Disappointing roadmap and AGR retirements risk periods of no nuclear from 2028

The past few weeks have been full for interesting developments in the nuclear sector, with a new GW scale reactor opening, a GB fleet update from EDF and a new nuclear roadmap from the UK Government.

First up was the announcement early in the new year that KEPCO’s Shin Hanul 2 APR-1400 reactor achieved its grid connection on 21 December, making this the 7^th reactor of its type to open. It will begin full commercial operations in H1 2024. The APR-1400 is clearly the leading modern western reactor technology, and the only one to have more than one unit up and running. An 8^th unit  – Barakah 4 in UAE – is due to open imminently, having finished fuel loading in December. Poland and Turkey have both announced plans to build APR-1400s, and in November the UK Government signed a Memorandum of Understanding with KEPCO with a view to developing the technology in Britain. Mott MacDonald is advising KEPCO on its engagements with the UK Government. The UK would do well to order a handful of APR-1400s to kick-start its nuclear programme, which is currently stalled.

Next came EDF’s fleet update which came before (press release) and after (webinar) the Government’s new Nuclear Roadmap which was published yesterday.

Extending the lives of the AGR fleet requires a new approach from the ONR

As I detailed in my report into the GB nuclear industry in November, the Office for Nuclear Regulation (“ONR”) has taken an excessively conservative approach to the safety case for the AGRs. These reactors contain graphite bricks in their cores which degrade over time as they become irradiated. This degradation can lead to cracking, and the potential for it to become dislodged in the event of an earthquake, potentially blocking the insertion of control rods into the core.

The ONR requires that 100% of the control rods must be capable of being deployed even in a 1-in-10,000 year earthquake – about 10 times stronger than the strongest ever recorded in the UK – despite the fact that only 15% (12 out of 80) of the fuel rods are required to stop the nuclear reaction, and there are two further shut-down methods should the control rods fail for any reason. This is self-evidently too risk averse and has already forced the early closures of Hinkley Point B and Hunterston B in 2022.

There are now four AGRs remaining: Heysham 1 and Hartlepool which are currently due to close in March 2026 and Heysham 2 and Torness which are due to close in March 2028. The other British nuclear power station, Sizewell B (a pressurised water reactor, “PWR”) is not due to close until 2035, and EDF is exploring options to extend its life up to 60 years in line with other PWR life extensions around the world.

If the AGRs close to the current schedule, we would only have Sizewell B on the system until the European Pressurised Water reactor (“EPR”) at Hinkley Point C (“HPC”) opens. While the most recent guidance for its opening is September 2028, it is widely believed within the industry that it won’t open until the 2030s.

This means that when Sizewell B closes for maintenance or re-fuelling there will be no nuclear power on the GB grid. This is not a hypothetical risk: unless the AGRs are extended into the next decade, we will have periods of no nuclear power on the GB grid for the first time since the 1950s. It is vital that the ONR reviews its approach. A more reasonable benchmark would be to require 65-75% of the control rods to be capable of being deployed in a 1-in-10,000 year earthquake rather than the current 100%.

EDF has suggested that the AGRs could run into the 2030s, but not by very much, however even this short extension would be an important bridge to the opening of Hinkley Point C.

New nuclear roadmap disappoints

Yesterday the Government published its new roadmap for nuclear power, setting out “how UK will increase nuclear generation by up to 4 times to 24 GW by 2050”. Contrary to recent press reports, the headline target has not been reduced. The detailed document can be found here.

“Nuclear is the perfect antidote to the energy challenges facing Britain – it’s green, cheaper in the long term and will ensure the UK’s energy security for the long-term… This will ensure our future energy security and create the jobs and skills we need to level up the country and grow our economy,”
– Rishi Sunak MP, Prime Minister of the United Kingdom of Great Britain & Northern Ireland

The highlights are:

