Do we need nuclear for net zero?

Back in December last year, Boris Johnson’s government published its Energy White Paper, setting out plans to transform Britain’s energy system (reaching zero emissions within the energy supply by 2035), while also promising a fair deal to consumers. Among the numerous pledges and targets was a commitment to invest in nuclear power – with the Prime Minister reiterating his promise to build at least one new nuclear plant this parliament.

But despite the positive political noises, Britain’s nuclear power base remains in a chronic state of uncertainty. Long-promised projects (including Hinkley Point C) have been stalled by delays, and existing plants are due to close in the coming years. For its part, the nuclear industry has stepped up its warnings that, without investment in the sector, Britain could not only find its net zero hopes dashed, but its usage of fossil fuels increasing – with customers left paying higher bills for the privilege.

Are they right to sound the alarm? To get to the bottom of that question, The Spectator hosted a panel discussion at this year’s Conservative party conference – bringing together politicians, experts and industry advocates for an informed debate. With The Spectator’s economics editor Kate Andrews as the chair, the panel comprised Tom Greatrex, chief executive of the Nuclear Industry Association (who sponsored the discussion); Virginia Crosbie MP, vice-chair of the nuclear energy all-party parliamentary group; Rachel Millard, the Daily Telegraph’s energy correspondent; and Professor Jim Watson, professor of energy policy at University College London.

To kick off the debate, Tom Greatrex set out the investment case for nuclear power. ‘What nuclear does is that it provides a lot of zero emissions power, and without any detrimental impact from the weather,’ he said. ‘What’s more, it also generates a lot of power from a very small site – which minimises the environmental impact on the landscape – and also creates long-term skilled jobs that benefit local communities and boost economies.’

It was an argument that resonated with Virginia Crosbie, whose constituency, Anglesey, contains the proposed nuclear power plant at Wylfa Newydd (currently on a potentially indefinite hiatus). ‘People in my constituency say they want good quality jobs,’ she said. ‘And building Wylfa Newydd would do just that, delivering around 8,000 construction jobs and around 800 jobs on an ongoing basis. It’s exactly the kind of thing that’s crucial for “levelling up”, which is just what we need in North Wales.’

So if nuclear could help deliver net zero and the elusive ‘levelling up’, why had the government been so slow to invest? For UCL’s Jim Watson, it wasn’t so simple. ‘I think often in these discussions about how we meet net zero power by 2035, we end up focusing on a single technology, when actually the reality is that we’re going to have a mix of technologies,’ he said. As well as renewables themselves, these would include technologies that improved the system. These included energy storage and making the grid itself flexible (i.e. to allow domestic solar panels to feed their surplus energy back into the grid).

Did we need nuclear to reach net zero? ‘Not necessarily,’ he said. ‘It certainly makes it easier, and not having it might well make it more expensive. Although if we don’t have the technologies that can capture carbon from fossil fuels – like carbon capture and storage – then nuclear becomes a lot more necessary to decarbonising the energy system. I can certainly see the case for building a couple of new nuclear power stations, but I don’t think it should be the first thing on the list. Partly as it’s still quite expensive.’

Is there anything that could be done to bring the cost down? More recently, for example, the government had begun to move to a new funding model – known as the regulated asset base – under which customers would essentially provide advance financing (via their energy bills) for new nuclear power plants while they are being built, but before they start producing power. This would then make it easier, in theory, to attract additional private investment for the project. ‘I think it’s possibly quite a risky model for the government,’ said the Telegraph’s Rachel Millard. ‘Particularly given how high energy costs are.’ It was part of the reason, she said, why nuclear power was such a controversial topic for her readers.

One company that was prepared to invest in UK nuclear power was the China General Nuclear Power Group (CGN) who, in 2015, signed a deal to invest £6 billion into the proposed new plant at Hinkley Point. But six years on, and with severely heightened concerns around Chinese involvement in national infrastructure, the partnership looked certain to be scrapped. Yet Greatrex insisted that, for all the comparisons to Huawei, the situation with CGN was more nuanced. ‘For a start, CGN is just a minority shareholder,’ he said. ‘The technology and the supply chains are not Chinese, and neither are the critical elements of the project.’

He also pushed back on Watson’s suggestions that nuclear power was too expensive. ‘I think you have to be very careful making crude comparisons between the strike price on, say, Hinkley Point C and the last auction on wind energy,’ he said. ‘For a start, it ignores the strike price of the first wind projects, which was probably much higher. It also ignores the fact that, once you build the first plant, you learn things that help you build the second cheaper. That’s exactly what happened with offshore wind, and it could happen with other technologies.’

But even if the energy turned out to be cost effective, no one was disputing the fact that building new nuclear plants would require significant upfront investment. So what did the panel consider to be the fairest way (if there was one) to deliver that? ‘Frankly, I think that, if you have to subsidise it, then the fairest way is to do it through taxes: rather than through energy bills,’ said Watson. ‘I think with all these large capital expenditure infrastructure projects, you do need government support,’ added Crosbie. When it came to the great, green transition, it was one more project to add to the menu. And – with its own net zero deadlines looming – the government was running short of time to make up its mind.