Why the UK is the premier country to develop new nuclear
I was asked to speak about the politics of nuclear at an event in the City yesterday. This was held under Chatham House rules so all I can say was that it was a very interesting gathering of top nuclear scientists and industry people held at the office of a big private equity firm.
With both of the main UK parties committed to keeping nuclear as part of the UK energy mix I was able to be positive, although continued political leadership is required to ensure the UK benefits fully from a nuclear resurgence. The majority of the discussion however focused on the cost of new projects, which led me to raise a few points.
Safety is and must always be the paramount consideration when building new nuclear power stations but we should ensure our safety requirements address actual rather than theoretical risks. New nuclear power plants must be able to meet the UK’s rigorous safety demands but these demands should not include protection against events which cannot occur in the UK and could push up the cost of projects unnecessarily.
The UK’s fine tradition of innovation and research makes it a natural place for first of a kind reactors to be built. There are obvious benefits for our supply chain from hosting such reactors but if we use technology that has been tried and tested in other markets abroad, this will inevitably bring cost reductions. We must be pragmatic about this balance and focus on obtaining the best value for money for consumers.
Lastly a large part of the budget of a new nuclear power station is the cost of capital. The UK Government has an exceptional credit rating and if we could use this access to cheap finance during the construction phase of a nuclear power plant and then sell the completed asset to an operator as soon as construction was completed this could have a dramatic impact on the overall cost. Of course the Treasury is rigidly against such state involvement in nuclear new build projects but perhaps now is the time for the economic reality of this argument to win out.