclear, renewables and fossil fuels with CCS will
deliver a cost effective route to delivering on our climate change
and energy security goals.
15. The Government's Low Carbon Plan cites industry
intentions to bring forward 16 GW of new nuclear power stations
by 2025, with the first new power station beginning operation
in 2019. The 16 GW
- proposals from EDF and Centrica
to build four new reactors (with a total capacity of 6.4GW) at
- plans from NuGen (a consortium of GDF SUEZ and
Iberdrola) to build up to 3.6GW of capacity at Moorside near Sellafield;
- the Horizon Nuclear Power scheme to develop around
6GW capacity at Wylfa and Oldbury, now owned by Hitachi Ltd.
Consequence of failing to deliver
16. The primary major consequence of failing
to deliver new nuclear would be the impact on the UK's ability
to reduce carbon emissions and thereby tackle climate change.
 The impacts
on energy security are likely to be less severe (see paragraph
19). Mr Earp (Institution of Civil Engineers) told us that it
might be impossible to meet the UK's climate change targets without
new nuclear. However,
environmental NGOs Greenpeace and WWF-UK (who do not support the
use of nuclear power) claimed that the targets could be achieved
without new nuclear.
Nick Butler (author of a blog on energy and power for the Financial
Times) believed that "nuclear could be part of the story
if the price is reasonable but it is not absolutely essential
[for meeting carbon targets]".
17. Whether or not it is possible, it would certainly
be much more difficult to achieve in practice. If there is little
or no new nuclear, then much tougher action to reduce electricity
demand will be needed, along with greater use of other low-carbon
technologies. The scale of the challenge can be seen by comparing
the difference between DECC's "low cost" scenario as
part of its 2050 pathway analysis, with the alternative scenario
provided by Friends of the Earth.
Under the "low cost" scenario, there is more than 40GW
of nuclear power in 2050, along with 1,400 offshore and 4,400
onshore wind turbines in 2025, which fall to zero in the longer
term as decommissioned sites are not replanted.
Friends of the Earth's scenario has no new nuclear but requires
more than 10,000 offshore and 8,000 onshore wind turbines in 2050
(as well as greater effort on insulating homes).
18. Furthermore, DECC preferred a mixed energy
portfolio including renewables, nuclear and fossil fuels with
carbon capture and storage (CCS). Given the lack of progress that
has been made to date in bringing forward CCS technology in the
UK, the role for new nuclear in delivering on our decarbonisation
goals seems likely to become even more significant.
19. If new nuclear capacity is not delivered
as expected, some other measures will be needed to make up the
resulting gap between demand and supply. Professor Steve Thomas
(University of Greenwich) noted that gas, renewables and energy
efficiency were all potential candidates for this task.
Since any of these options could be delivered more quickly than
a new nuclear power station, failure of the nuclear programme
should not pose an immediate threat to energy security.
However, greater use of gas could introduce new challenges for
energy policy. Most obviously, increased use of unabated gas would
make it much more difficult to meet carbon targets.
There may also be energy security implications if the UK was to
become more dependent on imported gas (but this risk could potentially
be mitigated by increased use of domestically produced shale gas).
20. DECC argued that if offshore wind and CCS
were used to make up for any shortfall in nuclear delivery, there
would be adverse cost implications for consumers. It estimated
that the cancellation of the nuclear programme would lead to a
welfare reduction of £22 billion relative to a baseline scenario
where plants are deployed in line with lowest cost in order to
meet renewables targets, decarbonisation and energy security objectives.
21. We conclude that while the
cancellation or reduction of the UK's new nuclear programme may
cause challenges for energy security, it would have a much more
significant impact on the UK's ability to meet carbon reduction
goals, making our legally-binding long term targets extremely
challenging, if not impossible to meet.
22. Failing to deliver the first tranche of nuclear
new build could also undermine confidence among potential investors
and make it much more difficult to secure funding for further
rounds of new build (this is explored in more detail in chapter
23. We also conclude that failing
to deliver the 16GW new build that is currently under development
could undermine any hopes of developing new funding models for
subsequent nuclear new build. This would make it likely that future
projects would not be able to raise the necessary capital, raising
the prospect that it would not be possible to build any further
nuclear plant without state funding (see paragraph 45).
