Chapter 3: UK civil nuclear strategy
38.In the preceding chapter we argued that a certain level of R&D was essential for any country with nuclear assets and liabilities. The actual level of that R&D must depend on national nuclear aspirations. Nuclear energy must be viewed as part of the wider UK energy landscape. In written evidence to the House of Lords Economic Affairs Select Committee BEIS said that the Government’s “overarching economic challenge for energy policy” was to ensure that the country’s energy is:
- reliable;
- affordable; and
- clean.38
39.The Economic Affairs Committee pointed out that, “it is clear though that these objectives can conflict and trade-offs are required when developing energy policies.”39
40.UK energy demand will require significant new build of power stations in the coming years if only to replace closing nuclear and coal plants. It is current Government policy that a proportion of these power stations will be nuclear.
41.Once they are in operation nuclear power stations have minimal carbon emissions and public concern over safety following the 1986 Chernobyl accident appears to have declined.
42.Figure 4, using data from polls published by the Nuclear Industry Association (NIA), shows that more people in the UK support replacement (‘new’) nuclear build than oppose it. Support for replacement nuclear has remained fairly steady since the late 2000s, barring a short-lived drop in support after the Fukushima accident in March 2011. Furthermore in a December 2015 poll 70% of people believed that nuclear was a necessary part of the energy mix.40
43.Nuclear power is ideal for continuous baseload low-carbon electricity generation. Political and public opposition, which contributed to a long hiatus in the building of nuclear power stations in the UK and elsewhere has somewhat abated, but the nuclear sector is still struggling to gain traction in the UK. This is now largely for economic rather than political reasons—nuclear power has low operating costs and low emissions but high upfront costs. The costs of nuclear power, driven largely by increasing regulation to improve safety, have been increasing at a time when price of gas has been falling, rather than rising as predicted, while subsidies for renewable generation have created new competition and undermined the economics of base-load generation. These factors have made new (and even existing) nuclear generation uncompetitive in many parts of the world, without substantial state support or guaranteed prices. Nonetheless, nuclear appears as an important element in virtually all UK energy scenarios in the longer term.41
Figure 4: Public support for new nuclear in the UK
Source: FORATOM, ‘What people really think about nuclear energy?’ (12 January 2017): https://www.foratom.org/downloads/people-really-think-nuclear-energy/ [accessed 30 March 2017]
44.The development of nuclear energy within the UK cannot be seen in isolation or as an end in itself. It must be seen as part of a wider energy policy which seeks to balance the competing demands of affordability, security of supply, decarbonisation and interoperability with other elements in the electricity generation mix.
Future civil nuclear strategy
45.The Government told us that our 2011 report, Nuclear Research and Development Capabilities42 “remained a key consideration in the development of the current nuclear innovation programme and its supporting actions”.43
46.Following the Committee’s report, an ad hoc advisory board was formed under the guidance of Sir John Beddington, the then Government Chief Scientific Adviser, to consider the report’s recommendations and propose suitable actions to address them. The work of this ad hoc board led to the development of the 2013 Nuclear Industrial Strategy44 and supporting documents including a Nuclear R&D Roadmap.45 The strategy set out the Government’s expectation that nuclear will play a significant role in the UK energy mix in the future. The strategy sets out indicative milestones and actions for the Government and industry for the UK’s nuclear future. The strategy covers these main areas:
- Recognising the challenges and capturing opportunities in the home market;
- Enhancing the UK’s innovation and R&D landscape;
- Government engagement to attract domestic and inward investment in nuclear projects and assistance to help firms penetrate overseas markets; and
- Ensuring the UK has the necessary skills for the future.46
47.Mr Norman told us that the 2013 strategy “provides a basis” for the Government’s current thinking on civil nuclear policy.47 Furthermore The Rt Hon The Lord Hutton of Furness, Chairman of the NIA, told the Committee that the NIA “have been assured … that the 2013 nuclear industry strategy remains the goal for which we are all striving”.48
48.Dame Sue Ion told us, however, that the problem with the 2013 strategy is that it is aspirational and does not “set out how or how much it would cost to deliver all the elements that were identified.”49
