Hinkley gets the Go Ahead……

Finally some good news on the horizon for the UK’s civil nuclear power generation programme.  Following the disappointments after the withdrawal of German interest in the new build agenda, step forward the rural county of Somerset to put things right.

After more than three years of negotiation, a major obstacle to the construction of a new nuclear reactor on the site at Hinkley Point in Somerset was overcome after the local authorities involved dropped their opposition to the scheme.  French utility company EDF Energy has promised to contribute over £64 million to the local economy, to improve educational facilities in Somerset, community centres as well as allowing the construction of housing.  Spending plans will be presented by the company before the end of the year.

The real estate and commercial property implications are significant, with construction costs on the reactor facility alone expected to be in the region of £7 billion.  Additionally, there will be significant knock on effects in the locality, with related and other support services.

This is not, however, the signal for the first spade to be put in the ground.  Despite the fact that the generating capacity of the UK remains in perilous state, with the much discussed date of December 2017 looming there are plenty of considerations yet to be defined.

As well as convincing the nuclear regulator to grant a nuclear site license, EDF will require to obtain the necessary environmental permit together with approval for the design of the intended reactor, and there’s the small matter of the planning inspectorate.  The Energy Secretary will have to approve their overall finance plan and, to cap it all there will have to be approval of the intended charging structure for the energy produced.

There are a profusion of alternate, energy producing schemes in process in the UK, all of which have a place in the energy generating mix.  This important step in the development of the power generating agenda moves the UK a step closer to keeping the lights on.

China’s UK nuclear energy ambitions

It is reported that the Department of Energy and Climate Change (DECC) has held high level talks with representatives from China.  A team of nuclear engineers and other representatives from the Shanghai Nuclear Engineering Research and Design Institute (SNERDI), an arm of the huge China National Nuclear Corporation (CNNC), met senior DECC officials in recent days.

Reports suggest that there is keen interest from China to enter the UK’s nuclear power generating market place by developing a plan with DECC to build up to 5 reactors at a cost of over £35 billion.  The initial premise is for CNNC and another state owned organisation, China Guangdong Nuclear Power Corporation, to bid against each other for a stake in the Horizon consortium to construct new atomic plants at Wylfa in Wales and Oldbury in Gloucestershire.  It is also understood that the sites at Bradwell in Essex, Heysham in Lancashire and Hartlepool in County Durham are also of interest to the Chinese state.  The French giant EDF currently has the developmental interest in these sites.

China has operated its own atomic plants since 1994 and Keith Parker, chairman of the Nuclear Industry Association in London, said it was "highly encouraging" that China wanted to invest in the UK. "They have 14 of their own reactors in operation and 25 under construction and they use both Areva and Westinghouse designs that could be used here. It was clear from my discussions with them that they have international ambitions."

It is believed the Chinese see setting up in the UK as an opportunity to show they can operate in one of the world's toughest regulatory environments so they can then move into other markets in Africa and the Middle East.

Whether the Chinese enter the UK market is yet to be seen, however their state backed industry would appear to be aggressively chasing opportunities that the UK market offers and, whether the UK taxpayers’ money goes to France or China, it is certain that this represents an important development in the battle to keep the lights on in the UK.

USA continues with nuclear power generation

Countries across the world are reflecting upon their civil nuclear power aspirations following in the wake of the Fukushima incident.  Strategic reviewing of the safety case for the generation of electricity by nuclear reactor is being undertaken, with a small number of Governments already deciding that the perceived risk attached to nuclear generated power being too great to continue to support.  Switzerland has determined to phase out nuclear power generation by 2034, in 2011 Germany shut down 8 nuclear reactors and recent actions by overseas companies have seriously dented the UK’s plans for new build power generation.

