Spending £4bn on a new nuclear station at Sizewell will not solve the UK's energy problems

Instead of sensible short-term measures to help those facing energy poverty, the government is focusing on a technology with a track record of failure

March 30, 2022
Sizewell B Nuclear Power Station. Photo: Skyscan Photolibrary / Alamy Stock Photo
Sizewell B Nuclear Power Station. Photo: Skyscan Photolibrary / Alamy Stock Photo

In the face of surging energy prices and the prospect of more problems as Europe turns off Russian gas supplies, the UK government is struggling to find a coherent energy policy. The latest move, a £4bn investment in the proposed new nuclear station at Sizewell, is both a mistake and an irrelevance. Private investors who are being asked to stump up the majority of the £20bn total cost should politely decline the offer.

The current energy challenge—driven first by the surging post-Covid economy around the world, and now by fears of a fight for supplies as Europe reduces its use of Russian gas by two-thirds by 2023—is not the fault of the British government. The UK is not dependent on Russian supplies, which account for less than 5 per cent of British consumption. We do, however, import half our gas, and are therefore vulnerable to whatever happens on the world market.  

The government is responsible for the response to a crisis which will raise retail bills in April, and again in the autumn. The burden of these sudden increases will hit the poorest hardest, adding to cost of living pressures already evident. The Bank of England talks of inflation of 8 per cent by the end of the year. Many commentators think 10 per cent is more likely.  

The answer to the challenge has to begin with welfare support for those who cannot cope. A temporary removal of some of the taxes on energy supply, including VAT, would also offer some relief. The £2bn being given to the developers of Sizewell would have made a material difference to those facing energy poverty.   

In terms of energy policy, the best answer would be to secure supplies on the global market. There is a limited amount of readily available gas—not least from the US—but the EU has been quicker to sign up supplies than the UK.  New long-term import deals would at least provide protection from the risk of a physical shortage.

The next step should be to find ways of substituting for gas. There are no instant solutions but on and offshore wind and solar power could be increased relatively quickly at a reasonable cost. The government could also accelerate its investment in developing the crucial technology for energy storage. This would capture more of the power produced by every wind turbine and limit the need for back-up plants (usually requiring more gas) to deal with the times when the wind is not blowing. On top of this, direct support for simple measures to enable people to use energy more efficiently would limit demand and cut bills.

Instead of such sensible short-term measures, ministers have chosen to focus on a technology which has a track record of failure and which, even if it could be made to work, will take at least a decade to provide any new electricity supplies.  

There is a reasonable case for new nuclear as part of a balanced long-term energy policy. Of all the available options, however, the choice of EDF’s European Pressurised Reactor (EPR) technology is the worst from any perspective.

In 2009, EDF promised investors and the government at the time that the EPR to be built at Hinkley would produce power at a cost of less than £50 per MWhr. By Christmas 2017, we were told Hinkley would be onstream and providing the power to cook our Christmas turkeys. We were the turkeys for believing such claims.

Hinkley is still being built and 2027 now looks like the earliest date for production to begin. In France, the comparable EPR development at Flamanville—which was due onstream in 2013—is still unfinished, having experienced a series of crucial technical problems. In both cases the costs have overrun the original budgets by many billions. Hinkley, if it ever comes onstream, will charge consumers £92.50 per MWhr index linked from 2013 when the deal was agreed. While the costs of renewables such as offshore wind have fallen dramatically over the last decade, the costs of nuclear power from Hinkley have continued to rise. After almost a decade of inflation, that price has already risen to around £110. Who knows what it will be in 2027?

Investors now being asked to put up the money for Sizewell should examine the track record of a reactor design which many in the industry feel is blighted by construction risk. There are better alternatives, such as Rolls Royce’s small modular reactors (SMRs), which are smaller and much simpler to build. A set of such SMRs could provide the power promised from Sizewell as well as providing more jobs in the UK.    

In the face of an energy crisis and soaring bills, the government needs solutions which are practical and affordable. There is no way of insulating the UK from developments in the world market. The poorest can and should be protected but the rest of us will undoubtedly have to pay more. What matters now is that the short-, medium- and longer-term solutions to limit that exposure are deliverable and affordable. Sizewell is neither.