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Government holds crunch talks with industry giants over the future of British nuclear energy


The key nuclear power players have been called in by the Government for crunch talks on plans to meet Britain’s energy demands with new small reactor technology, amid mounting fears over delays and Whitehall paralysis.

Industry giants including NuScale, Rolls-Royce, Hitachi and Westinghouse have been summoned by ministers in a bid to reignite interest in the project. They have been asked to present their plans in meetings over the next few weeks.

Small modular reactors (SMRs) are a fraction of the size and cost of major nuclear power stations such as EDF’s controversial Hinkley Point C project.

The Government signalled a key role for the technology in efforts to secure the energy supply and meet climate change targets two years ago.

An apparent lack of action since then has drawn criticism and raised industry concerns that the project has fallen by the wayside amid the political instability of Brexit and the general election.

In May, a House of Lords report branded the Government’s failure to publish the results of a competition for development funding as “particularly alarming”.

Companies considering investments in the technology had hoped that ministers would indicate which proposals they would support months ago, but they received no communication, fuelling the speculation that SMRs were being quietly abandoned.

Renewed government interest in the technology is a boost to the nuclear industry. Rolls hopes to adapt technology developed to power Royal Navy submarines, for instance.

 It has said developing SMRs for civil use will cost £1.2bn, with the first installation expected to require a further £1.7bn. Costs are forecast to fall as more mini reactors are built. Modular design allows the systems to be built in “blocks” in factories then assembled on-site. An SMR is expected to require a site about a tenth of the size of a conventional nuclear power station and generate between 200 megawatts and 450 megawatts of power.

Hinkley Point C, currently under construction in Somerset, is set to generate 3.2 gigawatts. Cost projections on the project have soared from £6bn in 2013 to £20bn, and the first new power is not expected to be generated until at least 2025.

Last month, the National Audit ­Office (NAO) hit out at Hinkley Point, saying taxpayers could face a final bill of as much as £50bn, because the wholesale market price for electricity is falling steadily while nuclear power construction remains expensive and high-risk.

Under a 2013 deal between the Government and EDF, Hinkley is guaranteed to earn £92.50 for every megawatt-hour (MWh) of energy produced through a combination of wholesale market prices and a levy on consumer energy bills. At the time, the Government said this would require top-up payments totalling £6bn from consumers’ energy bills to meet the “strike price”, but falling market prices have widened the forecast gap every year since then.

The NAO criticised the Government’s nuclear plans, saying ministers had “committed electricity consumers and taxpayers to a high cost and risky deal in a changing energy marketplace. Time will tell whether the deal represents value for money”.

Plans for another nuclear plant at Moorside in Cumbria are also in doubt after Westinghouse, the US nuclear ­reactor developer which is owned by ­Japan’s Toshiba, filed for Chapter 11 bankruptcy amid spiralling losses brought about by cost over-runs and project delays.

Toshiba is currently a 60pc shareholder in the consortium to develop the 3.8 gigawatt plant at the Moorside site.

Moving to a new backer could push development of the plant back years with regulatory delays and costs likely to go up.

A spokesman for the Department of Business, Energy and Industry Strategy said of the small reactor plans: “We are currently considering next steps for the SMR programme and we will communicate these in due course.”

Success for SMRs could hinge on developing production lines and export businesses that would increase scale and bring costs down further in the years ahead.

Tony Roulstone of the Cambridge ­Nuclear Energy Centre, a former senior Rolls engineer, recently told The Engineer magazine: “The cost of building nuclear plants is related to their complexity and the work you have to do on site to build them, and nothing the industry has tried has worked. So it’s time to try something else.

“The manufacturing approach works in every other industry. Nuclear is the only industry in which production engineering is not used.”

 Mr Roulstone added: “It’s only by getting into a factory environment and building these things over and over again that you learn how to bring the cost down.”

When George Osborne, the then chancellor, announced £250m of taxpayer funding for development of the technology in 2015, he said the cash would be allocated by 2020.

Mr Osborne, whose time as chancellor came to an abrupt end last year, added that the money would help to “revive the UK’s nuclear expertise and position the UK as a global leader in innovative nuclear technologies”.

Source: The Telegraph

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