The Fukushima disaster put a stop to all the talk in the UK of a renaissance for nuclear power. Three years on from the accident, grandiose visions of a nuclear future are much reduced.
A lot has happened in the last few months, however, to indicate that new nuclear power stations may provide a more significant part of our future electricity generation than might have been imagined in the days when Fukushima and its attendant fall-out – no pun intended – were still fresh in the memory. But those of us who cheerfully heralded a renaissance will tread carefully. Hinkley Point C is the first of a potential fleet of reactors to gain approval for construction and, after months of negotiations, the first to secure a subsidy, or strike price, that will ensure it makes a certain level of revenue independent of the prevailing market rate for electricity. For utility EDF, and its French partner Areva which will build the plant, securing this deal was a crucial step forward. And it was a signal to the rest of the market that the government was prepared to smooth the way for companies to take the risk of building reactors, with some guarantees of revenue.
At the European Commission, which does not necessarily share the UK’s enthusiasm for nuclear new-build, the setting of the strike price – £92.50 per MWh – was not so welcome. There were murmurings that anti-competition rules might have been flouted, and an investigation is ensuing.
Some say that since the prevailing wind in the EU is anti-nuclear, bureaucrats in Brussels may have few qualms about throwing a spanner in the works of the UK programme – or at least making noises about doing so. Others see it as an empty gesture that is unlikely to derail EDF’s plans to any serious extent. But it illustrates one of the hurdles that remain.
Before Fukushima, it was envisaged that new reactors would be built on sites formerly owned by British Energy to contribute to the UK’s low-carbon energy targets. But the Japanese accident slowed the rate at which the plans for Hinkley Point C could progress. An exhaustive investigation by chief nuclear inspector Dr Mike Weightman attempted to determine whether such an event could occur in Britain. The conclusion of his 300-page report, ultimately, was no.
But that didn’t prevent the nuclear new-build process from slowing to a crawl. Until relatively recently, some seasoned energy industry engineers privately expressed doubts that work would ever begin on Areva and EDF’s project in Somerset.
But the strike price for that scheme was set after much delay last autumn, and late last year the Chancellor announced that there would be an influx of Chinese money into Hinkley Point C: the project had fresh impetus. Some companies, meanwhile, had surmised that nuclear opportunities abandoned by others would be capable of resuscitation. So when German utilities RWE Npower and E.On pulled out of the Horizon project, which is aiming to develop 5.4GW of nuclear capacity at Wylfa on Anglesey in North Wales and at Oldbury, Gloucestershire, Japanese firm Hitachi took over the project.
The German companies were responding to the backlash against nuclear that followed Fukushima. Germany is closing down its reactors and attempting to plug the gap with renewables. Proponents of nuclear power say the move could lead to higher carbon emissions than ever before in Germany owing to the need to generate baseload power from dirty sources.
Hitachi bought Horizon as the German utilities exited. Hitachi, and its technology partner General Electric, already have a reactor design – the advanced boiling water reactor, or ABWR – that has been built successfully in Japan.
.jpg?sfvrsn=932c3712_2 "On the rise: Hitachi’s ABWR reactor being built in Japan")
On the rise: Hitachi’s ABWR reactor being built in Japan
Areva’s 1,600MW EPR, which will be built at Hinkley Point C, has already been through the government’s generic design assessment (GDA), which determines whether a design can be licensed to be built. Hitachi-GE’s ABWR is now in the early stages of the GDA, which is expected to take four years. Westinghouse had been hoping that its technology would be chosen by Horizon before the German utilities pulled out of the project. Most of the GDA of Westinghouse’s AP1000 design had been completed.
For Westinghouse to finish the GDA work will take another two years and cost millions of pounds – but it seems it will do it. There are more than 50 issues that need to be resolved before the British regulators are satisfied, says the company.
And just before Christmas, rumours began to circulate that Toshiba, Westinghouse’s Japanese parent, was buying a majority stake in NuGen, yet another consortium with designs on nuclear power in the UK. The deal was confirmed last month. Some had believed the NuGen project dead in the water. But the 60% stake in the firm was sold to Toshiba by Spanish utility Iberdrola.
That allowed the Japanese giant to link up with yet another foreign energy firm, France’s GDF Suez, in a partnership to develop 3.4GW of capacity at a site known as Moorside, near Sellafield, the cradle of Britain’s nuclear industry.
So Westinghouse, which seemed to have had the door slammed in its face, is back in. Executives from the company had bullishly told journalists last September that they were by no means giving up on building the AP1000 in the UK: few might have imagined that they would move so quickly to reignite that possibility.
Westinghouse chief executive Danny Roderick says that, if Iberdrola had refused to sell, Toshiba would have pursued GDF Suez’s share of NuGen. If several AP1000s are built at Sellafield, as now seems possible, fuel for the reactors will be provided by Westinghouse’s operation at Springfields, Lancashire.
