As a producer of clean, reliable, low carbon energy nuclear power has a key role to play in strengthening the UK’s energy security as well as providing insurance against price volatility. The Government has recently taken a significant step forward towards achieving this with the publication of the Energy Bill.
The Bill sets out various reforms to the electricity market with the aim of ensuring that demands continue to be met over the coming decades. It is paramount that the UK’s energy sector is largely decarbonised if the Government is to meet its legally binding climate change targets whilst still maintaining a secure base load to keep the lights on.
Nuclear is a secure and reliable source of energy which produces just 5g of CO2/KWh, compared to coal, which produces 900g CO2/KWh, or gas which produces 365g CO2/KWh.
EDF Energy has already invested over £1 billion in their Hinkley Point C project and, once the Contracts for Difference (CfD) and transitional arrangements have been delivered, we expect them to move quickly to their Final Investment Decision. This will bring significant investment and employment to the Somerset region.
Hitachi Limited, the purchasers of the Horizon Nuclear Power project have given the industry a further boost with their £696 million investment in the UK – this is a real vote of confidence in the UK energy market and a significant step forward in our ambitions to see a fleet of new nuclear plants built in the UK.
Encouragingly, Hitachi has already shown a tremendous amount of belief in the UK’s engineering and construction capabilities. The company has stated that it intends to procure approximately 60% of the value of the first unit from UK and locally sourced materials, personnel and services.
This represents a tremendous opportunity for local and national supply chains. They have also stated that they aim to move at a significant pace to ensure they are generating energy for the grid by the early 2020’s.
The Generic Design Assessment (GDA) of the ABWR (Advanced Boiling Water Reactor) is estimated to take between 2-4 years and we have seen Hitachi successfully build the same reactor in 39 months on a number of projects in the Far East.
The new nuclear programme of up to 16GW of new power will provide a significant economic boost to the UK. This is estimated to be worth 0.34% of GDP per annum (equivalent to £5.1 billion in 2011). Furthermore, 30,000 new jobs will be created as the construction programme progresses.
The resources required for the new build projects will also be in demand for other major UK engineering and infrastructure programmes. This will create both opportunities and challenges but with the right investment and planning now nuclear new build will be a major engine for growth for the UK economy.
Keith Parker is Chief Executive of the Nuclear Industry Association