CIVITAS - Safeguarding Britain's £4bn nuclear industry
3 Jun 2014 10:34 AM
UK nuclear expertise is under
threat as new plant projects go to foreign companies
• A programme of government
support is needed to reinvigorate the British supply chain
• New class of small
modular reactors offers cheaper, quicker alternative
Britain risks losing its
£4 billion-a-year nuclear industry unless the government does more to
ensure domestic firms will benefit from projects to rebuild the UK's
generating capacity over the coming years, a new paper published today by the
cross-party think tank Civitas says. (Read the full report here.)
The three companies intending to
build new nuclear power stations in the UK - French state-owned EDF, plus
Japan's Toshiba and Hitachi - already have their own established supply
In the latest of the Civitas
series Ideas for Economic Growth, entrepreneur Candida Whitmill calls for a
programme of government support for a new line of smaller reactors which are
quicker to build and could be manufactured largely in the UK.
Small Modular Reactors (SMRs) -
defined as reactors of less than 300MW - could provide an attractive
alternative to the high-risk and eye-wateringly expensive projects currently
Such a plan would help safeguard
UK nuclear expertise built up over 60 years and which has an estimated annual
turnover of £4 billion, she writes in 'Use It or Lose It: A business
case for an alternative way to rejuvenate the UK nuclear
Whitmill, managing director of
Penultimate Power UK Ltd, a UK-led consortium to build SMRs in Britain, warns:
"Outsourcing nuclear power projects that the UK will be committed to for
the next 60 years must be handled carefully if our indigenous industry is not
to be diminished.
is welcome, if in collaboration with UK businesses. The government has two
options; let the UK become merely a host nation whence other nations can
springboard their global nuclear ambitions and lose our own nuclear capability;
or choose to let the start of a new-build programme of nuclear power reignite
the UK's nuclear supply chain, expand our fuel cycle facilities and
showcase our world-class research and development capability.
"Supporting a programme to
bring smaller, affordable, secure, small modular reactors to UK-based
commercialisation could do just that."
Among the advantages of the SMR
model is that they:
• Are built more rapidly,
typically in three rather than eight to 10 years, giving a faster return on
investment at a lower capital cost;
• Can be built off site, in
factories, reducing costs and risks;
• Mostly use fuel with less
than 5% enrichment, satisfying concerns about proliferation;
• Are far more compatible
with intermittent renewables than larger reactors when it comes to balancing
the National Grid.
The UK could supply the
necessary forgings for SMRs and already has the capacity to supply more than
70% of other nuclear components, she adds, presenting an opportunity to secure
demand for Britain's advanced manufacturing skills.
SMRs are being pursued by
several countries keen to have access to secure low carbon energy without the
prohibitive upfront capital costs and uncertain timescales that plague larger
The US Department of Energy is
already implementing a comprehensive programme supporting SMRs through to
commercialisation, offering $452million of match-funding to incentivise
developments; this money helps support the expensive process of engineering,
design certification and licensing.
"In trying to rejuvenate a
domestic nuclear industry, the UK is in a similar situation to the US,"
"The rewards are high in
terms of a full panoply of jobs across design, manufacturing, construction,
services and R&D activities, coupled with economic growth, but it is
recognised that the market alone will not open up this opportunity due to
unsustainably cheap shale gas and international government-owned corporations
with access to cheap finance capital."
As things stand, the UK nuclear
industry faces an uncertain future as foreign companies position themselves to
rebuild the UK's nuclear capacity.
"The UK nuclear industry is
now entirely vulnerable to the political agendas of other countries. Only
government-owned utilities have the capacity to fund these massive projects
which will each take about 10 years to build. Significantly, these global
utilities already have their own established supply
Whitmill questions whether
British firms stand to gain as much from the deal for EDF to build two reactors
at Hinkley Point C, in Somerset, as Energy Secretary Ed Davey has
"If Hinkley C is the first
of several new reactor sites to be developed over the next decade, then it is
vital that the UK's supply chain can fully participate from the outset of
the UK's nuclear new-build programme.
"Yet, with EDF planning to
use their own supply chain, UK input of any significant value could be in
doubt. The 40 per cent equity to be held by two Communist state-owned
corporations adds another complexity.
"Where opportunities for
the UK supply chain exist, there may be long time-lapses between the three
disparate projects. Such uncertainty is not conducive to investment in the
human and physical resources essential to sustain a robust supply
"Without an additional,
more accessible market, the UK's supply chain may not be able to
participate fully in the nuclear renaissance and risks being left behind; a
scenario that the government, which has woken up to the value of an advanced
manufacturing sector, is surely keen to avoid."
'Use It or Lose It: A
business case for an alternative way to rejuvenate the UK nuclear industry'
can be accessed here. It is the
eleventh in the Civitas series Ideas for Economic Growth, which is part of the
Wealth of Nations programme. More details can be found here.
Candida Whitmill is Managing
Director of Penultimate Power UK Ltd, a UK-led consortium to build small
modular reactors in the UK for the domestic market and export.