14 Jul (NucNet): Nuclear construction in the UK is expensive and slow in comparison to other countries, in part because the UK has not built any nuclear plants since the 1990s and lacks a proven supply chain, a report by the National Audit Office (NAO) says.
The report says the cost of building new nuclear power plants in the UK ranges from around $60 per MWh to about $140/MWh. By comparison, these costs range from about $30/MWh-$55/MWh in South Korea; $50/MWh-$120/MWh in France, $45/MWh-$125MWh in Finland; and about $58/MWh-$100/MWh in the US.
The estimates are based on discount rates of three percent and 10 percent. The discount rate is an estimate of the cost of capital for a given project.
No new nuclear power stations have been built in the UK for over 20 years, the report says. “The UK lacks a proven, skilled supply chain to support the construction of a new power station. The costs to build ‘first-of-a-kind’ power stations will be much higher than in countries that have rolled out new facilities, where learning and expertise can be shared.”
The report says the government’s policy is that new nuclear generation should be privately-financed. However, it says there are very few private companies able to risk such large upfront investments with such a long payback period. Many companies in the European utility sector, which would be potential investors, have faced financial pressures in recent years, partly due to falls in wholesale electricity prices.
Nuclear power plants have very high upfront costs and take a long time to build, the report says. Costs have increased in recent years given the extra safety considerations following the Fukushima-Daiichi accident and increasing terrorist threats. These are offset to some extent by low running costs, which are not linked to the price of fuel in the way that gas, coal and oil power plants are. This means investments in nuclear power have a very long payback period.
The report notes that the UK's Department of Energy and Climate Change intends to have 14,000 MW of new nuclear construction operating in the UK by 2035. But progress in encouraging investment in new nuclear power stations has been slower than for other low-carbon technologies.
The report says the deal to build EDF Energy's planned Hinkley Point C power station in western England, with two EPRs, is the most advanced nuclear project because it is the only one with development consent, a site licence and regulatory approval. “Even on this project EDF’s final investment decision has been subject to ongoing delays and it is still uncertain when EDF will begin constructing the facility,” the report says.
The report is online: https://www.nao.org.uk/report/nuclear-power-in-the-uk
