Reviving nuclear energy in the UK | V&E Energy Update

Volatility in energy prices resulting from recent geopolitical challenges has resulted in a renewed focus on national energy security. Due to the risks associated with weather-dependent energy solutions, a nuclear energy resurgence appears to be on the way. Indeed, at COP28 at least 22 countries committed to tripling global nuclear power generation capacity by 2050, and the UK government announced plans to increase the share of nuclear power to 25% of the UK’s electricity supply by 2025.¹

In 2022, 13 countries have already produced at least a quarter of their electricity from nuclear energy. Of these, France generated up to 70% of its electricity from nuclear power, while Ukraine, Slovakia, Belgium and Hungary generated approximately 50% from nuclear power.² Meanwhile, the UK generated around 15% of its electricity from nuclear power, and almost all of the UK’s existing nuclear reactors are operational and will reach the end of their life within the next decade. It is therefore unclear how the UK government plans to achieve its goal.

One avenue that the UK government appears to be exploring is small modular reactors (“SMRs”). In the 2024 Spring Budget, the UK Government announced that it would purchase two sites (Wylfa in Ynys Môn and Oldbury-on-Severn in South Gloucestershire) for two new nuclear power stations. At the end of 2023, it also announced that it would move to the next stage of its search for SMRs that could be used at UK nuclear facilities. Currently, six companies have been invited to submit initial bids by June 2024, with UK Energy Secretary Claire Coutinho recently announcing SMR as “the future of nuclear technology and the key to quadrupling the UK’s nuclear capability by 2050 in the biggest expansion in 70 years“.³

Traditional nuclear power plants (“NPPs”) are often very powerful and are designed to power large cities. They are also traditionally very complex in design. SMR reactors, on the other hand, are much smaller and have a (relatively) more simplified reactor design, which means they can be deployed more flexibly in response to demand. For example, SMR plants are typically <300 MW(e) per unit, which is approximately one-third the capacity of a nuclear power plant, making them better equipped to meet local energy demands in remote areas with more modest power requirements. In fact, SMR reactors can be designed to have a power of as little as 10 MW(e) ("microreactors"), which means a (relatively) small footprint. Alternatively, they can be deployed in clusters to power larger communities that may not have available land to build a large nuclear power plant. The size of SMRs also means they are well suited to being connected to a larger installation and can take the output and convert it into further useful energy, such as heating for various industrial processes, district heating systems or desalination plants.

Nuclear power plants also require significant initial capital investments, which often result in long payback periods. On the other hand, SMRs, due to their modular nature as well as a more simplified design, are easier to build in factories, which in turn can achieve economies of scale and standardization, lowering overall costs. This means that SMRs typically require lower initial investment and also means that SMRs can be manufactured off-site in a much shorter construction time, again saving costs.

However, one of the main advantages of SMRs is their reliability. Renewable energy sources such as wind and solar are highly weather dependent and can therefore produce energy intermittently. SMRs are not as dependent, making them more consistent, and are also a good option for integration into existing grid networks to supplement or enhance existing intermittent energy sources and compensate for any range drops, operating at night, on cloudy days or on windless days for example .

However, the existing nuclear regulatory framework in the UK was designed with large conventionally built nuclear power stations in mind. As a result, existing frameworks will likely need to evolve as we move towards SMR. Some steps have already been taken. For example, in the UK there are currently six National Policy Statements (“NPS”) that provide a framework for energy projects; one general, overarching energy NPS (EN-1) and five technology-specific NPS (EN-2 to EN-6). These statements set out the Government’s policy on the provision of energy infrastructure and provide the legal framework for planning decisions on ‘infrastructure of national importance’ such as power generation projects under the Planning Act 2008. The Government has recently concluded a consultation on the construction of a new NPS nuclear power station ,⁴ which requested its opinion on proposed significant updates to the existing nuclear siting policy. The results of these consultations are expected to be recorded in the new EN-7, which is intended to provide a more appropriate planning framework for future nuclear energy projects, and the draft EN-7 is expected to be submitted for further consultation later in 2024.

These are very exciting developments for the UK and no doubt other countries will also want to take advantage of the benefits that SMR offers. In this series, we will explore how the adoption of SMRs may impact existing energy sources and the future development of traditional and renewable energy sources, how existing regulatory and planning structures interact with an energy matrix that includes SMRs, and explore the potential design and feasibility of the case.

¹ https://world-nuklear.org/information-library/country-profiles/countries-tz/united-kingdom.aspx

² https://world-nuklear.org/information-library/current-and-future-generation/nuklear-power-in-the-world-today.aspx

³ https://www.telegraph.co.uk/business/2024/05/20/rolls-royce-15m-mini-nuklear-reactor-trial-sheffield-uni/

⁴ The consultations were led by the Department of Energy Security and Net Zero, called “Approach to locating new nuclear power plants after 2050“. It can be accessed at the following link: https://www.gov.uk/government/consultations/approach-to-siting-new-nuklear-power-stations-beyond-2025