The Nuclear Industry Association (NIA), the trade group for the United Kingdom’s civil nuclear industry, unveiled a new report yesterday that sets out a framework for cutting the cost of building new nuclear power plants in Britain.
The 27-page report, Nuclear Sector Deal: Nuclear New Build Cost Reduction, is available online.
More specifically: Authored by the New Build Cost Reduction Working Group, a cross-sector team established as part of the U.K. government–backed Nuclear Sector Deal, the report identifies the key factors to reduce risk and lower costs, including rigorously planning preconstruction activities, with simplicity of design and construction methodology; repeating designs across multiple plants; and building up and transferring a skilled and experienced workforce to new projects.
In addition, the report identifies how a new financing model that controls construction risk will bring down consumer costs by mobilizing a wider pool of investors and cutting the cost of capital, the NIA said.
Also described in the report is a comprehensive risk-assessment tool being developed by industry to monitor 14 key factors for project delivery and efficiency. According to the NIA, the tool will enable developers, investors, and the government to develop a clear understanding of project risks to support investment decisions, and then track the ongoing management of those actions and risks throughout the delivery of the project.
What they’re saying: “I am very pleased to say that the nuclear new build cost reduction workstream has made great progress, and our report clearly shows it’s possible to deliver a cost-effective program of new nuclear power stations in the U.K.,” said Humphrey Cadoux-Hudson, managing director of EDF Energy and chair of the Nuclear Sector Deal’s Cost Reduction Working Group. “But promises of cost reduction are not enough—in making this case, the developers of new nuclear plants are showing that we recognize the delivery risks we face and how to manage them.”
Tom Greatrex, chief executive officer of the NIA, commented, “Nuclear power stations are very cost effective to run due to high reliability, low and predictable fuel costs, and very large volumes of power generated whatever the weather. This report demonstrates that the upfront costs can be tackled effectively by bearing down on construction complexity and risks, and by tackling unnecessarily high financing costs.”
What’s the deal? The Nuclear Sector Deal was developed by the Nuclear Industry Council and agreed to by the British government and nuclear industry in June 2018. Among other things, it calls for the British government and nuclear industry to work together to reduce the cost to the consumer of future new nuclear projects by 30 percent by 2030, taking the Hinkley Point C strike price of £92.50 (about $123.50)/ MWh as a starting point.