With the vote cast and Britain leaving the EU, it’s hard to say what’s going to happen. Ellis Rintoul takes a look at what people have been saying.

The new nuclear build in the UK, planned in order to replace our fleet of ageing nuclear reactors, is being controversially pioneered by the new pressurised water reactor at Hinkley Point C (HPC). It will be the first nuclear plant to be built in the UK in almost 20 years and is designed to provide about 7% of the UK’s power [1]. Capital is being provided by EDF as well as China General Nuclear (CGN), who will take a 33.5% stake in the £18bn project for their troubles. CGN have also expressed their aims of following HPC up with an additional plant in Essex, using Chinese reactor technology and with EDF’s support.

 

Two more plants have been proposed. One by NuGen to be located at Moorside using the Westinghouse Electric AP1000 design [2] and the other an advanced boiling water reactor situated on the Isle of Anglesey and constructed by Horizon Nuclear Power, a subsidiary of Hitachi [3]. So, will these plans come to fruition? HPC has been given the go ahead and the chairman of EDF, Jean-Bernard Lévy, has said in a statement following the referendum “Our business strategy is not linked to Great Britain’s political affiliation with the European Union, so we have no reason to change it”. Horizon Nuclear CEO Duncan Hawthorne has declared that “New nuclear is vital for the UK’s future electricity mix and so today’s announcement on Hinkley Point C is good news for the country’s security of supply and clean energy needs” [3]. NuGen are waiting for the AP1000 design’s final approval in the UK before taking a final investment decision. A spokesperson for NuGen has however expressed their continued support the project and that “NuGen’s shareholders, Toshiba and ENGIE, remain committed to taking forward Moorside – Europe’s largest new nuclear power station – to produce and sell power to the UK grid. We firmly believe the case for new nuclear power stations for the UK is compelling, and unchanged as a result of the referendum.” [4]

 

To me, these statements by the three show a continued support of our nuclear industry. Andrea Leadsom, the Secretary of State for Environment, Food and Rural Affairs has also reiterated the UK’s commitments to decarbonisation of our energy supply [5]. There are other hurdles, however. The European Commission has ruled that withdrawal from the EU would also come with automatic withdrawal from the Euratom treaty which could have major implications for our nuclear industry [6]. The Euratom treaty was created in 1957 and is governed by EU institutions while still being, legally speaking, a separate entity. It covers all civil nuclear activities including things such as the supply of ores, source materials and special nuclear materials inside the EU community [7].

 

It’s hard to tell what exactly the effect of renegotiating something like this may be. It’s possible that contracts already in place would remain unaffected by the UK exit of Euratom, but it’s impossible to tell until Article 50 is triggered. Furthermore, problems could arise with having to renegotiate the US’s nuclear cooperation with us as it comes via their arrangement with Euratom under the 123 agreement.

 

While the view of groups wishing to invest in the UK nuclear industry look positive, people such as Fiona Reilly, PwC’s global head of nuclear capital projects and infrastructure would disagree. Fiona commented that leaving the EU “Could have significant impact on our nuclear programme” and that “Ongoing uncertainty in the market, at least in the short term, could affect access to capital and investors confidence in what is already a limited trading arena” [8]. And that was only addressing nuclear industry! What of our research? The UK Atomic Energy Authority (UKAEA) receives £55m annually from European funding and Professor Steve Cowley, CEO of the UKAEA, has expressed fears that this may be lost [9]. He said groups such as the Joint European Torus (JET), located in Oxfordshire, may have to shrink if funding is lost and that “After [Brexit] we will lose our influence, we will lose our capability to argue for it, and eventually the EU will put the experiments in this area of science in other places.”

 

Either way Brexit does not necessarily spell doom and gloom for the UK nuclear industry. With HPC given the go-ahead and investors still seeming keen to build new and innovative plants in the UK there could still be hope for a country that once led the worlds in terms of civil nuclear technology.

 

[1] http://www.bbc.co.uk/news/business-36897180

[2] http://www.nugeneration.com/moorside.html

[3] http://www.horizonnuclearpower.com/

[4] http://www.itv.com/news/border/update/2016-06-27/moorside-nuclear-plant-plans-unchanged-following-brexit/

[5] https://www.gov.uk/government/speeches/realising-the-vision-for-a-new-fleet-of-nuclear-power-stations

[6] https://www.theguardian.com/environment/2016/sep/27/brexit-could-trigger-uk-departure-from-nuclear-energy-treaty

[7] http://ec.europa.eu/euratom/index.html

[8] http://pwc.blogs.com/press_room/2016/06/eu-referendum-pwc-comments-on-the-impact-on-the-energy-industry.html

[9] http://www.bbc.co.uk/news/uk-england-oxfordshire-36288657

  1. Really good well thought out piece, thank you. I didn’t know that our US arrangements were baked into euratom. I think you’re right that it’s too soon to tell – and typical of PwC to be looking for trouble. Could is the operative word and whilst the parties to the various contracts seem sanguine, she’s looking for uncertainty to sell consulting services…

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