Centre for Policy Studies: Net Zero target at risk without investment in new nuclear

Thursday, 21 January 2021 00:01

Britain’s electricity demand is estimated to double by 2050 as the economy steadily electrifies. Meanwhile Britain is on track to lose significant quantities of stable zero-carbon power, as seven of its eight ageing nuclear plants are decommissioned. The Government must urgently ensure that Britain has the capacity to meet rising demand, especially on days when wind and solar are less effective....Request free trial

Britain’s electricity demand is estimated to double by 2050 as the economy steadily electrifies.

Meanwhile Britain is on track to lose significant quantities of stable zero-carbon power, as seven of its eight ageing nuclear plants are decommissioned.

The Government must urgently ensure that Britain has the capacity to meet rising demand, especially on days when wind and solar are less effective.

UK emissions have fallen by 43% since 1990, but further decarbonisation must be both economically prudent and practicably feasible.

Any new nuclear investment will need a far better funding model to deliver value for money for taxpayers.

Without investment in new nuclear capacity, Britain’s security of energy supply is at risk, which could mean prolonging its dependency on fossil-fuelled power generation. This could lead to the Government having to choose between meeting Net Zero and keeping the lights on.

A new report by the Centre for Policy Studies being launched today argues that to ensure the country is able to cope with the expected doubling of electricity demand by 2050, in a way which is compatible with Net Zero, the Government must continue to support nuclear power generation in the UK.

As set out in ‘Bridging the Gap’, the construction of at least one additional plant would provide a significant boost to Britain’s energy security while seven of the UK’s eight nuclear power stations are decommissioned by 2030. It would complement Britain’s booming renewables portfolio and help to manage periods of variability where renewables currently cannot meet demand.

Analysis in the report shows how wind and solar provided less than 20% of daily electricity demand on 82 separate occasions in 2020, including a period of over a week in August and a week in November.

To support the development of new nuclear capacity, the think tank recommends exploring innovative financing methods, such as the Regulated Asset Base model, which would allow developers to charge consumers a set amount before electricity generation commences. This could cut borrowing costs and ultimately lead to cheaper energy bills for families and businesses.

Renewed investment in nuclear energy could also maintain a pipeline of skills and knowledge, ensuring Britain is well-placed to spearhead the next generation of nuclear technologies, such as small modular reactors and fusion reactors.

The report also suggests that streamlining current decarbonisation policy and a simplified and standardised price on carbon could level the playing field between generation methods, stimulate the green tech markets, and ensure the country can reach Net Zero in the most efficient and cost-effective way.

Eamonn Ives, report author and CPS Energy and Environment specialist, said:

“It is critical that Britain replaces its fossil-fuelled energy generation with zero-carbon methods, such as new nuclear. To leverage fresh investment into Net Zero energy infrastructure, the Government should explore new financing models, while also remembering to protect taxpayers and consumers.

“Beyond this, Ministers should be thinking boldly about how to deliver an energy system for the 21^st Century. They must ensure that the regulatory and fiscal landscape is fit for purpose, and that it is always working to hasten progress towards Britain’s climate objectives.”

Simone Rossi, EDF’s UK CEO, said:

“Nuclear is the only proven technology we have right now to support the massive development of renewables necessary in our Net Zero.

“Sizewell C will create thousands of jobs across the UK and deliver reliable, low-carbon electricity to millions of homes. Continued good progress on the funding model is key to ensuring value for money from new nuclear.”

ENDS

Notes to Editors

‘Bridging the Gap’ is available in draft here
This report was supported by EDF, although as with all our reports the CPS is wholly responsible for the content and views expressed.
Report author, Eamonn Ives, is available for interview. Eamonn is the CPS’s energy and environment policy specialist. He was previously an advisory expert for Climate Assembly UK.
For media requests, or further information, please contact the Centre for Policy Studies’ Head of Communications on 07540 797875 or email robyn@cps.org.uk
The Centre for Policy Studies is Britain’s leading centre-right think tank, named by Conservative MPs in polling by ComRes as the most influential think tank in Westminster. Its mission is to promote enterprise, ownership and opportunity.