Market reform?.......or abuse of a controlled trading environment?

UK nuclear waits for market reform

02 December 2010

The three firms wanting to build nuclear power plants in the UK said today with one voice that energy market reform is "absolutely key" to their plans. 

The words were used in turn by Olivier Carret of newly named NuGeneration, Alan Raymant of Horizon Nuclear Power and Chris Bakken of EdF Energy. All three spoke at the Nuclear Industry Association's annual Energy Choices conference today in London.

Clearest on the need for a new framework to promote low-carbon energy was Bakken. He said that EdF Energy wants to see a floor price for carbon dioxide emissions, "so fossil fuel generators pay a price for their pollution just as nuclear power pays for its waste." This is a stated aim of the UK government, but its proposals on this have not yet been published for consultation.

EdF Energy would also like to see the introduction of low-carbon capacity payments among the government's new measures, which Bakken said would ensure enough capacity is built. He also called for "clear limits to the level and duration of subsidies for other energy sources to avoid distorting the market in the long term."

Nobody can predict the market conditions up to 60 years ahead, said Bakken, "but we need a reasonable period of certainty" to reduce investment risk. On the same note, Raymant said that electricity market reform was "absolutely critical to underpinning the investment case for any nuclear project, not just our own."

At the heart of the nuclear policy of the current and previous UK governments are the principles that nuclear is a viable option for energy supply, especially in the context of climate change, but the full cost of all construction and waste management must be met by private industry. The use of public funds to support nuclear has been explicitly ruled out many times, but there is strong consensus for wholesale revision of power market incentives. The government is soon to put proposals to public consultation.

Planning plans 

While EdF Energy is the most advanced in its new build plans and expects to apply for Hinkley Point's construction consent next year, plans are firming up at the other two would-be builders.

Raymant explained the site characterisation work taking place at its first site, Wylfa. Next year this will see a "substantial ramp-up" regarding ground investigations and seismic studies. Early in 2011 Horizon will make a technology decision - either Areva EPR or Westinghouse AP1000 - which Raymant said would put the company "on a much stronger, much clearer pathway."

After that milestone, planning and licensing work for Wylfa B would really begin in 2013 with construction in 2015 and operation by 2020. Horizon's initial plans for Oldbury start two years later, but Raymant's timeline showed construction at Oldbury only near the end of this decade.

The third consortium, NuGeneration, is taking shape. With a timeline much longer than either EdF Energy or Horizon, NuGen is waiting until the end of the Generic Design Assessment (GDA) process before picking a reactor design. It has an option on 200 hectares alongside Sellafield in West Cumbria and will use the best 100 hectares for the reactor type it eventually chooses.

The GDA process continues towards its government-imposed deadline of June 2011, with "no show-stoppers", said Kevin Allars of the Health and Safety Executive (HSE). Potentially problematic design issues with both reactor types, the 'regulatory issues', now look set to be cleared in time but it remains likely that certain items could be outstanding after the end of the main GDA process.

Allars said that suite of reports issued in June 2011 will "start to signal when the end of GDA will actually be", while Energy Choices delegates told World Nuclear News it could take up to a year to resolve outstanding items in full. The HSE has already "met with industry to outline the extent of likely and potential GDA issues and assessment findings."

Allars was clear that a nuclear builder would need a site licence to begin construction, and the vital consent to do this requires the closure of all GDA work. However, an application for a site license can be processed in parallel to the GDA work.
 
By Jeremy Gordon
for World Nuclear News