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end of 2020 regardless of Brexit. Beyond 2020, the future of JET as a collaborative European facility will depend on the outcome of UK-EU negotiations. The UK’s participation in the International Thermonuclear Experimental Reactor (ITER) fusion mega project may be affected by EU exit, although the UK has been clear that it expects any future association to include continued participation in the EU’s umbrella project for ITER.

Assessment

The United Kingdom remains a leader in the civil use of nuclear energy. Its institutional infrastructure is sound and all the important issues of nuclear power development, which include regulation, financing, construction, supply chain, fuel supply, skills, and decommissioning are systematically addressed. A UK export strategy for nuclear power components and skills that was always part of this framework does not look unreasonable. In addition, the United Kingdom is one of European countries in which the first concrete has been poured as part of the construction of a new NPP.

However, there is no longer a momentum in the United Kingdom today to fill a potential supply gap with a fleet of new Generation 3 PWR and ABWR reactors (following the phase-out and retirement of coal plants, closed Magnox reactors, and ageing AGRs). One of the reasons is the Brexit process that drains policy-making resources from other sectors. Nuclear energy, with the large size of its installations, the need for special safeguards, and the difficult-to-quantify benefits, is likely to be more affected by this Brexit process than other energy carriers. At the same time, the government is aware of this and has launched a number of initiatives in the nuclear field, most importantly with the publication of its Nuclear Sector Strategy of June 2018 that set out a coherent case for new nuclear development.

Ultimately, however, the overall dynamics of the UK nuclear sector will depend on continuing and expanding nuclear new build. Inevitably, the ambitious target of the UK industry of 16 GW of new nuclear capacity by 2030 that was initially announced, establishes the backdrop against which success or failure will be assessed. The new build project at HPC by a French-Chinese consortium with 3.2 GW is a sizeable step, but will not be sufficient on its own to carry the momentum of UK nuclear development forward. At least one additional project needs to be agreed in the coming two years to maintain momentum. Otherwise, the creation of an internationally competitive UK supply chain for nuclear new build will be difficult to sustain in an industry that is subject to very strong increasing returns to scale at all levels.

A decisive element in this context is the need to articulate better the contribution that is expected of nuclear energy to the UK low-carbon electricity supply. Do current projections of the evolution of the UK electricity market suggest that nuclear energy will be able to run in an economically efficient baseload mode or will it be primarily used as a low-carbon backup for the generation from variable or intermittent renewable resources? The answer will have a bearing on the cost and financing of nuclear electricity, on its optimal share, as well as, to some extent, on the appropriate technology to be chosen.

Overall, nuclear energy in the United Kingdom benefits from a strong policy framework and good public support. However, current arrangements do not yet ensure the economic viability of the projects for new NPPs beyond HPC. This means that UK nuclear power is approaching, rather quickly, a bifurcation that will decide whether the

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original ambitions for its development can, by and large, be maintained or whether the share of nuclear power in UK electricity supply will decrease dramatically after 2025. If UK policy makers are convinced that nuclear energy should remain an important part of the electricity mix, they will need to set out the overall system’s contribution of nuclear power in terms of carbon emissions, reliability, flexibility, grid services, and diversification, to create a broad consensus that the economic incentives required do, indeed, constitute good value for money.

Recommendations

The UK government should:

 Ensure that the role of nuclear power is well understood for delivering the United Kingdom’s decarbonisation requirements under the carbon budgets over the period 2028-32, in line with the Nuclear Sector Deal.

Continue to articulate the broader contribution of nuclear power to fuel diversification and the security of electricity supply, drawing on a transparent evidence base that demonstrates the costs and benefits, with a view to designing appropriate financing mechanisms for economically viable new NPPs.

Continue its efforts to ensure that exiting the European Union and the Euratom treaty will not impact nuclear trade or the supply chain of the UK nuclear sector.

Concentrate its nuclear research efforts on a smaller number of ventures, such as the follow-up to the SMR competition for a maximum return on invested research funds.

References

EC (European Commission) (2018), Notice to Stakeholders WITHDRAWAL OF THE UNITED KINGDOM AND THE EURATOM ACQUIS, Brussels,

https://ec.europa.eu/info/sites/info/files/notice_to_stakeholders_brexit_euratom_final.pdf.

IEA (International Energy Agency) (2012), Energy Policies of IEA Countries: The United Kingdom 2012 Review, Paris.

IEA (2019), World Energy Balances 2019 First edition (database), Paris, www.iea.org/statistics/.

Helm D. (2017), Cost of Energy Review, London, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_d ata/file/654902/Cost_of_Energy_Review.pdf

UK Government (2017a), Clean Growth Strategy: Leading the Way to a Low Carbon Future, BEIS, London https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_d ata/file/700496/clean-growth-strategy-correction-april-2018.pdf.

UK Government (2017b), Industrial Strategy: building a Britain fit for the future, HM Government, London, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_d ata/file/664563/industrial-strategy-white-paper-web-ready-version.pdf

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UK Government (2018a), Nuclear Sector Deal, Department for Business, Energy & Industrial Strategy (BEIS), London, https://www.gov.uk/government/publications/nuclear- sector-deal/nuclear-sector-deal

UK Government (2018b), The Future Relationship between the United Kingdom and the European Union, White Paper, London, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_d ata/file/725288/The_future_relationship_between_the_United_Kingdom_and_the_Europea n_Union.pdf

UK Government (2018c), Political Declaration Setting out the Framework for the Future Relationship between the European Union and the United Kingdom, Department for Exiting the European Union, London, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_d ata/file/759021/25_November_Political_Declaration_setting_out_the_framework_for_the_fu ture_relationship_between_the_European_Union_and_the_United_Kingdom__.pdf.

UK Government (2018d), Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, as endorsed by leaders at a special meeting of the European Council on 25 November 2018, Department for Exiting the European Union, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_d ata/file/759019/25_November_Agreement_on_the_withdrawal_of_the_United_Kingdom_of _Great_Britain_and_Northern_Ireland_from_the_European_Union_and_the_European_Ato mic_Energy_Community.pdf

UK Government (2018e), Implementing geological disposal – working with communities: long term management of higher activity radioactive waste, BEIS, London, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_d ata/file/766643/Implementing_Geological_Disposal_-_Working_with_Communities.pdf

UK Government (2018f), Draft National Policy Statement for Geological Disposal Infrastructure - Implementing Geological Disposal, BEIS, London, Consultation,

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_d ata/file/676402/Final_NPS_Consultation_Document.pdf

UK Government (2018g), Independent Report, Market Framework for Financing Small Nuclear, Expert Financing Working Group for BEIS, London,

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_d ata/file/732220/DBEIS_11__Market_Framework_for_Financing_Small_Nuclear_EFWG_Final_Report_.pdf

UK Government (2019a), Guidance: Civil nuclear regulation if there’s no Brexit deal, BIES, London, https://www.gov.uk/government/publications/civil-nuclear-regulation-if-theres-no- brexit-deal/civil-nuclear-regulation-if-theres-no-brexit-deal

UK Government (2019b), Guidance: Nuclear Research if there’s no Brexit Deal, BEIS, London, https://www.gov.uk/government/publications/nuclear-research-if-theres-no-brexit- deal/nuclear-research-if-theres-no-brexit-deal

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