By the time any new nuclear plant could be built in the UK (estimated to be 2020 or later), the market for its electricity would be disappearing, according to new research.
While the debate over the role nuclear power should play in energy generation, both here in the UK and elsewhere (most notably Japan in recent months following the Fukushima disaster, see story), a new report from Energy Fair suggests that even accounting for rising energy demand in coming years, the consumer demand for clean renewables will push aside nuclear.
Labelling the nuclear market a ‘high risk gamble, ‘the new report entitled ‘The financial risks of investing in new nuclear power plants’ identifies five main areas of risk for anyone considering investing in nuclear; market risk, cost risk, subsidy risk, political risk and construction risk.
The tumbling cost of photovoltaics (PV) and the falling costs of other renewables, the likely completion of the European internal market for electricity and the strengthening of the European transmission grid all mean that consumers will be empowered to generate much of their own electricity or to buy it from anywhere in Europe, bypassing UK nuclear stations.
Explosive growth of PV is likely to take much of the profitable peak-time market for electricity. And there will be stiff competition to fill in the gaps left by PV, from a range of other sources, many of which are better suited to the gap-filling roll than is nuclear power, the research suggests.
There is good evidence that, contrary to the often-repeated claim that nuclear power is cheap, it is one of the most expensive ways of generating electricity. The inflation-adjusted cost of building new nuclear power stations has been on a rising trend for many years, and will be boosted by the introduction of new safety measures after the Fukushima disaster. Meanwhile, the cost of most renewable sources of power is falling.
Although nuclear power is a long-established industry which should be commercially viable without support, it depends heavily on subsidies. This is a clear breach of the principle of fair competition. At any stage, some or all of the subsidies may be withdrawn, either via complaints to the European Commission, or via the European Court of Justice, or via decisions made by politicians. The group of scientists behind Energy Fair has already submitted a complaint to the Directorate General for Competition of the EC about subsidies for nuclear power.