Nuclear's role in UK's low-carbon, industrial strategies

25 January 2017

The UK government has highlighted the role of nuclear power among its responses to a report by the Energy and Climate Change Committee. The parliamentary committee published its Third Report of Session 2016–17, The energy revolution and future challenges for UK energy and climate change policy, last October.

The government's response, which was received by the Business, Energy and Industrial Strategy Committee on 19 December, was published on 20 January.

Meanwhile, in its Green Paper on post-Brexit industrial strategy, published on 23 January, the government has warned there are acute and urgent skills shortages in key industrial sectors in the UK, including the nuclear industry. In the UK, a Green Paper is a preliminary report of government proposals that is published in order to provoke discussion.


The government said it recognises the potential benefits that small modular reactors (SMRs) could offer the UK, in terms of the possibility of shorter deployment times, reduced costs of nuclear energy and industrial opportunities. To explore this potential, in March last year, it launched phase one of its SMR competition, with the objective of gauging market interest in developing, commercialising and financing SMRs in the UK. Over the summer, officials met with 32 eligible phase one participants, including technology vendors, service providers and potential investors.

"As the Committee suggested in its 2014 report Small nuclear power, it is important to establish the commercial viability of SMRs. To gain a better understanding of this and other key aspects of SMR technologies, the government is drawing on the outcome of Phase One meetings, the Expressions of Interest documents submitted by applicants, the findings of the Techno-Economic Assessment, and our continuing discussions with regulators," the government said in its response. "It is only through a robust evidence base that the potential benefits of SMRs can be accurately evaluated, and it is this evidence that is now shaping the government's considerations for the future of the competition," it added.

SMRs are "only one element within the wider field of nuclear innovation" that the government is looking to support, it stressed.

As part of the nuclear research and development program announced by the government in the 2015 Spending Review, Business, Energy and Industrial Strategy (BEIS) has now invited the first tenders to access funding worth more than £20 million ($25.18 million).

"This financial support will help foster the next generation of nuclear innovation, in areas such as reactor safety and efficiency, fuel research and materials science. The progress made in these and other areas will deliver benefits to the whole nuclear sector, including in the development of any future UK SMR," the government said.


Nuclear fusion power reactors are not currently available for commercial deployment and it may be a "number of decades" before this changes, the government said. The UK remains a "key actor" leading global innovation in fusion, hosting the world's largest and most capable fusion reactor, the Joint European Torus, at the UK Atomic Energy Authority's site in Culham, it added.

This has "informed understanding" of how to control and produce energy from fusion fuels for over three decades, it said, and "spearheads the way" towards developing a high capacity fusion power plant. It is essential to the development of the International Thermonuclear Experimental Reactor - the next phase of an international collaborative program to develop fusion energy, which is being constructed in France and to which the UK has access through its Euratom membership, it noted.

The UK is also home to the developers of other innovative fusion energy systems, which may offer "more compact, efficient devices", as well as alternative approaches to heating and handling the fusion fuel, the government said. Phase one of the SMR competition has attracted and included developers of innovative fusion energy systems alongside those of fission systems, it added.

Tripartite collaboration

On the Committee's recommendation that there be "tripartite collaboration" between academia, industry and government where projects help to address the UK's long-term decarbonisation goals, the government noted that, since 2011, it has supported at least £1.27 billion in low-carbon innovations across the energy sector. In the 2015 Autumn Statement, the government announced it would double the UK's energy innovation over the next five years, such that by 2021, it would amount to more than £400 million per year. This also forms part of the UK's commitment to the global clean energy research and development initiative, Mission Innovation, it added.

To deliver these innovation programs, the government said it is working closely with partner bodies including Innovate UK, the Energy Systems Catapult, and the Offshore Renewables Catapult, National Nuclear Laboratory as well as with industry and academia, including through the Energy Technologies Institute and Energy Research Partnership.

The transition to the low-carbon economy offers "real economic and investment opportunities" that the government says it will also be working to maximise as part of its Industrial Strategy. As an example, it said cutting energy use can cut costs and raise productivity, as well as cut emissions, and developing low-carbon sectors such as offshore wind, storage and nuclear offer "huge economic opportunities" for the UK.

The merger last year of the business and energy portfolios under BEIS is a "significant opportunity to develop cohesive policies for all UK businesses in this area", it said.

Industrial Strategy

In its Green Paper on post-Brexit industrial strategy, the government said skills shortages specific to certain sectors "force some employers to look overseas to fill certain vacancies".

"Even with shortfalls in STEM (science, technology, engineering and mathematics) skills and technical education addressed, we could be left with shortages in particular specialisms - such as those faced by the nuclear industry - unless we develop a better system to identify and fix emerging gaps," it said.