Will the new nuclear programme
24. Despite the Department's apparent confidence
that the 16GW figure will be delivered, a number of witnesses
suggested that the Government was overly optimistic. The Civil
Engineering Contractors Association told us that the Government's
indicative timeline for new nuclear was "unrealistic",
while Greenpeace believed it was "increasingly unlikely that
any nuclear reactors will be built before 2025".
The Institution of Mechanical Engineers said that the Government
was taking "a courageous approach to its policy" by
relying entirely on the market to deliver new nuclear capacity
to its preferred timescale.
LESSONS FROM OTHER COUNTRIES
25. Many witnesses thought that experiences elsewhere
in Europe could give an indication of how new build in the UK
might progress. New EPRs (European Pressurised Reactors) are being
constructed at Flamanville in France and Olkiluoto in Finland.
Both projects have suffered significant delays and cost overruns.
EDF is planning to use the same reactor design for its project
at Hinkley Point C and some witnesses had little confidence that
similar delays would be avoided in the UK.
On the other hand, representatives from the nuclear industry pointed
out that a new EPR was also being built in China and that this
project was currently running on time and to cost (although EDF
did acknowledge the significant differences in the regime in China
compared with those across Europe). 
26. EDF argued that the Flamanville reactor is
"first of a kind" and that "it is not unusual for
such projects to incur additional costs, and take longer, than
follow-on plants built to the same design".
EDF claimed it will incorporate learning from other EPR projects
(including those in Finland and China) into any UK construction
NuGen said it was also "committed to learning lessons from
other programmes as we develop our project towards a final investment
told us in written evidence that "should Horizon develop
reactors in the UK that have been deployed elsewhere in the world,
a high priority will be placed on incorporating detailed lessons
learned from specific projects to minimise first of a kind design
was acquired by Hitachi during the course of our inquiry, and
now plans to use the Hitachi-GE Advanced Boiling Water Reactor
(ABWR) design for its UK new build projects. The design has already
been built in Japan and Taiwan and is licenced in the USA. We
note that the ABWR reactors in both Japan and Taiwan were built
on time and to budget.
27. Engineering the Future (the alliance of professional
engineering institutions) published a report "Nuclear Lessons
Learned", which sets out detailed lessons that can be learnt
from current and recent nuclear new build projects. It includes
studies of the Flamanville and Olkiluoto projects, as well as
projects in China and the UK. 
Witnesses from engineering institutions told us that these lessons
had so far been adopted in plans for new nuclear build in the
UK, in particular through the development of guidance documents
for the industry on concrete, welding and safety culture.
28. The introduction of the Generic Design Assessment
(GDA) process also demonstrates that lessons from overseas have
been taken on board. In France and Finland, construction began
before the regulatory design and safety case assessment had been
fully completed. 
This resulted in modifications being introduced during construction
in order to meet regulatory requirements, which in turn led to
delays. The GDA process is a voluntary process that allows the
Office for Nuclear Regulation (ONR) and the Environment Agency
to carry out an early assessment of the safety, security and environmental
aspects of nuclear reactor designs before their consideration
of licence and permit applications.
This enables issues to be identified and corrected at the design
stage, rather than during construction.
The UK EPR reactor design is the first to have completed the GDA
process and was granted a Design Acceptance Confirmation in December
2012. The Hitachi-GE
ABWR design has recently begun the GDA process, which is likely
to last four to five years.
29. Although Hinkley C will not be the first
EPR reactor in the world and nor will Horizon's projects
at Wlyfa and Oldbury be the first ABWR reactors, they will nevertheless
be the first of these reactors in the UK context. While
there may well be lessons that can be learnt from experience overseas,
these projects will still encounter challenges that are unique
to the UK. Differences in working cultures, geography and regulatory
regimes between countries mean that these projects should still
be considered quasi "first of a kind" developments.
As Hitachi told us, it is unlikely that the first ABWR reactors
in the UK will be built as quickly as they have been in Japan
because it will take time to identify the implications of the
differences between the UK and Japan.
Vincent de Rivaz (EDF) also told us:
We are starting a new first of a kind project in
Somerset, taking into account all the elements that we have to
take into accountwhat the safety authority is asking for,
the regulations that you have in this country and the site specifications.
The project in Somerset is not the same project as elsewhere.
30. We commend both the Government
and industry in their efforts to date to learn lessons and adopt
best practice from nuclear new build projects in other countries.