However the USA is continuing with its plans to expand the output capacity of its plants.  The Real Deal, South Florida Real Estate News, reports discussions there revolve around the costs of upgrading existing facilities and who will pay for it.  In Florida, Florida Power & Light’s plans to expand four of its nuclear reactors at its plants in St. Lucie, on Hutchinson Island north of Palm Beach and its Turkey Point plant in Miami-Dade County, south of Miami have seen the projected costs rise to $3 billion.  This reflects a significant rise in the original cost plan, roughly double the original estimated rise.  To help pay for this FPL is seeking $151 million in advance nuclear from customers in 2013, equating to a contribution of between $1.50 & $2.50 a month, a strategy yet to be ratified by the Florida Public Service Commission.

Interestingly, an FPL spokesman attributes some of the uplift in cost to increased requirements from the USA’s nuclear governance organisation, the US Nuclear Regulatory Commission. This potentially reflect an even greater awareness of the worldwide focus on nuclear power generation and perhaps recognising the proximity of Turkey Point to Homestead, the town decimated by Hurricane Andrew in 1992.  FPL is also promoting the other beneficial effects of the upgrades, stating that it is estimated the upgrades will save customers a total of $3.8 billion in fossil fuel costs over the units' lifetimes, with $114 million in savings in the first full year of operation. Carbon dioxide emissions will be reduced by an estimated 32 million tons.

As reported in the Palm Beach Post, Jerry Paul, a former reactor engineer and the former deputy administrator of the U.S. National Nuclear Security Administration, "The low operating costs make nuclear the cheapest base load form of energy even though construction costs are higher. If you want cleaner air and you want cost effective electricity, nuclear power has to be part of the mix."

How big a part is clearly the question?

Nuclear new build melt down

It has been announced today that RWE Npower and E-On have pulled out of their project to build new nuclear powered generating rectors at the sites in Anglesey and Oldbury, Gloucs.  There is little information at present but this news from the Horizon consortium represents a set back to the UK’s plans for future power generation.

The cancelling of the £15 billion scheme is a significant blow to both local economies but there are hopes that the Government will be able to attract alternate providers.  The UK’s nucear power generating plans are still on course with EDF Energy, who are progressing plans to build in Hinckley in Somerset and Sizewell in Suffolk and the NuGen consortia made up of GDF Suez and Iberdrola who are working in West Cumbria.

Following the Fukushima nuclear accident the German Government announced its decision to phase out nuclear power generation and this is thought to have played a part in the decision by Horizon.

Nuclear New Build UK Sites Announced

The Government has released details of the locations for the sites of the next generation of new build nuclear power generating stations.

The locations are at Bradwell in Essex, Hinkley Point, Somerset, Oldbury in Gloucestershire, Sellafield in West Cumbria, Sizewell in Suffolk and Wylfa on Anglesey, Hartlepool, Teeside & Heysham in Lancashire.  Each if the proposed sites is adjacent to an existing licensed nuclear site owned by either the Nuclear Decommissioning Authority (NDA) or British Energy (BE).  During 2009/2010 the Government instructed that surplus land adjacent to licensed sited that were in public ownership be disposed of, netting a very tidy sum for the public coffers and it is anticipated that this land will form part of the new build programme.

The development of new power generating capacity for the UK is essential as by the end of the decade a significant proportion of the existing capacity will close, indeed by December 2017 there will a significant downturn in output as the generating capacity of some of the older generating stations is scheduled to come to an end.

Time passes slowly in the nuclear industry and the announcement of the sites is but the first step in the construction and commissioning of a nuclear power station.  There is the not insignificant challenge of tackling that other leviathan that is the planning process.  It is assumed that applications will come under the auspices of the Major Infrastructure Planning Unit, although how long this process will take is debatable.  With the huge numbers of interested parties involved the hoped for swift and efficient planning system may be stretched to the limit.

Lights out in Italy?

The Italians have voted by a 94% majority against the introduction of nuclear power generation to the country.
A pretty resounding rejection of this proposal bucks the trend in Europe and leaves the question as to how their future requirements will be met.