A computer generated impression of EDF's recently approved Hinkley Point C nuclear power station

Nuclear strategy fails to guarantee power price

The government today revealed its long-term strategy for the nuclear industry but fell short of announcing a guaranteed power price.

Business Secretary Vince Cable announced the publication of the Nuclear Industrial Strategy in a written statement to the Commons but the document does not include a strike price – or minimum power price – that operators want spelled out before investing billions in new power stations.

Britain plans to build up to 16GW of new nuclear power stations within the next decade to replace ageing coal-fired and nuclear sites, which the report says could create 40,000 new jobs, but the government has yet to outline a guaranteed price for the power produced.

French firm EDF and Japan's Hitachi both have plans to build in Britain and these firms want a strike price of at least £100 per megawatt-hour (MWh), while the government would prefer a price around £80 per MWh.

EDF won planning approval in March to build Britain's first new nuclear station in almost 20 years at Hinkley Point in Somerset, but warned the project would only move forward if it could reach an agreement on the power price.

"Ministers have made clear that any deal will need to be in the interest of the consumer. Any agreement reached will be laid before Parliament, and will include details of the strike price," the government said in a statement.

The strategy released today sets out a long-term approach to the opportunities for economic growth and job creation from the nuclear industry, including research and development, building reactors, waste management and decommissioning, as well as operations and maintenance.

It comes in response to a 2011 report from the House of Lords on the UK's nuclear research and development capabilities and recommendations from the Nuclear Research and Development Advisory Board.

"We have some of the finest workers, research facilities and academics in the world. But we need to sharpen those competitive advantages to become a top table nuclear nation," says Business Secretary Vince Cable.

The government forecasts that more than £1tr will be spent on building and decommissioning nuclear reactors over the next two decades, and with concerns having been raised over a shortfall in home-grown talent the strategy includes millions of pounds of investment into R&D.

Sir John Beddington, the government’s chief scientific advisor, says: “The requirement for nuclear power may exceed current plans for new build, perhaps substantially.

“It’s therefore crucial that we keep a wide range of technological options open so that we are able to meet this potential demand in a safe and sustainable manner. Today’s announcements on R&D and on skills are the first steps in doing exactly that.”

Rhian Kelly, CBI director for business environment policy, said: “ We urgently need to get the right market framework in place and the strategy should build on this to ensure the UK is well-placed to benefit from growth in new nuclear over the coming decades.

“The UK already has significant expertise in civil nuclear, but we cannot rest on our laurels, and this strategy lays out a pathway to greater R&D investment and tackling skills shortages.”

Britain's nuclear industry is already largely owned and operated by foreign companies, but Dame Sue Ion, a fellow of the Royal Academy of Engineering, believes there are plenty of opportunities for British firms to benefit.

She said: “The strategy recognises that there are significant opportunities for companies in the UK supply chain to gain a foothold and begin to make their marks on the global stage in the first wave of new nuclear power stations. However, it also recognises that key investments in engineering development will have to be made to pave the way for success.”

The publication follows the launch of the government’s aerospace strategy last week, with plans for oil and gas to be published later this week.

The government plans to release strategies for all 11 key sectors in the coming months, but Friends of the Earth's head of campaigns Andrew Pendleton questioned the approach and the government’s continued support for the nuclear industry.

"The UK needs a coherent industrial strategy, but this isn't it. Bringing out separate strategies on nuclear, gas, oil and wind shows a lack of joined-up thinking by the Coalition on how we move to a low-carbon economy,” he said.

"Nuclear power is an outdated and hugely expensive energy source, delivered vastly over-budget and late, by a declining industry defined by escalating costs.

"The global eco-tech revolution will happen with or without Britain. So that we are not left behind, the government should be positioning us at its forefront by harnessing our bounty of clean British energy from the wind, sun and sea. This will create thousands of jobs and build a prosperous, secure economy."

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