Nuclear in the UK – what is the endgame?

TL;DR

• As a low-carbon, cost-effective, and reliable energy source, nuclear power has a role to play in the energy transition.  

• After an extended period of stagnation, the global nuclear industry has attracted renewed interest with many countries reversing their phase-out policies and choosing to construct new nuclear plants.  

• In the UK, nuclear power has been on the backburner since the 1990s with capacity gradually reducing over time and only one new nuclear power plant expected to come online in the next decade. 

• While governments have pledged support to the industry and aim to increase capacity to 24 GW by 2050, their approaches have been inconsistent, and investment has been limited. The new Labour government has committed to supporting and expanding the UK’s nuclear capacity, but more concrete plans have not yet been shared.  

• Small Modular Reactors could offer a solution to help plug the UK’s nuclear capacity gap, mitigating many of the limitations that have hindered the industry such as investment, safety, and space concerns. They could also improve the economy, providing 40,000 jobs by 2050.   

The detail

If the UK is to achieve net-zero by 2050, the energy transition must consider low carbon energy sources that can complement renewables like solar, wind and hydropower. A grid purely powered by renewables might be the ideal, but the immediate reality is that a diversified energy mix will give the UK the best chance of achieving its ambitious climate goals.  

As a tried-and-tested low-carbon energy source, nuclear could have an important role to play in the race to net-zero. Compared to fossil fuels, nuclear power has a small carbon footprint; in fact, a single uranium fuel pellet can produce as much energy as 800kg of coal. While there have been safety concerns in the past, nuclear is now considered a safe and reliable source of energy that requires considerable upfront investment but is cost-effective in the long run.  

In recent years, the benefits of nuclear energy have become more widely acknowledged. Some experts now believe that the countries using nuclear and renewable energy in tandem will be the most successful at combating the effects of climate change. This shift in attitudes was apparent at the UN Convention on Climate Change, which took place in Dubai in December 2023. More than 20 countries (spread across four continents) attending the event officially recognised the importance of nuclear power, launching the Declaration to Triple Nuclear Energy. 

This renewed interest in nuclear power is being touted as a watershed moment for the industry. Policymakers, companies and researchers are all starting to consider the potential of nuclear power more seriously. As Francesca Giovannini, nuclear policy expert at the Harvard Kennedy School, puts it: “This is a moment of truth.” 

A sector in stagnation  

However, realising nuclear energy’s potential won’t happen overnight. A substantial amount of work will need to be undertaken worldwide to help the sector emerge from an extended period of stagnation.  

Nuclear power currently produces around 10% of the world’s total electricity and is the second largest source of non-fossil energy after hydropower. Even so, according to the Pathway to Net Zero by the International Energy Agency (IEA), global nuclear capacity must double by 2050 to achieve net-zero, while research from the OECD Nuclear Energy Agency and World Nuclear Association paints an even more negative picture, projecting that nuclear capacity must triple to hit global emissions targets.   

Happily, nuclear is starting to see a comeback. Several countries, governments, and investors have changed their stance on the energy source in recent years. China, India, France, the USA, Canada and Poland have all expressed interest in expanding their nuclear power capacity, Japan has restarted many of its reactors, and South Korea has reversed its nuclear phase-out policy. Globally, there are currently 440 nuclear power plants in operation and 60 currently under construction, including a new plant in Egypt. 

An appetite for uranium? 

There are several factors driving this policy shift. Ever since the Chernobyl disaster in 1986, the safety of nuclear has been an understandable concern. However, innovations like Small Modular Reactors (SMRs), which are a fraction of the size of full-scale plants, reduce the potential scope for mass disasters and employ new technologies to prevent meltdowns. Statistically speaking, nuclear power has also proved to be less deadly than wind power since its inception.  

Global events have also helped to sway public opinion. Russia’s invasion of Ukraine has highlighted the importance of energy security, while the visible effects of climate change and cost-of-living crisis have both outlined the importance of taking environmental concerns seriously while offering competitive pricing.  

In the UK, nuclear has been in decline since the 1990s. Currently, the country has approximately 6.5 GW of nuclear capacity, which accounts for around 15% of its electricity supply. This is a marked decrease from 30 years ago, when nuclear was responsible for just under 25% of the UK’s total electricity supply. In the intervening years, eight nuclear plants have closed and the majority of the UK’s remaining capacity is set to be retired by the end of the next decade. While a new plant – Hinkley Point C – is expected to come online in the next 10 years, the capacity increase it offers could be cancelled out by these upcoming retirements. 

