03 Sep 2020
The nuclear industry have set out an ambitious framework to cut the cost of constructing new power stations in the UK.
In a new report, a cross-industry team, working as part of the Government-backed Nuclear Sector Deal, set out the key factors to reduce risk and bring down costs by 30% by 2030.
These factors include rigorous pre-construction planning, with simplicity of design and construction methodology, repeating designs across multiple stations, and building up and transferring a skilled and experienced workforce to new projects.
The report further identifies how a new financing model that controls construction risk will also bring down consumer costs by mobilising a wider pool of investors and cutting the cost of capital.
In reaching these conclusions, the report incorporates lessons from projects across the globe and shows that nuclear power is vital to achieving Net Zero by 2050, whilst creating thousands of high quality jobs and economic opportunities across the country.
Humphrey Cadoux-Hudson CBE, Chair of the Cost Reduction Working Group of the Nuclear Sector Deal, said:
“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 programme of new nuclear power stations in the UK. But promises of cost reduction are not enough – in making this case, the developers of new nuclear plants are showing that we recognise the delivery risks we face, and how to manage them.”
Tom Greatrex, Chief Executive Officer of the Nuclear Industry Association, said:
“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.”
Minister for Business and Energy Nadhim Zahawi MP said:
“I am delighted to see the nuclear industry setting out a clear and robust framework to reduce costs, in line with its commitments under the Nuclear Sector Deal. New nuclear will play an important role as we reach our net zero target by providing reliable, low carbon power as part of our future energy mix.”
To embed this framework, the industry is developing a comprehensive Risk Assessment Tool which will monitor 14 key factors for project delivery and efficiency.
The tool will enable developers, investors and Government to develop 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.
The industry has achieved early progress against these initial indicators:
The industry is confident that by taking the steps outlined in the report, and by action from Government to secure a new financing model, costs will fall in accordance with the commitments made under the Nuclear Sector Deal.