COV0062

Written evidence submitted by Nuclear Industry Association

  1. The Nuclear Industry Association (NIA) welcomes the chance to respond to the Environmental Audit Committee inquiry on Greening the post-COVID-19 Recovery.

 

  1. The NIA is the trade association and representative body for the civil nuclear industry in the UK. We represent around 250 companies operating across all aspects of the nuclear fuel cycle. This includes the current and prospective operators of nuclear power stations, the international designers and vendors of nuclear power stations, and those engaged in decommissioning, waste management and nuclear liabilities management.
  2. In our recent report, Forty by ‘50: The Nuclear Roadmap, the NIA outlines the potential contributions of the UK nuclear industry to reaching Net Zero and details six short-term recommendations for industry and Government to meet in order to reach these ambitions. The three most relevant recommendations are the following:

 

    1. The Government should articulate a clear, long-term commitment to new nuclear power. There are opportunities to do this in the upcoming Energy White Paper, and in the National Infrastructure Strategy.

 

    1. Progress must also be made on an appropriate funding model for nuclear new build to stimulate investment in new capacity and reduce the cost of capital.

 

    1. Publish a National Policy Statement on small reactors, the development of which could stimulate local economies and bring jobs and investments to areas of the UK disproportionally affected by Covid-19.

 

  1. Large-scale nuclear projects generate 20,000 high-quality construction jobs, and we believe that approving further projects of this scale would stimulate economic growth and drive significant decarbonisation.

 

  1. A number of our members may choose to make their own detailed submissions. The focus of this submission is therefore on high-level, industry-wide matters.

 

How can any fiscal and economic stimulus packages be aligned with the UKs ambitions on net-zero, biodiversity, the circular economy, and Sustainable Development Goals?

In what areas should interventions be targeted to deliver both economic and environmental benefits in the short and long term?

How can the economic recovery stimulus be used to deliver green jobs at a time of potentially high unemployment?

In the run up to Conferences of the Parties to UN conventions on climate change and biodiversity next year, how can the UK use its influence, as both host of COP26 and when holding the Presidency of the G7 in 2021, to influence the nature of economic rescue packages around the world?

  1. In becoming the first major economy in the world to put a target of net zero carbon emissions by 2050 into law, the UK set a precedent for the rest of the developed world to follow. This sent a clear message of the UK’s commitment in tackling climate change.

 

  1. And in order to meet the challenge of climate change, the UK needs bold and urgent action through the deployment of clean energy across the country. Particularly during this difficult period, we must also protect and enhance our quality of life by ensuring there is affordable power for homes, businesses, schools and hospitals, as well as providing jobs and career opportunities in the green economy. The Government has rightfully committed to saying that any recovery plan post-COVID-19 must have a green economy at its centre.

 

  1. The UK has a unique opportunity in 2021, as the host of COP26 and the Presidency of the G7, to set out a “low regrets” pathway to Net Zero, one that invests in proven technologies and front-loads emissions reduction. This pathway would generate jobs in highly-skilled, secure, well-paid sectors and stimulate further innovation. With this policy framework, the UK can demonstrate how swift action against climate change can embed long-term prosperity.

 

  1. The UK cannot decarbonise its electricity grid without nuclear power. Nuclear currently provides almost 20% of electricity demand and nearly a half of our low-carbon electricity. It saves more than 20 million tonnes of carbon dioxide emissions per year, the equivalent of taking one-third of cars off UK roads.

 

  1. During the challenging circumstances caused by the events of the past few months, nuclear has consistently kept the lights on even during adverse events and showcased its ability to be flexible when necessary. For example, Sizewell B, the largest generating unit in the country, has adjusted its output during the crisis to allow stable supply to the grid.

 

  1. The industry currently sustains around 65,000 direct jobs, extending to 160,000 when further job creation in the wider supply chain is included. Annually, the sector contributes £6.2 billion in Gross Value Added (GVA) to the national economy, with £4bn in the Northern Powerhouse area alone.

 

  1. The Committee on Climate Change states that “power sector decarbonisation does not rely on variable renewables alone, but a portfolio of technologies including nuclear power”, and that 38% of our electricity should come from ‘firm’ low carbon sources, such as nuclear power. Nuclear is the only proven source of low carbon generation and its role in the energy mix has been supported by multiple reputable institutions, including the OECD, IEA (2019), EIB (2019), IPCC (2018), MIT (2018) and the Energy Systems Catapult (2020).

 

  1. The Energy Systems Catapult (2020) recommended that the UK commit now to 10 GW of new nuclear power capacity in addition to Hinkley Point C as part of the “low regrets” pathway to Net Zero.

 

 

  1. Large GW scale projects bring major investment, each with over 20,000 roles in construction, including around 700 apprentices per-project and over 800 long-term jobs during operation. New nuclear projects have beneficial supply chain impacts on major strategic industries. An example is UK steel, with 200,000 tonnes of Welsh steel being used on the Hinkley Point C project alone.