"We recognise that previous efforts by the government and industry to forecast skills shortages have lacked the accuracy to enable timely and effective action, and that further action could be taken to ensure that we can better identify and address future shortages. Part of the problem has been the lack of a single authoritative source: the UK Commission for Employment and Skills, the Low Pay Commission, the Migration Advisory Committee, and individual sectors have produced assessments focused on their specific remits.

"But no organisation has been tasked with identifying persistent or emerging sector specific gaps and proposing action. We will now work towards a single, authoritative view of the gaps faced by the UK now and in the future."

The government is also working on a new approach to nuclear skills, it said, "with a view to taking a holistic approach to the needs of the government and industry".

Leadership from business has been key to the success of sectoral policies in the UK and other countries, it noted, and suggests setting an 'open door' challenge to industry to come to government with proposals to transform their sectors through 'Sector Deals'. The government will work with sectors that "organise themselves behind strong leadership to help deliver upgrades in productivity", it said. This could involve: addressing regulatory barriers; promoting competition and innovation; working together to increase exports; and working together to commercialise research.

"Sector deals will be driven by business to meet the priorities of business," it said, adding that it welcomed initial work on early sector deals, including from Lord Hutton on improving UK competitiveness and skills in the nuclear industry.


On supporting private sector infrastructure investment, the government said it is "taking the necessary decisions to drive forward progress on specific critical projects". These include confirmation of Hinkley Point C - the first new nuclear power station to be built in the UK for a generation.

In addition to taking the decisions on major projects, the government said it is creating a framework to enable higher levels of private investment in infrastructure. This includes infrastructure bonds and loans, and Public-Private Partnerships.

"The Autumn Statement also committed to the exploration of a new pipeline of projects suitable for delivery through the Public-Private Partnership scheme PF2, to be set out in early 2017. This will provide new opportunities for the private sector to play a role in delivering infrastructure," it said.

During the last decade, energy policy in the UK was often discussed through the framework of a 'trilemma' - the need simultaneously to find policies that would contribute to meeting climate change targets, guaranteeing security of energy supply and minimising energy costs, the government noted.

"Nearly ten years on from the Climate Change Act, that framework requires updating," it said. "Security of supply is, of course, foundational - and the lack of a long-term energy strategy over previous decades saw the planned closure of energy generating capacity without its adequate replacement being secured. Much progress has been made through the successful launch and operation of Capacity Auctions, as well as Contracts for Difference bringing forward substantial renewable capacity, and more recently the decision to proceed with Hinkley Point C," it added.

The government is committed to meeting its legally-binding targets under the Climate Change Act and how it will continue to meet its obligations will be set out, as required, in the forthcoming Emissions Reduction Plan, it said.

"This means that in the years ahead two important areas of energy policy require a higher priority: the affordability of energy for households and businesses, and securing the industrial opportunities for the UK economy of energy innovation," it said. "Some types of energy, such as nuclear power, require upfront investments that are too large for the market alone to deliver," it added.

Harnessing the industrial opportunities from new energy technologies, Britain is well-placed to benefit from the transition to a low-carbon economy, it said.

"In many parts of the energy sector - from decommissioning to new build - the UK has a depth of expertise and experience that present a major opportunity for domestic employment and export earnings. The role of the industrial strategy is to make the connections between public policy decisions and industrial opportunity so that the full value can be obtained," it said.

"In nuclear, the decision to proceed with the first new nuclear power station in a generation at Hinkley Point is accompanied by a commitment to develop a strong UK supply chain to support the sector, with EDF expecting over 60% of the project's construction value to be placed with UK companies.

"In turn investment in nuclear skills - at college and university level - is upgrading both the domestic capacity to provide the labour required and the level of skills and income in the local workforce," it said.

Good news for industry

The UK's Nuclear Industry Association (NIA) welcomed the government's Green Paper setting out its vision for a modern industrial strategy, including a focus on improving competitiveness and skills in nuclear new build. The UK's civil nuclear industry employs over 65,000 people and generates a fifth of its electricity.

In a 23 January statement, the NIA said, "With plans in place for a new nuclear power program, there is considerable opportunity for the supply chain across the UK, boosting not only their capability, but maximising the economic befits as we replace retiring power stations."

The UK is also at the forefront of the development of SMR technology, it said, adding this "could be an important part of ensuring the UK's nuclear industry realises its full economic and industrial potential".

Lord Hutton, co-chair of the Nuclear Industry Council and chairman of the NIA, said in the same statement: "The nuclear sector has great potential to contribute to the UK economy. I look forward to working with the nuclear industry and the government to develop proposals for this sector as part of the new Industrial Strategy."

The NIA represents more than 260 companies including nuclear power station operators, new build developers and vendors, those engaged in decommissioning, waste management, all aspects of the nuclear fuel cycle, supply chain and consultancy companies.

Researched and written
by World Nuclear News