49.In spite of the Government’s statement that the 2013 strategy is still in place and Lord Hutton saying that the NIC is still working to this strategy, it was not mentioned in evidence from other witnesses. In fact some witnesses told us that the UK does not have a nuclear strategy. Dr Michael Bluck, Director of the Centre for Nuclear Engineering at Imperial College London, told the Committee that the UK is missing a strategy50 and Professor Paul Howarth, Chief Executive of the NNL, said that the UK has “lacked a clear vision and strategy as far as the nuclear industry is concerned”. Prof Howarth concluded: “we are a country that has all the right components as a major nuclear nation to be at the top table. We have not played our cards well to date”.51
50.The evidence we received overwhelmingly stated that responsibility for overarching civil nuclear strategy lies with BEIS.52 Some witnesses suggested that the NIC (see paragraph 64) could take the lead on actions needed for the implementation of any strategy and that bodies such as the NNL and NIRAB can provide independent, expert advice to Government as necessary.53
51.Civil nuclear is a long term industry where changes in direction in successive Governments’ policies and periods of lack of clarity have had a detrimental effect on the development of the industry, particularly in respect of civil nuclear generation over the last 20 years. The Government has highlighted the importance of the nuclear sector in its industrial strategy green paper and must develop a clear, long term vision and set of goals for civil nuclear strategy.
52.In light of the strongly critical evidence we have received the Government needs to review and refresh the 2013 strategy for nuclear energy, in conjunction with the NIC and take swift and concrete steps towards its further implementation. Furthermore this strategy must be widely publicised and provide both a clear vision and consistency for the long term in conjunction with other existing or planned energy technologies.
Strategic policy decisions
53.A refreshed civil nuclear strategy is a prerequisite of addressing specific and imminent policy decisions in the sector. One such crucial set of decisions relates to SMRs. Other strategic decisions that the Government needs to make in the short to medium term include the way forward for geological disposal and solving the issue of radioactive waste management.54
54.In particular, Professor Mike Tynan, Chief Executive of the Nuclear Advanced Manufacturing Research Centre (AMRC), told us that the Government needs to decide whether it wants only to be an adopter and operator of nuclear technologies or whether it wants to move back into technology ownership in nuclear as well. The latter approach would enable the UK to export that technology around the world.55 Mr Norman, however, rejected the premise of this choice, saying that he did not see a tension between the two and that much of the value in nuclear technology lies in the ancillary services around it.56
55.Lord Hutton phrased the question in the following way:
“We all have to ask ourselves the question of what sort of nuclear nation we want to be. Do we want to be a top-table nuclear nation, which is the role we have always occupied and done so brilliantly in the last 60 years, or are we going to settle for some other role which might not be the full-spectrum range of capabilities that we have got used to?”57
56.There is wide international recognition that the future of nuclear energy from fission is likely to depend on small modular reactors. At present there are numerous designs, some of UK origin. None is yet, however, in production. This presents the UK with an opportunity to return to the business of design and manufacture of nuclear plants.
57.The Government must decide whether it wishes the UK to be a serious player in developing nuclear generation technology as a designer, manufacturer and operator or alternatively to restrict its interest to being an operator of equipment supplied by others from overseas. While this is not necessarily a binary choice, and a mixture of the two may be possible, being a technology manufacturer would require a step change in the level of Government funding and a long term commitment by the Government to providing underpinning strategic support. We urge the Government to take a clear and firm view. Not making a timely decision could have serious consequences: if the Government fails to act in a timely fashion it could end up wasting money by doing too little, too late or worse too much, too late. The Government must break the cycle of indecision.
58.Once the Government has made this overarching decision, other strategic decisions will flow from this to define a clear set of objectives and timescales with which the nuclear industry can align itself. If the Government were to decide that the UK should be a serious player in nuclear fission, the following would be the minimum steps needed to achieve this:
- Development of a domestic research programme that is of sufficient scope and scale to make the UK an attractive partner for developing new technology to support new nuclear build (including Small Modular Reactors) in the UK and abroad.
- Participation in and contribution to international programmes (for example the Generation IV International Forum).
