Why is UK expanding nuclear as US tries to get out?

July 1, 2015 | By Jaclyn Brandt

The United Kingdom is working to expand their energy footprint, and is looking to nuclear. Minister of State Andrea Leadsom's spoke to the Nuclear Industry Association conference about how nuclear can help increase the clean energy in the country. Leadsom explained that the country is working to not only maintain reliable energy, but also to keep costs low.

The Kewaunee Nuclear Generating Station, which was closed in 2014. Credit: Royalbroil/Wikimedia Commons

"These cannot be treated as separate issues," she explained in her speech. "That is why this government's priority is to set out a single, coherent energy policy that gets us to where we need to be -- keeping the lights on, powering the economy with cleaner energy, and making sure people pay less for their bills."

Leadsom believes nuclear will be important in the next few years "in order to avoid the narrowing of margins that we have seen in recent winters," and new nuclear power stations will be a vital part of the country's infrastructure investment.

Currently, the UK has nine existing nuclear power plants, which generate around 20 percent of their total electricity demand. However, eight of those plants are expected to be closed by 2030.

"Nuclear power is also one the cheaper forms of low carbon electricity, reducing pressures on consumer electricity bills, relative to a low carbon energy mix without new nuclear, while emitting similar levels of CO2 to renewables over the life of the plant," Leadsom said, adding that the country is working to create new nuclear.

They have prepared for the new stations through regulations, which will in turn remove any obstacles to investment -- while also making sure operators of any new nuclear have proper planning and financing to properly manage their plants.

Government support is an important factor in the development of nuclear. However, there are many factors that can also have a negative effect on nuclear -- as utilities in the United States have seen.

"Some plants have closed due to the inequities in market conditions in deregulated markets that aren't valuing nuclear plants' attributes," Nuclear Energy Institute (NEI) spokesperson Mitchell Singer told FierceEnergy. "The bottom line on plant closings for the wrong reasons is that some existing reactors are economically challenged in competitive markets due to pressure from low-price natural gas, renewable portfolio standards and other market factors. The situation is particularly challenging for nuclear plants in merchant markets that are experiencing price suppression."

Exelon is one utility dealing with potential closures of their nuclear plants, especially in Illinois. The state General Assembly was looking at enacting a Low Carbon Portfolio Standard (LCPS), which Exelon said would keep their nuclear units open. Without it, they said, they would be forced to close their three nuclear plants -- which would in turn cost the state $1.8 billion each year in economic activity, $500 million in higher energy costs each year, and as much as $1.1 billion each year due to increases in carbon and other pollutants. And Exelon is not alone in their fight.

"Last year, the U.S. nuclear fleet lost its Kewaunee plant in Wisconsin in such a market. At the end 2014, Vermont Yankee closed under similar circumstances. Other single-unit sites are at risk," Singer added. "We are talking about top-performing plants, boasting 90-plus percent capacity factors and operating at exceptional levels of safety. Unless and until we evaluate each source of electricity and systematically inventory the attributes that have value and recognize that value in our market designs and policies and operating practices, we run the risk of losing valuable assets to our electricity grid, and in the process draw down on a central attribute of the American power delivery system: its diversity."

As of January 2015, there are more than a dozen new nuclear power plants planned across the United States, but even more are being retired. The difference between the new nuclear in the United Kingdom and the new nuclear in the United States is the government's plans to further the generation source.

In October 2014, the European Commission (EC) approved the first new nuclear power station in decades -- known as the Hinkley Point C project -- expected to come online 2023. On top of this, the industry is currently planning five new projects in the UK, totaling around 15 gigawatts (GW) of nuclear capacity, or 35 percent of the country's electricity generation. Leadsom explained that by 2030, that level could bring private investments of nearly £90 billion, as well as nearly 35,000 jobs.

"The Government is clear that the UK remains open for business. We welcome high quality investment from overseas," Leadsom said. "The nuclear programme represents a tremendous opportunity to establish the UK as a key nuclear country, with -- importantly -- the potential to export our capabilities to other countries: including in decommissioning, an area in which we are already a world leader. These international opportunities offer prospects of developing our domestic supply chain and realizing economies of scale."

Leadsom is confident nuclear is the future of energy in the UK, and with her speech, was hoping to convince others of the same.

"As the new Minister of State for Energy, I want to assure you that I aim to see the UK nuclear industry flourish as a global leader," she said, "so that together we can achieve secure, low carbon and affordable energy that will underpin the future success of the UK economy."

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http://www.fierceenergy.com/story/why-uk-expanding-nuclear-us-tries-get-out/2015-07-01