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UK government review recommends subsidies for small nuclear plants


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UK government review recommends subsidies for small nuclear plants

The U.K. should subsidize the development of small-scale nuclear plants in the country to boost the industry in the same way it has done for offshore wind, according to an independent study commissioned by the government.

With an aim to commercially deploy small modular reactors, or SMRs, by 2030, the government should "establish an advanced manufacturing supply chain initiative (as it did with the offshore wind) to bring forward existing and new manufacturing capability in the UK," the authors of "Expert Finance Working Group on Small Nuclear Reactors" said in the report released Aug. 7.

The SMRs discussed in the study, which was commissioned in December 2017 and was based on comments collected from reactor vendors and developers through a request for information, range from microgeneration projects through to 600-MW reactors, with overnight costs between £100 million and £2.5 billion.

According to the World Nuclear Association, the U.K. has 15 nuclear units at eight plants with a combined capacity of nearly 9,000 MW that are responsible for 21% of the country's electricity supply. Four plants comprising eight units are due to be retired by 2025.

"The key themes that emerged from the stakeholder submissions relate to the benefits of risk mitigation and improved project performance which may be realized through factory build, modular construction, standardization, reduced lead times and lower capital costs," the report said.

Other recommendations include providing sites for nuclear projects and making regulatory processes more flexible. The study also suggests reducing costs by financing projects through a new infrastructure fund, direct equity or government guarantees and recommends contracts for difference or power purchase agreements to support new plants.

"Reducing the risks of the projects and making the consequences of the risk manageable are fundamental to creating the best environment for the private sector to be able to invest in small nuclear," the authors said.

Rolls-Royce Holdings PLC is one of the companies interested in exploring the sector. It is leading a consortium of British companies to design an SMR power station "to deliver low-cost, low-carbon energy to help the UK meet its carbon commitments," the company said, adding that it could compete with wind and solar by producing energy for as low as £60/MWh. The company announced earlier this year that it awarded a contract to the University of Sheffield's Nuclear Advanced Manufacturing Research Centre to develop an SMR demonstrator.

Britain's nuclear energy minister, Richard Harrington, said the report's findings would be considered to expand the government's existing nuclear strategy.

"Advanced nuclear technologies provide a major opportunity to drive clean growth and could create high-skilled, well-paid jobs around the country as part of our modern Industrial Strategy," Harrington said in a statement.

"As outlined in our recent landmark Nuclear Sector Deal, we have already committed up to £56 million for cutting-edge research in this area, as well as up to £32 million in partnership with industry to embed new capabilities in the UK supply chain, and [this report] provides valuable detail on how we could further expand on these opportunities," Harrington said.