Market News

 February 22, 2012
Hendry: UK's nuclear reactor fleet could be extended beyond 2025

 The UK's ageing nuclear reactors look likely to have their lives extended beyond the mid-2020s as the country looks to tackle a looming energy gap, energy minister Charles Hendry said today.

Nuclear power is a cornerstone of the government's low carbon energy policy, but of the UK's 19 reactors, only Sizewell B in Suffolk is currently scheduled to keep running beyond the middle of the next decade, leading to plans for 16GW of new plants at eight sites across the country.

However, Hendry today told a conference in London that several existing reactors would have to have their lives extended to provide more time for new low carbon energy capacity to be built.

He said the UK's deregulated electricity market had not produced enough capacity to replace the fossil fuel and nuclear plants that are due to be switched off over the next 10 years, while at the same time dealing with a predicted doubling in demand for electricity over the next 30 to 40 years.

Coping with the "capacity challenge" due to bite by the end of the decade, while lowering emissions in line with mandatory targets, would require twice as much investment in the new generation over the coming decade as had been spent over the past 10 years, he added.

A diverse portfolio of renewables, new nuclear, carbon capture and storage (CCS) and energy-efficiency measures would be needed, Hendry said, but even if this programme is delivered, current nuclear plants might also be required for several more years.

"By the early 2020s [almost the] whole nuclear fleet will be closed down," he said. "Some may get a lifetime extension -- that is entirely possible."

A spokeswoman for the Nuclear Industry Association (NIA) told BusinessGreen plants would apply for an extension when they reach the end of their scheduled lifetime. But she added that ideally the government should not rely on extensions and should accelerate the construction of new plants instead.

French company EDF, which runs eight of the 10 UK plants, extended by five years the working life of the Heysham 1 and Hartlepool reactors to 2019 last year. Last month it estimated prolonging the lifespan of France's 58 reactors would cost up to €860m per reactor, compared to €5bn for building new, next-generation reactors.

The Department of Energy and Climate Change (DECC) said it will cost £50bn to build the UK's new nuclear fleet, but insists a policy is in place that prevents it from providing specific subsidies for new nuclear power. Instead, it plans to rely on reforms of the electricity market in favour of low carbon energy and a new capacity mechanism to attract developers into the sector.

"We want to ensure our electricity portfolio is diverse and not rely on a single technology -- we think new nuclear should be part of the mix," Hendry told delegates, adding that a deal signed with France last week demonstrated the UK's role as a "serious nuclear nation".

"We can only deliver what we need to do if we get people to invest [and] we can only do that if people see this is a good market in which to operate," he added. "We've shown investors we are very serious indeed about new nuclear."

Many campaign groups remain fiercely opposed to nuclear, however, arguing that the government does not have adequate plans in place to deal with the resulting radioactive waste and that the technology cannot be deployed without significant subsidies.