The UK’s current nuclear energy output is a far cry from the 1970s when the country was considered to be a global leader in civil nuclear power. The last new nuclear power station – Sizewell B – was completed in 1995 and there are four others still in operation. However, positively, these stations have been running safely for more than 60 years. 

A new approach  

That’s not to say that there isn’t appetite for growth in the sector. The 2008 Energy Act transitioned the UK’s energy policy to prioritise carbon emission reduction, but the invasion of Ukraine caused another shift in 2022 and led to the government announcing plans to accelerate homegrown power to improve energy independence, security and prosperity. Great British Nuclear was also founded to bring forward new projects and a £120 million Future Nuclear Enabling Fund launched to “support development of nuclear projects, stimulate competition in the industry and unlock investment”. 

This funding aligns with the government’s new target; expanding the UK’s nuclear capacity to 24 GW by 2050 to meet 25% of the country’s electricity demand.  

In January 2024, Rishi Sunak’s government outlined plans to meet this goal through the biggest expansion in nuclear power in 70 years. Known as the Civil Nuclear Roadmap, plans included investing up to £300 million in nuclear production, exploring the construction of a new large-scale power plant, and committing £10 million to develop the skills and sites required to produced advanced nuclear fuel in the UK.  

The new Labour government appears to be similarly committed to helping the UK close its nuclear capacity gap. In its manifesto, the party explicitly called out nuclear power and pledged to ensure the long-term security of the sector, extend the lifetime of existing plants, and ensure Hinkley Point C opens on schedule. A recent announcement that the Department for Energy Security and Net Zero is proposing a scheme to help fund the construction of new nuclear plant, Sizewell C, is a positive indication that nuclear will remain a priority under Labour.  

Small but mighty 

It’s not just new large-scale nuclear power plants that the UK will need to meet its targets, Small Modular Reactors (SMRs) will also need to be part of the mix.  

SMRs are advanced nuclear reactors that have a power capacity of up to 300 MW per unit, giving them around a third of the generating capacity of a traditional plant reactor. They are also easier to construct, can be located on sites not suitable for larger plants, and only require refuelling every three to seven years (compared to every one or two years for conventional plants). The world’s first floating SMR – Russia’s Akademik Lomonosov – started operating in May 2020, and more than 80 others are being developed worldwide. Even so, SMRs won’t be a silver bullet and there are concerns that they might not ever be commercially viable.  

In 2021, the Conservative government gave a funding grant of £210 million to Rolls-Royce’s SMR. Marketed as a low-cost clean energy solution, SMRs like those created by Rolls-Royce are quicker and easier to construct and integrate into the grid with 90% of the manufacturing and assembly activities carried out in factory conditions. According to Rolls-Royce, SMRs have the potential to create 40,000 UK jobs by 2050, generate £52 billion for the economy, and support international decarbonisation efforts with exports worth £250 billion.  

If the UK is to effectively harness nuclear power alongside renewables and achieve net-zero by 2050, a considerable mountain is still yet to be climbed. The need is clear; EDF energy estimates that low-carbon power generation will need to quadruple for the UK to hit its targets. The country’s private energy industry is also challenging, making it harder to co-ordinate major capital investment and enable the government to effectively plug the gap.   

Investment isn’t the only limiting factor. Historically, the government has had a short-term and reactive approach to its energy strategy. Delivering new and advanced nuclear power was one of the points in the Conservatives’ 10 Point Plan for a Green Industrial Revolution, for example, yet the launch of Great British Nuclear was delayed and, by the time Rishi Sunak left office, nuclear power projects still hadn’t received green status. 

With the launch of GB Energy, a focus on energy security, and Labour’s explicit mention of nuclear power in its manifesto, there is reason to be optimistic about the future of nuclear in the UK. SMRs also offer a new way forward, mitigating concerns around investment, safety and the space required.  

With that said, vague pledges and platitudes won’t move the needle. A sustained and proactive approach to rebuilding the UK’s nuclear sector at scale is needed if the industry is to fulfil its potential and help the country achieve net-zero.  

— Lew 👋

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