International Co-operation and Generation IV
59.International collaboration offers considerable scope for reducing research costs. The UK benefits from this in development of fusion technologies through UKAEA and its partners in the Joint European Torus (JET). A similar opportunity exists in connection with the group of so-called Generation IV technologies which are expected to lead to the next generation of commercial fission reactors—safer and more efficient than those of today (See Box 2).
Box 2: Generation IV Reactor Concepts
|
Generation IV reactor technology is considered to represent the next generation of fission technologies improving on existing light water reactor (LWR) concepts by offering improved efficiency, safety, cost and environmental cleanliness, while also providing greater resistance to diversion of materials for weapons proliferation and greater security against terrorist attacks. The World Nuclear Association currently lists 6 Generation IV reactor designs which are the subject of further development by an international consortium of countries. Projected R&D expenditure is about $6 billion over 15 years, targeting prototype deployment between 2020 and 2030. About 80% of the cost is being met by the USA, Japan and France. Designs include:
|
Source: World Nuclear Association, ‘Generation IV nuclear reactors’ (April 2017): http://www.world-nuclear.org/information-library/nuclear-fuel-cycle/nuclear-power-reactors/generation-iv-nuclear-reactors.aspx [accessed 24 April 2017]
60.In our 2011 report we highlighted the importance of membership of the Generation IV International Forum (GIF) to the development of these new technologies because of the scale of funding and effort required. The UK stopped being an active member of GIF in 2006 for financial reasons and although the Committee recommended the UK should re-join the forum, this has not happened.58 The UK retains an observer membership of GIF.
61.A number of witnesses told us that it is essential that the UK joins international collaborations such as GIF. GE Hitachi Nuclear Energy told us that it would help reduce the financial risk to the UK compared with acting alone.59 The Nuclear AMRC said the UK should be involved in Generation IV “if we want to remain a leading nuclear nation and be at the forefront of innovative technologies, manufacturing processes and materials”.60 Furthermore, in its final report NIRAB recommended that the Government develop a plan to resume active membership of GIF.61
62.Jesse Norman MP, Parliamentary Under Secretary of State at BEIS, Minister for Industry and Energy, set out to the Committee the steps required for the UK to re-join the GIF:
- “Acceptance and ratification of the Framework Agreement.
- Acceptance of the system arrangements for each of the technologies we are interested in.
- Payment of annual fees, the level of which is dependent upon the number of technologies we wish to pursue an interest in.
- Active, ongoing participation in collaborative projects relevant to the work of the Forum.”62
63.We re-state our 2011 recommendation that the UK should re-join the Generation IV International Forum (GIF). In 2011 the Government told us that the UK’s membership of Euratom was sufficient to be involved in the development of advanced reactor designs. But, as we discuss in Chapter 6, the UK is leaving Euratom and this adds to the importance of the UK re-joining GIF. The UK cannot maintain a world leading position for fission or fusion technologies by acting in isolation.
The Nuclear Industry Council and a Nuclear Sector Deal
64.The NIC is a partnership forum between Government and industry whose role is to provide high-level strategic direction to the UK’s nuclear industry. It was originally set up in 2013 but until February 2017 it had not met since July 2014.63 Mr Norman told us that it had recently been re-constituted with a smaller membership than previously. The first meeting of the newly reconstituted NIC64 took place on 22 February 2017 and was co-chaired by Mr Norman and Lord Hutton.65
65.The NIA told us that the NIC was set up “to facilitate cooperation between the nuclear industry and Government, with an overarching role to ‘tackle long term challenges facing the industry and to help realise future opportunities through strategic decision making’”. It includes representatives from across the nuclear industry.
66.In its Industrial Strategy Green Paper the Government proposed ‘sector deals’ to support specific industries.66 The Green Paper sets out early work that is being carried out on a nuclear sector deal. Lord Hutton told us that the main focus of the NIC in the short term will be on fleshing out plans for this sector deal:
“[The NIC] had a pretty extensive discussion about what, for industry, we would like to see from the sector deal … [t]he Government have made it clear to us that there is no template … we will look at issues to do largely with skills and competitiveness in the first instalment of the nuclear sector deal because we recognise that these are massive challenges.”67
Lord Hutton went on to say that it is too early to say exactly what a deal will look like but he expects to have something agreed by summer 2017.68
67.Both the Government and the nuclear industry have high hopes for the newly re-constituted NIC. However, the Committee is disappointed by the baffling hiatus between meetings of the NIC from 2014 to 2017. It must not be allowed to stall as it did in its previous incarnation. The Government now needs to square up to the outstanding decisions relating to nuclear, taking advice from the NIC.