Centre of the industry: Several Westinghouse reactors could be built at Sellafield, near the Thorp fuel reprocessing plant seen here
So while it is unwise to pronounce that nuclear new-build is firmly back on track, there is no denying that there is considerably more action now than there was a year ago – or even six months ago. Three reactor designs are going through or have completed the GDA. The utilities and reactor vendors are happy to claim that new nuclear power stations will be generating electricity before too long: the start dates mentioned include 2023, 2024 and 2025.
Areva’s EPR construction sites in Finland and Normandy have encountered widely publicised delays and cost overruns. So some engineers suggest privately that, although ground will be broken first at Hinkley Point C, Hitachi’s Horizon reactors could be the earliest to generate electricity. But it is hard to predict what problems may beset any of these projects. Hitachi, for example, for all its prowess in the market, has to get to grips with the British culture of tough regulatory scrutiny which is among the most stringent in the world.
The company will also have to liaise closely with the British engineering industry. While the ABWR perhaps has a better chance than a completely untried design of negotiating the generic design assessment smoothly, “the challenge of working in the culture of the British nuclear industry is not trivial,” points out Tim Fox, head of energy and climate change at the IMechE.
It will also not escape the observant that the British input into all of this is minimal. New reactors will be designed and built by the French and Japanese and run for profit by the French and Japanese, backed in at least one instance by Chinese money. British consumers will pay extra for the privilege of using electricity from the reactors if it is deemed that building them has made them uneconomic compared to the market value of energy.
Subsidies will see the reactors built and run, and Britain will hope that doing so means those elusive carbon reduction targets come closer to being met. Enhanced energy security is important too. But Roderick of Westinghouse claims: “Renewables and nuclear are actually best friends. If you look at countries that are implementing renewables without nuclear, they are not getting the results they wanted.”
Economically, meanwhile, there is at least the hope that many British engineering and construction firms will be involved in the development of nuclear new-build. Optimistic assessments – Westinghouse’s, for example – suggest that two-thirds of the value of an AP1000 could possibly go to British companies.
Back in the pre-Fukushima days, the talk was all of “buy where you build” but it remains to be seen whether that policy will bear fruit this time around. Could Sheffield Forgemasters, for example, the firm that was notoriously let down by the government in 2010 when it had been promised a loan to buy equipment to make large forgings for the nuclear industry, see that investment – which was also backed by Westinghouse at the time to the tune of £50 million – resurrected?
Roderick is cagey. “If you’re only going to build 10 reactors, it’s probably more cost-effective to import them, and of course there is a lot more than just the ultra-big reactor vessel forgings,” he says. “There are the steam generator casings, the reactor core pump casings – and these are the things that Sheffield already has the capacity to make. In as far as a loan is the right thing for the UK government to do, I’ll leave it to them. We are going to buy forgings, and we will buy them from the Japanese, the Koreans, the Chinese – or Sheffield Forgemasters.”
While Westinghouse says it can try to keep the AP1000’s costs down through modular construction techniques and ease of connection to the grid, its own subsidy levels will also have to be negotiated with the government. A strike price will be decided on, and Roderick does not believe that the European Commission will ultimately rule against the tortuously thrashed-out deal made between the British government and EDF.
“Vendors are simply trying to determine what level of risk they can bear initially,” he says. “We would have gone down the same path EDF has, that’s just part of the deal. We hope to go through the process more quickly than EDF did, however. We’re watching to see if the commission strikes that down. It’s not a problem: it is simply that there are some anti-nuclear states that want to stop new-build. We will set a strike price.”
He declines to speculate on what that price might be compared to EDF’s deal, but claims it will be competitive. He argues that it is more difficult to attract investment in reactor new-build than in the past, and says that the costs of entry are astronomical – for example, it could cost $600-800 million to license a design in markets across the globe.
Site plan: EDF wants to build a new nuclear power station next to Sizewell B in Suffolk
Tim Fox of the IMechE has been a long-term advocate of nuclear as part of Britain’s energy mix. He believes that, despite the problems associated with the development of new plant, it is worth overcoming the obstacles to reduce carbon emissions. “Where we are today is a lot better than where we were this time last year,” he says.
“We are probably better-placed than we have been for a long time to see a successful outcome for the UK.” He says we were “at the bottom of a pit in terms of morale and prospects” a few months ago. The perception within the industry was allegedly that NuGen was unlikely to deliver any reactor capacity until Toshiba entered the scene.
For the Japanese, domestic markets for new nuclear are dead, as are some in Europe: so companies are having to look further afield for opportunities. “What we are seeing is the reality of those business objectives and priorities unfolding in a post-Fukushima world,” says Fox.
“The appetite for a nuclear renaissance in Europe is not there, and Britain is a lonely light in that respect. And in Japan the home market has disappeared. But companies need somewhere to market their technology.”
Skills, the perennial bugbear of engineering, could choke any rebirth, especially if several reactors are built at the same time, as seems likely.
We have moved from renaissance, through stagnation, to tentative resuscitation in the nuclear new-build landscape: but many formidable obstacles remain.