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When the lights go out, blame the Treasury

Summary:
In zero carbon 2050, the UK energy requirements will be almost entirely supplied by three categories of electricity generation: renewables, nuclear and “counter-renewables”, by which I mean power plants that can be switched on, or otherwise varied, at short notice when the wind and sun are not delivering. In 2020, wind produced less than 4GW, i.e. one sixth of capacity, on a few occasions across 207 days. Demand averages around 30GW but is often 40GW in winter and can peak at 49GW or more. Nuclear should be, by 2050, the main steady-state producer, i.e. responsible for the “baseload”, i.e. the minimum non-varying requirement, although gas with carbon capture and storage (CCS) is a contender for that role. The main counter-renewable will remain gas + CCS, Bio-mass can be regarded similarly.

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In zero carbon 2050, the UK energy requirements will be almost entirely supplied by three categories of electricity generation: renewables, nuclear and “counter-renewables”, by which I mean power plants that can be switched on, or otherwise varied, at short notice when the wind and sun are not delivering. In 2020, wind produced less than 4GW, i.e. one sixth of capacity, on a few occasions across 207 days. Demand averages around 30GW but is often 40GW in winter and can peak at 49GW or more. Nuclear should be, by 2050, the main steady-state producer, i.e. responsible for the “baseload”, i.e. the minimum non-varying requirement, although gas with carbon capture and storage (CCS) is a contender for that role. The main counter-renewable will remain gas + CCS, Bio-mass can be regarded similarly. Imports, currently 10.7% of the electricity market, will be a key element. Hydro is too small to be included in these notes and hydrogen is not a source but a storage mechanism which itself requires more electricity for its production than it replaces. It is, however, an ideal use for excess production from renewables.

The UK imports 35% of its total energy needs. It is difficult to determine electricity’s share of the total UK energy market as the figures for fossil fuels include usage for electricity generation which needs to be subtracted. In the absence of a better number, we should assume that electricity is 50% of the total.

“Nuclear installed capacity peaked at 12.7GW in 1995, with the opening of Sizewell B – the last nuclear reactor to be opened in the UK. In this year, nuclear accounted for more than a quarter of total electricity supply.” By 2018, that had shrunk to 18.7%. Generation peaked in 1995 at 12GW, but no current plants will be operational by 2035. Those under construction and planned (in 2018) should be producing 9GW. That estimate is not changed by the just announced Wylfa, Anglesey, as it replaces Bradwell which is no longer planned (but might be reinstated!). Using the 50% assumption, nuclear supplies about 10% of the current energy requirement.

Looking forward to 2050, when virtually all energy will be electricity and the population, and perhaps therefore total energy need, has grown by 15%, the current 9GW planned nuclear production would only supply 8.7%. A number of commentators have claimed the UK will need another 40GW of baseload capacity by 2050. If that should all be nuclear it means more than quadrupling the UK’s nuclear electricity generation capacity by then. Even with the Treasury’s new-found enthusiasm for nuclear power, that seems a little unlikely. The projected purchase of 16 Rolls Royce Small Modular Reactors would only be the equivalent of two more Hinkley Points, i.e. 4.6GW. But that is still speculative. The first working model is hoped to be operational in the 2030s. Meanwhile, other small nuclear reactors, e.g. those using molten salt and operational in the 2020s, are being ignored by the UK Government.

As things stand, the gap would have to be filled by gas + CCS. The risk is that, whilst we do have the technology for small and large nuclear, CCS is still at the developmental stage. The Department for Business, Energy and Industrial Strategy (BEIS) published comparative costs for the main alternative sources in August 2020. They ranged from £44 per kilowatt hour to £85 for gas + CCS. Nuclear was omitted on the ground that it was commercially sensitive. The report did, however, say “The Government’s ambition is for the nuclear sector to deliver a 30 per cent reduction in the cost of new build nuclear projects by 2030, as set out in the Nuclear Sector Deal published in 2018.” Of course, ambition and results do not always match.

In the previous (2016) report, Chart 6 shows that nuclear is 50% more expensive than solar or onshore wind, due to its high commissioning costs, but cheaper than the alternatives, even with these costs. Thanks to its negligible fuel costs (high for gas) it is far cheaper than any alternative candidate for the role of baseload supplier.

Four things are clear at this point: BEIS is so besotted with renewables and hydrogen that planning for a secure, least-cost baseload is woeful, if it exists at all. Secondly, HM Treasury’s 20 year refusal to even consider adequate nuclear provision has got us into this mess. And they are not alone. The National Grid update on trends dated March 2021 does not mention “nuclear” at all. Thirdly, imports and consumer prices are likely to go through the roof. Nuclear is by far the strongest candidate for the provision of the baseload but unless BEIS accelerates nuclear development very rapidly, either the lights will go out or the UK will be stuck with gas + CCS with massive costs to the consumer. The current indifference to 4th generation small reactors is perverse.

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Tim Ambler
Tim Ambler (born 1937) is a British organizational theorist, author and academic on the field of Marketing effectiveness. Ambler featured on Marketing's list of the 100 most powerful figures in the industry. He is cited by the Chartered Institute of Marketing as one of the top 50 marketing experts in the world

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