110. The Government's preferred route to a low-carbon,
secure and affordable electricity system is to have a "balanced
mix" of renewables, nuclear and fossil fuels with carbon
capture and storage. Achieving this ambition will require a new
generation of nuclear power stations to be built, starting with
the industry's proposals to build16GW of new plant by 2025.
111. Although some steps have been taken to support
new nuclear projects in the UK (such as changes to the planning
system and the introduction of the Generic Design Assessment process),
some significant barriers still remain:
- The upfront cost of constructing
a nuclear power station remains one of the largest challenges.
We hope that the introduction of Contracts for Difference will
help to reduce the cost of capital to some extent. However, new
models of financing such as project fundingare only
likely to become a possibility if the first new build projects
are delivered successfully, without the kinds of delays and cost
overruns that have been seen in France and Finland.
- Public attitudes are another potential barrier.
Building public support for new build projects requires a sophisticated
understanding of the nature of people's concerns, which are likely
to consist of more than simply the fear of a nuclear accident.
Better coordination between the regulatory permitting process
and the planning process could help to improve dialogue with local
communities. In addition greater support for local communities
in interpreting complex planning documentation could allow them
to make a genuine contribution.
- There is also a risk that the absence of a fully-formed
nuclear supply chain in the UK could lead to bottlenecks and delays
in the delivery of components for new build projects. Support
for prospective suppliers may be needed to ensure they are able
to comply fully with nuclear safety requirements.
112. There is some suggestion that it could be
possible to meet our climate change objectives without any new
nuclear power stations, but this would be a more difficult and
possibly more expensive route.
113. A failure to deliver nuclear new build would
pose less of a threat to energy security, but there could be some
indirect security risks as a result, such as increased reliance
on imported gas.
114. While we share the Government's hope that
the new build programme will be a success, the barriers described
above may yet prevent some or all of the new projects from going
ahead. Given this possibility, it is vital that Government starts
thinking about alternative options for meeting our long-term climate
change and energy security objectives so that these contingencies
can be enacted quickly in the event that new nuclear is not forthcoming.