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'Building New Nuclear: the challenges ahead' report published

4 March 2013

The Energy and Climate Change Committee has published its report into Building New Nuclear: the challenges ahead at 00.01am, Monday 4 March 2013 (HC 117).

Failure to build a new fleet of nuclear power stations in the UK could make it much more expensive to meet our climate change targets and Ministers must stop ‘crossing their fingers’ and urgently develop a back-up energy strategy, a report by the Energy and Climate Change Committee argues. 

The Chair of the Energy and Climate Change Committee, Tim Yeo MP, said: 

"If new nuclear power stations are not built on time, our legally-binding climate change targets will be extremely challenging and much more expensive to meet.

"The Government seems to be crossing its fingers that private companies will deliver a fleet of new nuclear power stations on time and on budget.

"Ministers need to urgently come up with a contingency plan in case the nuclear  industry does not deliver the new power stations we need."

Industry has outlined plans that would deliver 16GW new nuclear power stations by 2025, but new build projects in France and Finland have experienced serious delays and cost overruns. Although the Government and industry have learnt some important lessons from this process, there are still a number of obstacles which could delay new build projects in the UK.

The MPs support the Government’s use of “Contracts for Difference” (CfDs) to help make new nuclear power stations easier to finance, but are concerned at the lack of transparency around the price negotiations between the Government and industry. The new contracts must provide value for money for consumers and should not be offered at a price that is higher than other low-carbon sources of energy, such as offshore wind, which is hoped to be around £100/MWh by 2020.

Tim Yeo MP added: 

"Unlike gas-fired power stations, nuclear power stations are expensive to build but cheap to operate.  It is right that investors should be given confidence that they will recoup their money by providing them with long-term contracts.

"But at the same time Long-term price guarantees for new nuclear power stations need to deliver value for money to consumers.  Locking consumers into paying prices for nuclear power that are unacceptably higher than prices paid to renewables or carbon capture and storage projects would be wrong .

"It is disappointing  that there is still so little transparency about the on-going negotiations between the Government and developers of new nuclear power stations. 

"Government needs to provide more clarity about exactly what forms of support new nuclear projects will receive and whether consumers, taxpayers  or project developers will have to cough up if construction costs end up being higher than anticipated."

Public attitudes have an important role to play in projects to build new nuclear power stations. The MPs are concerned that local communities might not be able to take part in planning consultations on an equal footing with the project developers. The report recommends that the Government should consider providing more support to local community groups so that they can engage better with the planning process.

The MPs argue that there should be benefits for communities that host new nuclear power stations. The Government has plans to allow local authorities hosting renewable energy projects to retain business rates. The report argues that this scheme should be extended to new nuclear projects too. 

Tim Yeo MP concluded:

“Communities hosting nuclear power stations are contributing towards a national need for secure, clean energy and should be able to benefit from hosting these projects.

 “Communities hosting renewable energy projects have been promised benefits.  Those hosting new nuclear should also be entitled to benefits.”

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