Posted by

Tom Nolan, Policy Adviser

25 May 2012

The draft Bill follows the ratification by Parliament last year of a series of energy national policy statements, including one that deals solely with nuclear power. They didn’t receive much media attention but they were one of the most pro-growth measures that we have seen recently. The statements identified the sites across the UK that are suitable for new nuclear power plants, eight in total and all adjacent to existing nuclear sites. Importantly they also created a planning regime for these sites that will be faster and more predictable than the one that had gone before. Although a caveat is required here: a separate piece of recent planning reform that will give the Secretary of State the final decision on all major infrastructure projects has added some unpredictability into the planning regime.

The UK was the first country in the world to use nuclear energy to generate power for large-scale civilian use. The first plant was opened in 1956 at Calder Hall in Cumbria. Power generated from nuclear peaked in 1997, when 26% of the nation's electricity was generated from the source. While the share has gradually declined since then it still contributes around 16%, and there are 17 nuclear reactors at nine plants. This means that the UK has built up a strong globally competitive skill base in nuclear technology that is sought after around the world.

Recently the trend internationally, and in Europe in particular, has been to move away from nuclear power. The UK alongside countries such as Poland are one of the few places where there is still strong support for the power source and where the government is actively trying to encourage investors into the market.

France has traditionally been Europe's most enthusiastic supporter of nuclear power, fears for energy independence in the aftermath of the 1970s oil crisis was the catalyst for making nuclear their main source of energy. But the new administration there is proposing to reduce its share of nuclear electricity production from 74% to 50% by 2025.

Germany plans to abandon nuclear power by 2022 have been well documented and have had an understandable impact on investment decisions by companies throughout the world, including the UK.  Switzerland has said it will abandon nuclear by 2034, while Italy has voted against restarting its nuclear programme. Nuclear also looks like it will be a dividing issue in the forthcoming elections in places such as the Netherlands. All this means that they are fewer and fewer countries able to offer a stable and friendly market to investors.

All but one of the UK’s nuclear reactors will close by 2023. Extending the lifetime of existing nuclear plants is an option but it is only a short term fix. As the department of energy has said it will just be shifting a problem to another day.

A draft bill will allow the government time to take on board expert advice to ensure that once they publish a full bill later this year, and it must be this year, they will have got the design of the market correct. Add to this the reform of the planning system and the strong skills base already in place they the UK should become one of the most attractive countries for investment in a new generation of nuclear power.