HIGH PEAK BUSINESS CLUB
MEETING 15 September 2023 with TOM GREATREX, CEO Nuclear Industry Association
It’s nearly 70 years (July 1954) since civil nuclear power for electricity generation became a reality in the UK. Einstein once joked that it’s a very expensive way to boil a kettle, but he wasn’t thinking of the impact of carbon fuels on the environment, or economies of scale when plants move from niche to normality.
My interest was piqued by the Telegraph Business headline of April 2023, “Inside fight to break Putin’s hold on nuclear fuel” where local businesses were mentioned as seeking to replace the West’s dependency on imported enriched uranium. Westinghouse in Springfields, Lancs (near Preston), received £13m in December from the UK taxpayer to expand; Urenco, British-Dutch-German firm, part-owned by the government, has been in Capenhurst, Cheshire for 50 years. In fact our area is in North West Nuclear Arc, from the old Wylfa site (Anglesey) to Sellafield in Cumbria, where everything from power generation to isotopes for medicine to decommissioning and waste disposal is proceeding apace. The Nuclear Arc is unique in the UK; the intention is that it should be “widely recognised as a world class, self-contained, end to end nuclear system all within a very compact geography” according to the website.
Tom Greatrex our speaker used to be a politician in Scotland, but more recently has run the trade association on behalf of some 280 companies – “from massive EDF running our nuclear power stations to one man companies offering local services.” He also works with other countries. Some have hardly any nuclear power – think Germany, which has left them “at the mercy of geopolitical events;” others, especially France, Japan and South Korea, have far more than the UK. France’s electricity is 75% from nuclear with the rest mostly hydroelectric, so when our Prime Minister says we have cut greenhouse gases faster than France, that may be true: but they are starting way, way below us.
We have a long way to go. About 5.5 gigawatts of UK electricity generation currently comes from nuclear; by 2050, if we are to achieve Net Zero on time, we will need 24 gigawatts. Add to that, demand for electricity is likely to increase sharply as we move away from gas (currently providing 40% of our electricity generation) but also heating our homes, and as population increases and we embrace electric vehicles. Even so current planning is that nuclear will provide a quarter of those needs with renewables making up the rest. That’s a tall order.
“We are playing catchup,” said Tom. Apart from Sizewell B (and that’s only 1 Gwh), the rest of our nuclear power plants, built in the 70s and 80s, are coming to the end of their life. Some have already lasted a lot longer than anyone expected, new ones might have a life of 70 years or more. But first, we have to build them.
Hinkley Point C in Somerset is under way with 9,500 people on site. It will have the capacity to produce 3.2Gwh of electricity, will cost £20bn and will provide power for at least 60 years. Operator EDF won’t earn a penny till the first customers are billed, which has inflated the cost of capital and undermined investor interest. At last however that financial regime is being changed to enable a return on investment during construction. Now we’re awaiting a decision on Sizewell C (but “it’s likely to go ahead”) – that’s the same French designed reactor technology as at Hinkley, and has been delayed partly because of anxiety about Chinese involvement, which has now ceased.
It’s not just worries over greenhouse gases which have pushed nations towards nuclear power; it’s also the changed outlook for pricing. When the current construction was announced, howls of rage greeted the price of 90p per Kwh. During last autumn the spot price reached 1000p/Kwh, and suddenly nuclear looks cheap. “It has another plus – it’s dense, in that you get a big output from a small profile,” Tom explained. The perceived downside, being capital intensive and having very long build times, is offset by staying in service a very long time (unlike wind turbines which will need renewing every 25 years or so), securely, with no imports required. And the next revolution is the advent of Small Modular Reactors, where Derby-based Rolls-Royce is champing at the bit.
Tom corrected one misunderstanding – SMR based power stations won’t all be small. They could have a number of reactors all wired together – a bit like the batteries under my Tesla – or be single units generating more than 400Mwh each, not much smaller than a Magnox. But they would be fabricated en masse off site, which makes erection on-site much speedier, with less disruption to the neighbours, and is a lot cheaper than traditional models. To begin with they can go on sites with existing nuclear licenses. Maintenance will be easier – at present, nuclear power stations are available 85% of the time, taking a break when shut down for maintenance. But it’ll be possible to turn off only certain SMRs in the matrix, so that power is continuously generated. That too will cut net operating costs.
In July the government launched “Great British Nuclear” tasked with developing a resilient pipeline of new nuclear builds, but apart from a name and a website (looking a bit like GB News!) it’s as yet unclear how it will function. It’s just been announced (2 Oct) that six companies have been selected to go forward to the next SMR stage – EDF, GE-Hitachi, Holtec, NuScale Power, Rolls-Royce SMR and Westinghouse. “The ambition is to announce in spring 2024 which of the 6 companies the government will support, with contracts awarded by summer 2024,” says the official press release, but as Tom pointed out, it’s almost certain that RR will be involved, not least because this is British technology and potentially exportable. Ultimately about half the needed 24Gwh will come from SMRs made in the UK. That’s HUGE. Win-win, perhaps?
We often ask how all this will help the neighbourhood. Hinkley shows what might happen: management there has been determined to mesh with local businesses but that can be hard in remote areas. So in catering, a consortium of small local suppliers has been created to avoid contracts all going to large national or supra-national providers.
Growth is exponential – employment in and by the nuclear industry has leapt from 64,000 in 2022 to an estimated 77,000 this year, of which 27,000 is here in the north west. The Nuclear Advancement centre in Sheffield was referenced several times; there’s ongoing decommissioning; fuel from Springfield in Cheshire can be safely stockpiled for a long time; new sources of the feedstock uranium are being developed as in Canada, with active collaboration under way with the UK, Japan, USA and Canada to ensure fuel security.
Polls are also showing consistent and high support for nuclear power, currently standing at 82% in answer to the question, “Should nuclear be part of the mix?” So much that people fear is simply wrong. What we see emerging from cooling towers is not radioactive, it’s steam. The amount of active waste from 70 years atomic power in the UK wouldn’t fill half an Olympic size swimming pool; it caused far less damage than the amount of CO2 emitted from traditional power stations in the same period. The answer is to vitrify the waste, put it in concrete and store it in a warehouse – in Sellafield you can see some and even “give it a hug” said Tom. Hmmm…!! At Fukushima, he said, nobody died as a result of radiation, but 20,000 died in the tsunami. Although the Japanese government’s first reaction was to end its dependence on nuclear, that decision has since been reversed, and the Japanese have become much less reticent in talking up nuclear. Needs must.
His talk gave us a sparkling hour of knowledge, information and news; one of the most timely talks (along with HyNet) that our Club has enjoyed recently. At some point, when the contracts have been let we will invite Rolls-Royce to talk to us. Next year, maybe.