 

  1. There are several large-scale nuclear sites in the UK that are under development, some of which are shovel ready. With political and financial support these projects will help bring prosperity to the regions in which they sit. They are:

 

•         Hinkley Point C, Somerset – Hinkley is the only new nuclear plant currently under construction in the UK. To date, £1.67bn has been spent in the South-West, 10,300 jobs have been created including 644 apprentices, and there has been £199m directly invested into the community

•         Sizewell C, Suffolk – The project offers 25,000 employment opportunities and 1,000 apprenticeships during construction. Up to 70% of the construction value will be spent with UK companies, with an estimated total of £1.5bn spent over the construction period in the local supply chain alone

•         Wylfa Newydd, Anglesey – Work on Wylfa was paused in January 2019. Starting construction on the site will trigger £5.3bn in supply chain opportunities; £875m of which will be seen in first two years alone. Work will also create up to 9,000 jobs including over 700 apprentices, and contribute £100m of GVA a year locally for 60+ years

•         Bradwell B, Essex – This station will generate enough electricity to power 4m homes. It offers long-term employment opportunities and 10,000 jobs during construction, 3,000 of which will go to the local population. The local and regional economy will benefit from billions of pounds of investment, including support for schools and colleges in the development of STEM skills.

 

  1. Based on comprehensive modelling commissioned by the NIA, our conservative estimate is that the nuclear power with 33 GW of installed capacity by 2050, would generate:

 

•         Up to 40% of the low carbon power in a net zero economy;

•         In excess of £33bn in GVA to the economy per year;

•         Well over 300,000 job opportunities.

•         186.75 million tonnes in carbon dioxide emissions savings per year

 

 

  1. A programme of nuclear new build, from large to small-scale, would bring major strategic benefits to the UK, including economic levelling up and global industry leadership opportunities.

 

  1. The UK already plays a major role in the international decommissioning market, and this will only increase as other countries’ plants also retire, putting us at an advantage of capitalising on an emerging global market worth hundreds of billions of pounds. Technologies and expertise developed in the UK have been successfully deployed in highly hazardous and complex sites around the world, saving those nations years of R&D, and significantly reducing any further risks.

 

  1. Our growing expertise in the next generation of nuclear technologies includes Small Modular Reactors (SMRs) and Advanced Modular Reactors (AMRs). There are several UK companies and consortia which are well-placed to develop SMRs and AMRs. These include Rolls-Royce, Moltex Energy, U-Battery and Westinghouse.

 

  1. Internationally, the USA, Canada and China are actively pursuing development pipelines, including designs by NuScalePower, GE Hitachi and the China National Nuclear Corporation. There is strong interest from international players in the UK market, including opportunities to localise content.

 

  1. The UK SMR consortium led by Rolls-Royce estimates that exporting SMR technology could be worth £250bn if its programme is successful. The consortium predict construction on the reactors could start as early as next year, with expected deployment by 2025, creating 1,000s of jobs.

 

  1. Nuclear’s history is deep-rooted in local communities, often those far removed the infrastructure benefits of city life, such as Copeland, Hartlepool, Anglesey and Bridgwater. Moreover, the sector has showcased how to successfully engage with and support local economies, through the creation of jobs, supply chains and educational resources.

 

  1. As with any economic recession, these areas will likely be disproportionately affected by COVID-19. There are many of brownfield sites across the UK that could be appropriate for both large and small nuclear reactors to bring prosperity to those areas. This would add not only sources of low carbon electricity, but also clean heat and production of hydrogen in industrial clusters that will help safeguard strategic industries, such as steel production, as they decarbonise.

 

  1. With potentially thousands of highly-skilled jobs – many of which are signposted for the local population – nuclear sites can offer both short and long-term prosperity to these regions as laid out in the examples of above. Jobs at risk in manufacturing could be easily transferrable into the nuclear industry, either in the construction of new sites or in STEM roles. Recruitment remains a key priority for the sector, as detailed in the Nuclear Sector Deal published in 2018.

 

  1. It is a misconception that to get a job in the nuclear industry, you have to have a nuclear physics degree. The nuclear sector offers a range of technical apprenticeships as well as graduate positions which can build the skills base ready for new build projects and ongoing decommissioning work.

 

  1. The nuclear industry has already been focusing on reskilling and transferability as a result of the Net Zero target and as the UK moves away from fossil fuels. It is therefore well prepared to accept skilled workers that may have lost their livelihood as a result of COVID-19. However, a growth in jobs is reliant on political support for nuclear and its significant contributions to Net Zero.

 

  1. The programme of nuclear development and innovation that we have detailed above highlight just a small number of the long-term advantages of supporting nuclear in achieving Net Zero and stimulating the economy in a post-pandemic recovery. But, in order to successfully help the economy, nuclear also needs short-term action and support from the Government.

 

  1. Nuclear is an economic powerhouse. The industry has remained resilient throughout this time of crisis and will play an important role in the UK’s economic recovery. However, to unlock the opportunities and access the benefits laid out in this response, the Government must make both short and long-term commitments to the industry through robust regulatory and financial policymaking.

 

August 2020