Keir Starmer has vowed to “rip up the rules” of the nuclear industry by allowing a new breed of mini reactors to be built for the first time in the UK.
The prime minister’s move to encourage fresh investment in small modular reactors (SMRs) could allow new nuclear projects to spring up across England and Wales – not just on the country’s eight designated nuclear sites. However, it may put the government on a collision course with local communities.
The government is prepared to “push past nimbyism”, according to Starmer, but what will it mean for the communities forced to host a nuclear power plant?
Why does the UK want to build them?
The promise of a quick, affordable source of reliable low-carbon electricity has proved compelling for ministers in the previous government and the Labour government to help increase the UK economy while meeting the country’s climate goals.
UK electricity consumption is expected to double by 2040 and while renewable projects are expected to provide the backbone of Britain’s clean energy system, nuclear is considered a valuable addition of steady, on-demand electricity generation. Meanwhile, Britain’s existing nuclear reactors are nearing the end of their life.
The benefit of their size means SMRs can be built on smaller sites across the country, closer to where the electricity is needed.
Ministers and the industry also claim SMRs offer wider multibillion pound economic benefits by promising to kickstart a new manufacturing industry, which could create tens of thousands of regional jobs by 2050. Starmer has also issued an open invitation to tech companies such as Google, Meta and Amazon to invest in artificial intelligence datacentres in Britain, which could be powered by SMRs.
Could SMRs lower home energy bills?
Starmer hinted that the government was keen to offer households lower energy bills if they lived close to new obtrusive nuclear construction.
This could fall under the government’s comprehensive community benefits plan for communities who live near to new pylons, windfarms, solar power or nuclear plants. Ministers are also consulting on plans that would divide the UK into different wholesale electricity markets . This could mean lower market costs in areas where power generation is higher than demand – and higher costs in areas of high demand where power generation is low.
Overall, an electricity system that relies less on gas power should also be better protected from surging fossil fuel prices in the global markets.
Which companies hope to build them?
Rolls-Royce believes it could be a global leader in building SMRs if it wins support from the government to launch its programme in the UK. However, the Derby-based company faces competition from three North American firms for SMR orders from the UK government.
The Treasury is expected to announce two winners from a shortlist including Rolls, the US-owned Holtec and GE Hitachi, and the Canadian-owned Westinghouse alongside the government’s spring spending review in March.
What are the risks?
Although SMRs are based on existing technology they are still unproven. This means the promises of quick, cheap nuclear construction could prove to be unfounded. The only nuclear plant under construction in the UK, Hinkley Point C, has been beset by repeated delays and cost increases. The plant, which had been due to produce electricity in 2017, is now expected to be complete in 2031 and cost £35bn.
There are also questions about how SMRs could be financed. Globally SMR projects need financial support from governments to move ahead. In the UK, ministers are expected to use a funding framework, known as a regulated asset base (RAB) model, which piles part of the upfront cost on to household energy bills before the plants start generating electricity. This is attractive to investors because it reduces the risk of running out of funds during construction, but it effectively puts the bill and taxpayers on the hook for construction delays.
In addition, under the government’s new planning rules some communities are likely to be concerned about the risk of nuclear accidents near areas of dense populations. The risk is very low, but the impact would be catastrophic.
Dr Doug Parr, the chief scientist and a director at Greenpeace UK, said the Labour government had “swallowed nuclear industry spin whole, which is courageous – or stupid – given that not a single one has been built, and with the nuclear industry’s record of being overtime and over budget unmatched by any other sector.”
He added: “As for the unsolved problem of nuclear waste management, government don’t see the need to mention it at all.”
The UK’s nuclear safety rules, which are overseen by the Office for Nuclear Regulation, are some of the most stringent in the world. The last serious nuclear accident in the UK was the Windscale fire in Cumbria in 1957.
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