Supporting safe and communally beneficial nuclear investment across Europe

Speech by Tim Yeo, NNWE chairman, to the Nuclear Industry Forum on 16 June


I am delighted to have the chance to wind up this important conference.

Congratulations to those of you who’ve survived till the bitter end of the first day.

I will try to pick out some highlights from the day.

But first let me make clear my strong conviction that there’s never been a more important time for nuclear energy.

Every week brings fresh evidence of the growing recognition of the need for more urgent action to address climate change.

I strongly disagree with Malcolm Grimston’s judgment this morning that the new British government will water down its commitment to tackling climate change. On the contrary I expect that between now and 2020 David Cameron will acknowledge and respond to the growing scientific consensus and ensure that Britain continues to meet its emission reduction targets.

Ahead of this year’s Paris Conference of Parties we’ve had the historic and unprecedented declaration by the Presidents of China and the US first to cap greenhouse gas emissions from their countries and then reduce them.

Earlier this month we had an equally unprecedented call from leading oil companies for a global carbon price.

And as Sir David King pointed out this morning we’ve just had confirmation from the G7 of their commitment to a dramatic degree of decarbonisation of the world’s economy.

And in Europe we can be proud of the continued leadership offered by the EU in setting a challenging target for cutting greenhouse gas emissions by 40% by 2030.

The common thread in all these developments is the requirement for a very substantial reduction in emissions from electricity generation.

And that in turn, in my view, can only be achieved if there is a revival of the nuclear industry.

It’s also the view of the International Energy Agency who believe that the nuclear industry must double in size by 2050 if the world is to keep within the 2 degrees centigrade temperature increase that is considered to be the maximum that can safely be permitted.

It was also the conclusion reached by Sweden when the decision made in Parliament 35 years ago to phase out nuclear power was quickly reversed.

In saying that I do not decry in any way the huge progress made by renewable energy in recent years.

That progress will and must continue.

But the world needs renewable and nuclear energy; not or. As Dave King put it we need every tool in the box.

That is why I’ve taken the lead, after retiring from the House of Commons this year, in establishing New Nuclear Watch Europe.

What was striking in the opening presentation from the World Nuclear Association Director General Agneta Rising was how few of the nuclear reactors under construction worldwide are in Europe – only 4 out of 66. That is nowhere near enough to maintain the contribution which nuclear currently makes to meeting Europe’s energy needs.

China, Russia, Korea, India and others all recognise the role nuclear can play. Not everyone in Europe does.

Despite the fact that the potential contribution of nuclear to achieving the necessary level of emissions reductions is considerable.

And as the second of Dave King’s two scenarios showed – if we don’t make very widespread use of offshore wind and CCS, both of which are currently very expensive, then the role of nuclear will have to be enormous if our 2050 target is to be met.

Malcolm Grimston effectively exposed how even in Britain, where since 2008 we’ve had governments which express strong support for nuclear, virtually no actual progress towards building new nuclear has occurred.

NNWE is a group of companies in the nuclear industry which started working together about six months ago to promote the revival of civil nuclear power across the EU.

You will not get three separate and contradictory statements from us about nuclear power of the sort Malcolm Grimston entertainingly quoted from Ed Davey.

I believe unequivocally that there is now an historic opportunity for a renaissance of nuclear power.

Again as Agneta Rising pointed out nuclear power is scalable relatively quickly – provided of course there is political will and public support.

So to exploit this opportunity and to roll out rapid expansion of the industry we need to persuade both policy makers and the wider public that nuclear power is affordable, that it brings economic benefits to those countries which adopt it, and that it is safe.

There’s little or no argument about the effectiveness of nuclear in cutting greenhouse gas emissions.

Little or no argument about the positive contribution of nuclear to enhancing energy security – an increasing concern for many countries particularly in East and Central Europe which are currently heavily dependent on imported fossil fuels.

Little or no argument, at least among people living close to existing nuclear power plants, that nuclear power is clean.

The arguments which still need to be won are to show consumers that nuclear offers value for money.

That it can be delivered in a way which brings real economic advantage to the countries which adopt it and to the communities which host it.