68.We recommend that the membership of the NIC should be representative of the UK nuclear industry and its aspirations for domestic and international development. The NIC should comprise both national and international experts, heads of the major UK organisations and also representation from the supply chain, especially where experience in innovation and international reach is evident.
69.Sector deals in sectors such as aerospace and automotive have proved effective but these industries are significantly larger than the civil nuclear industry. Nevertheless, whilst acknowledging the limitations of the nuclear sector due to its size, we believe it is desirable and sensible to proceed with a sector deal as a national priority. The proposed sector deal on skills and competitiveness for civil nuclear needs to be based on a clear, long term and sustained Government vision for the direction of the sector so that it is known what skills will be needed.
38 Written evidence to the Select Committee on Economic Affairs from the Department for Business, Energy and Industrial Strategy, 14 February 2017, (Session 2016–17) (UEM0083)
39 Economic Affairs Committee, The Price of Power: Reforming the Electricity Market (2nd Report, Session 2016–17, HL Paper 113), para 9
40 FORATOM, ‘What people really think about nuclear energy?’ (12 January 2017): https://www.foratom.org/downloads/people-really-think-nuclear-energy/ [accessed 30 March 2017]
41 Committee on Climate Change, Power sector scenarios for the fifth carbon budget (October 2015): https://www.theccc.org.uk/wp-content/uploads/2015/10/Power-sector-scenarios-for-the-fifth-carbon-budget.pdf [accessed 24 April 2017]
42 Science and Technology Committee, Nuclear Research and Development Capabilities (3rd Report, Session 2010–12, HL Paper 221)
44 HM Government, The UK’s Nuclear Future (2013): https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/168048/bis-13-627-nuclear-industrial-strategy-the-uks-nuclear-future.pdf [accessed 23 March 2017]
45 HM Government, Nuclear Energy Research and Development Roadmap: Future Pathways (2013): https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/168043/bis-13-632-nuclear-energy-research-and-development-roadmap-future-pathway.pdf [accessed 21 March 2017]
46 HM Government, The UK’s Nuclear Future (2013), p 9: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/168048/bis-13-627-nuclear-industrial-strategy-the-uks-nuclear-future.pdf [accessed 23 March 2017]
52 See for example Q 2, Q 20 and written evidence from AMEC Foster Wheeler (PNT0044), Dalton Nuclear Institute (PNT0018), EDF Energy (PNT0039), Gwynedd Council (PNT0011), Moltex Energy (PNT0037) and Westinghouse UK (PNT0027)
53 Written evidence from Dalton Nuclear Institute (PNT0018), Prof Neil Hyatt (PNT0028), Dame Sue Ion (PNT0031), National Nuclear Laboratory (PNT0046) and Rolls-Royce (PNT0006)
58 Science and Technology Committee, Nuclear Research and Development Capabilities (3rd Report, Session 2010–12, HL Paper 221), para 275
61 NIRAB, NIRAB Final Report 2014 to 2016 (February 2017), recommendation 7, http://www.nirab.org.uk/media/10139/nirab-117-3-nirab-final-report_web.pdf [accessed 16 March 2017]
63 HM Government, ‘Nuclear Industry Council’: https://www.gov.uk/government/groups/nuclear-industry-council [accessed 20 March 2017]
64 The membership and terms of reference of the NIC are available on the Government website: https://www.gov.uk/government/groups/nuclear-industry-council [accessed 29 March 2017]
66 BEIS, Building our Industrial Strategy (January 2017): https://beisgovuk.citizenspace.com/strategy/industrial-strategy/supporting_documents/buildingourindustrialstrategygreenpaper.pdf [accessed 20 March 2017]
68 Ibid.