• Commitment to taking the Final Investment Decision (“FID”) for Sizewell C (“SWC”) before the end of this Parliament (ie this year)
• Exploring another GW-scale reactor in addition to HPC and SWC
• Completing the Small Modular Reactor (“SMR”) technology selection process with a view to FID in 2029
• Aiming to secure investment decisions to deliver 3-7 GW every five years from 2030 to 2044
• Developing alternative routes to market for new nuclear projects
• Optimising and streamlining regulation, potentially cutting the time for completion of a Generic Design Assessment (“GDA”) by half
• Plans to regenerate and grow the UK’s domestic fuel cycle capabilities, removing Russia from supply chains
• Developing nuclear supply chains and skilled workforce
• Financial support for new reactors though either the Contracts for Difference (“CfD”) or Regulated Asset Base (“RAB”) models

While the Government continues to make supportive noises for nuclear power, the concrete steps remain too small. Exploring one additional large-scale reactor this Parliament is too timid and could be counter-productive in a global market where competition for resources is growing. I continue to be bearish on the EPR technology and would prefer if it was dropped for SWC in favour of the KEPCO APR-1400. EDF says it is “technology agnostic” when it comes to new projects for the sites it owns – it claims to be happy for the Government to select technologies from other vendors and will work with them to deliver successful projects on its sites.

EPRs take more than a decade to deliver – potentially significantly more, while the APR-1400 has been delivered in 8 years. KEPCO believes a UK model would take 10 years to build. We need to get a move on – the APR-1400 does not have GDA in Britain but has secured certification in a number of other countries including the US and EU. This would be an excellent opportunity to test the Government’s commitment to international regulatory collaboration to streamline technology assessments, and it should actively hold ONR to account to ensure delivery.

“ONR and EA [the Environment Agency] will continue to work with mature regulatory bodies to facilitate greater international collaboration, enabling the sharing of regulatory assessments and maximising the value of overseas regulatory work,”
– Civil Nuclear Roadmap to 2050

The other challenge is paying for these new reactors. I am unconvinced that either the CfD or RAB approach will deliver the necessary scale of new projects. To date only one nuclear scheme has been launched in a quarter of a century using these incentive models. I believe the best approach to securing new large-scale nuclear capacity in the shortest timeframe is for the Government to pay for them itself, possibly with a view to selling down some or all of the equity after the construction phase.

Were the Government to commit to a handful of new reactors, it may well only need to fund the first couple to prove its intent, before the private sector was persuaded to take on construction risk. At the moment this is a major barrier, not least because processes take so long. EDF has already been working on SWC for a decade and FID has yet to be taken. If it goes ahead it will be more than 20 years from the start of the process to the start of commercial operations, which is simply too long.

In addition to the roadmap, the Government has launched a consultation on alternative routes to market for new nuclear projects, to “understand how government can support investment in advanced nuclear technologies and enable high value projects to be taken forward”. The consultation focuses on small and advanced nuclear technologies – while these will be important in the next decade, the Government should not be distracted away from the core challenge of replacing the retiring GW-scale reactors.

The Government talks a good game on nuclear power, but nothing in this “roadmap” indicates a genuine commitment to delivery. In fact, I would not describe the document as a roadmap, it is more a new, slightly more detailed set of ambitions. For example, it says it wants to explore another GW-scale project this Parliament, but does not explain how it will do this. Given that this Parliament will likely end in the summer, ahead of a General Election that is expected to be held in the autumn (and must by law be held no later than January 2025), the stated ambition is much too vague.

Each new nuclear policy initiative seems to move us forward by tiny increments. This is a risky strategy – several countries have woken up to the benefits of nuclear power and are starting to sign agreements with vendors, in particular KEPCO. The Koreans are unlikely to be impressed with a “one new project maybe if we’re lucky” approach – we need to be much more ambitious. I would encourage the Government to lock in five or six new projects, ideally with KEPCO, and with Government funding to secure at least the first two.

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Without urgent action, we will have periods of zero nuclear at the end of this decade and potentially into the 2030s. The urgent actions required are:

• Ensure removal of regulatory barriers to extending the lives of the AGRs
• Secure new GW-scale reactors – the fastest way of doing this would be to order a handful of APR-1400s and to pay for at least the first couple with public money
• Streamline regulatory processes, including international collaboration, to reduce the time for GDA supporting both large and small-scale nuclear projects

These three things should be the key elements of the Government’s nuclear to-do list for the remainder of this Parliament. If it can achieve these three goals, then we would have a credible strategy for maintaining a strong nuclear capability and source of zero carbon baseload generation past the end of this decade and beyond.