UK's net-zero goal needs new nuclear, says Atkins

In June 2019, the UK became the first major economy in the world to pass laws to end its contribution to global warming by 2050. The government's 2050 net-zero target was recommended by the Committee on Climate Change, its independent climate advisory body. Net-zero means any emissions would be balanced by schemes to offset an equivalent amount of greenhouse gases from the atmosphere, such as planting trees or using technology like carbon capture and storage (CCS). The target requires the country to bring all its GHG emissions to net-zero by 2050, compared with the previous target of an at least 80% reduction from 1990 levels. The UK has already reduced emissions by 42% while growing the economy by 72%. Atkins notes that to achieve net-zero, the UK needs a four-fold increase in low-carbon energy, from 155 TWh in 2017 to 645 TWh in 2050.

"The challenge is not just an energy sector one and will not be saved by major energy projects alone; we must look at how we consume and use energy, in travel, heating and in industry," the company says.

The report notes that nuclear provides about 18% of the UK's electricity, but seven of the country's eight operating plants will be retired by 2030. "Government policy for the past decade has been to replace this capacity, building up to 15GW of new nuclear power. However, large nuclear plants face major affordability challenges, with the cost of capital being a particularly sensitive issue." It says the withdrawal of Hitachi from the Wylfa Newydd project "confirmed that the current UK model for financing such projects is not fit for purpose". The government is considering the introduction of a Regulated Asset Base (RAB) model for financing new nuclear power projects, which could significantly reduce the levelised cost of electricity (LCOE), Atkins notes. A consultation on RAB was launched in July 2019.

However, the report says the net-zero scenario "appears to have dismissed current government policy and the ongoing work to address the financial model". The scenario "effectively curtails new nuclear in the mid-2030s" following the completion of the three plants currently under development: Hinkley point C, Sizewell C and Bradwell B. "Rather than keeping the technically proven nuclear option open, net-zero relies on CCS, of which we have zero current capability, or a much larger amount of renewables and, an as yet undefined, large storage capability."

Atkins says that nuclear energy is "a critical but currently undervalued element" within the UK's energy system. "Nuclear presents a low technological risk but is significantly challenged by the current financial model. With declining UK gas production, nuclear offers the only firm power with assured security of supply and is an essential component for a stable, least cost, energy system.

"It is entirely possible that the least cost route to net-zero will require considerably more nuclear than is currently being considered. If the UK's nuclear new build market is effectively shut down in the mid-2030s it will be both difficult and expensive to resurrect this capability late in the run-up to 2050."

Atkins suggests the government urgently prioritises its consultation on alternative financing models for financing nuclear projects (RAB) and develops innovative approaches to construction risk. It also suggests a review of the electricity market and an evaluatation of the impact of intermittent renewables on firm power pricing.

"We welcomed last month's Queen's Speech with the government's commitments to increase offshore wind capacity, and invest in building a carbon capture storage cluster, however we do need a commitment to significantly increase investment in nuclear to reach net-zero," said Chris Ball, managing director for nuclear and power at Atkins.

The Queen's Speech sets out the government’s agenda for the coming parliamentary session.