It is still early days for new build projects in the UK, so it
will be important to keep monitoring developments elsewhere in
the world for emerging lessons and ideas that could be adopted
in the UK.
31. We note that the first new
nuclear power plants in the UK are likely to take longer to build
than subsequent plants of the same design. This is because while
some lessons can be learnt from experience overseas, differences
between the UK context and other countries will mean these projects
should still be considered "first of a kind" initiatives.
32. In the rest of this report, we look at some
of the principal challenges for the nuclear new build programme
and how these might be mitigated in order to ensure the best possible
chance of delivering 16GW by 2025 as planned.
IS A PLAN B NEEDED?
33. The Government does not appear to have any
contingency plans in place in case new build is not forthcoming.
Although we asked the Minister whether there were any such plans,
he merely proclaimed his confidence that the new build programme
would be delivered.
34. Several witnesses suggested what a "Plan
B" might consist of. Greenpeace recommended that it should
be based on the four principles of "demand reduction and
management, expansion of renewable generating capacity, flexibility
and an integrated power and heat policy, especially in the industrial
and Infrastructure Project Finance thought it could consist of
a short- to medium-term programme of gas turbines, combined with
increased funding for research into next generation nuclear technologies
(see chapter 6).
35. The Government is taking
steps to facilitate and encourage new build nuclear in the UK
but the final decisions to go ahead or not will be taken by boardroom
executives rather than Ministers. Given that ultimately these
decisions are beyond the Government's control, it is worrying
that DECC does not have any contingency plans in place for the
event that little or no new nuclear is forthcoming. Crossing
one's fingers is not an adequate or responsible approach when
the UK's legally binding climate change commitments and energy
security are at stake. For a department whose principal priorities
are to ensure energy security and carbon reductions, DECC appears
to be overly reliant on aspiration and hope. While we share the
Minister's hope that new build will be delivered as planned, we
nevertheless recommend that DECC begins exploring contingency
options as a matter of urgency.
10 EV 81 Back
HM Government, The Carbon Plan: Delivering our low carbon future,
December 201, pp 75-77 Back
EV 81, Ev 93, Ev 118, Ev w21 Back
EV 81, Ev w24, Ev w35, Q 173 [Mr Earp, Dr Fox], Q 328 [Mr Butler] Back
Q 173 [Mr Earp] Back
Ev w86, Qq 323-327 [Mr George] Back
Ev 118 Back
Other example pathways include: "doesn't tackle climate change",
"maximum demand, no supply", "maximum supply, no
demand", "analogous to MARKAL 3.26", "Higher
renewables, more energy efficiency", "Higher nuclear,
less energy efficiency", "Higher CCS, more bioenergy",
"Campaign to Protect Rural England", "Mark Brinkley",
"National Grid" and "Atkins". Back
Ev w30 Back
Ev w30, Ev 111 Back
Ev 81 Back
Q 173 [Mr Earp, Dr Fox] Back
Ev 81 - DECC explained that: "These results are influence
by three targets: (i) meeting the renewables obligation target
of 110TWh of renewable generation in 2020; (ii) meeting an assumed
decarbonisation target of a grid intensity of 100gCO2/kWh by 2030
(it is recognised that this target is not agreed across Government);
and (iii) keeping the de-rated capacity margin above 10% by using
a strategic reserve capacity mechanism." Back
Ev 91 Back
Ev 102 Back
Ev 111 Back
NAO, The nuclear energy landscape in Great Britain, April 2012 Back
Ev w30, Ev w86, Ev 102 Back
Ev 93, Ev w8, Ev w24, Back
Ev 93 Back
Ev w24 Back
Ev 118 Back
Ev w21 Back
Engineering the Future, Nuclear Lessons Learned, October 2010;
Ev 111, Ev 109 Back
Q 176 [Mr Earp] Back
Ev 122, Ev 109, Ev 100 Back
NAO, The nuclear energy landscape in Great Britain, April 2012,
Ev 100 Back
Ev 122 Back
"UK regulators confirm acceptance of new nuclear reactor
design" Office for Nuclear Regulation press release, 13 December
"Regulators to assess new nuclear reactor design" ONR
press release, 15 January 2013; Qq 368-378; Annex 1 Back
Annex 1 Back
Q 248 Back
Ev 111, Ev 102 Back
Qq 51, 444 Back
Ev 105 Back
Ev w11 Back