And finally to convince any remaining doubters about its safety, including the safety of its methods of dealing with waste.

At NNWE we recognise that there are some countries in the EU who do not want nuclear power.

We respect that choice because we stand firmly behind the principle that every member of the EU has the right to decide its own energy mix.

That principle needs to be reiterated as discussions go forward on energy union.

I hope that progress towards energy union will actually facilitate the growth of nuclear power.

I was a little disappointed to note that in the EU document about energy union references to renewable energy outnumbered references to nuclear by a factor of six.

I don’t believe that accurately reflects the contributions which these different energy sources should make.

But in any event it’s good news that around half the members of the EU already favour the construction of new nuclear power stations.

Taking the issue of value for money head on the first thing to acknowledge is that a technology that provides secure, low carbon base load power may sometimes cost more than technologies which are not.

Until we have a carbon price which reflects the true environmental and other costs of fossil fuels using coal to generate electricity may often be cheaper than nuclear.

The cost of intermittent renewable technologies like solar and onshore wind will also often be lower than nuclear.

Dave King showed one slide which identified the dramatic fall in the cost of solar power.

Notwithstanding that any countries which want to deliver substantial cuts in greenhouse gas emissions without compromising the security of their electricity supplies may have to be prepared to pay a small premium to do so, at least in the short term.

But paying that premium needn’t always be the case.

Costs in the nuclear industry can be reduced in several ways.

Firstly by rolling out a particular technology at scale.

Secondly by being ready to mix public and private finance.

The British government for example currently enjoys one of the best credit ratings of any borrower in the world.

Given the high capital cost of construction and the long period required to build a new nuclear power station anything that reduces borrowing costs is helpful.

Some creativity in the way construction costs are financed, even in countries where long term state ownership of electricity generation is not the norm, can reduce electricity prices.

Thirdly while safety must always be paramount, and the industry’s outstanding record in this respect in Europe is something to be proud of, care must be taken not to impose requirements on nuclear which are not strictly necessary for safety purposes but which add to costs.

An extremely important point in this respect was made by Agneta Rising about the need for a more coordinated and harmonised approach to regulation.

The potential savings from removing or at least reducing the need to go through a full regulatory assessment whenever an existing tried and tested technology which has already been approved for operation in one or more country is being deployed in a new one.

These savings can be extracted without any reduction in the priority attached to safety.

Finally it’s worth reiterating the potential of small modular reactors, whose applicability to certain markets was rightly stressed by Dave King, to offer cheaper nuclear power.

Turning to the issue of the economic benefits of nuclear these can be captured in a variety of ways.

Countries which develop their own nuclear technology have the greatest opportunities to do this but of necessity these countries will be few in number.

Most EU member states which choose nuclear power will have to deploy technology developed outside their own borders but even in these countries the beneficial economic and employment impact be substantial.

These benefits can go far beyond the civil engineering and supply chain work involved in actual construction. The operating, servicing, regulating and eventually decommissioning functions provide considerable numbers of skilled jobs.

Finally there is the issue of safety which I’ve already referred to several times.

Nuclear already meets more demanding standards than most industries and rightly so. Public acceptance of nuclear power depends on confidence being maintained that these standards are rigorously set and meticulously upheld.

It is a tribute to the industry that support for building new nuclear is often strongest among people with direct experience of the industry, often obtained from living close to an existing nuclear plant.

It is also a tribute to the level of public trust in the independence, competence and integrity of regulators in many countries that support for nuclear power in some parts of Europe scarcely faltered in the wake of Fukushima.

The reputation of regulators remains crucial to retaining that public support.

At NNWE we also believe that when nuclear technology that has been developed outside Europe is used in an EU country its public acceptance will be facilitated if that technology has been tried and tested in its country of origin.

As it happens that principle will also usually help to achieve good value for money and may sometimes smooth the process of gaining regulatory approval in the country where the technology is to be deployed.

So at NNWE we will make the case for investment in nuclear

Based on our conviction that it provides secure, clean, reliable and affordable electricity

And that it can deliver economic benefits across the EU.

We believe that promoting debate about nuclear will itself increase support for it among decision makers and the wider public.

That’s why I’m here and thank you for your attention.