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Small modular reactors ‘crucial’ to power sector decarbonisation, report finds

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Small modular nuclear reactors (SMRs) will be a crucial technology in the UK’s bid to decarbonise its power supply, a new report has concluded.

Published today, Policy Exchange’s ‘Small Modular Reactors: The next big thing in energy?’ report finds that SMRs will be necessary to offset the limitations of renewable energy sources as the UK’s power mix goes increasingly low carbon.

The report is set against a backdrop of the country facing a pivotal time in the development of power generators. With the government having already established that unabated coal firing plants will be phased out by 2025 and 14 of the UK’s existing 15 nuclear power stations set to close by 2030, around 40% of the country’s generation capacity is set to shutter in the coming years.

Last week the Committee on Climate Change argued that as much as 100TWh of new, low carbon electricity generation would be needed to meet the UK’s carbon emissions targets within the fourth and fifth carbon budgets.

And this looks set to grow even further – by as much as an additional quarter – should the country’s vehicle fleet go all electric.

Matthew Rooney, the report’s author, has said this would need “previously unthinkable levels” of power, ultimately concluding that renewables alone cannot meet that requirement whilst also fulfilling the government’s need to do so affordably.

Rooney states that while a 100% renewable power supply would be possible, it would be “unnecessarily expensive” and “perhaps unsustainable” given the need for large back-up capacity and storage facilities.

As a result, nuclear power stations are considered a vital cog in the power mix. The inherent problem with large-scale nuclear projects is however their lead time, cost and ability to source finance. Hinkley Point C has been routinely pilloried for its runaway costs and substantive delays, leading numerous reports to bemoan its lack of value to the taxpayer.

SMRs have therefore grown in popularity within government and the Department for Business, Energy and Industrial Strategy (BEIS) has been vocal in its desire for the technology to be developed in the UK.

Policy Exchange’s report argues that SMRs could not just play a crucial role in decarbonising the power sector, but also contribute towards heat decarbonisation by diverting excess power (at times of significant renewable supply) to hydrogen production through hydrolysis.

It has set out a number of recommendations for the government to pursue, starting with a short to medium-term aim of prioritising technology that can provide low-cost, low-carbon power in a “timely manner”. This, the report says, narrows down the selection to third generation pressurised water reactors.

The country should therefore prioritise the development of third generation SMR designs rather than designs which are unlikely to generate power before the 2040s.

The report also recommends a number of policy actions it says the government should pursue if it is to realise the full potential of SMRs and decarbonise at least cost, including the scrapping of specific renewable energy targets in favour of a more objective-led approach, and appointing a third-party consultancy to properly assess the future costs of intermittency and attach values to dispatchable and non-dispatchable electricity.

Rooney said that while cost reductions seen in solar and wind were “impressive”, they could not be relied upon as energy sources without requiring the investment of “huge amounts” in storage technology.

“Based on 2017’s data, this month is likely to see at least a week when solar and wind output is almost zero, meaning we can’t rely solely on them without huge investment in currently inefficient storage or backup power. To power our current electricity system for a typical five day working week in January using batteries alone would require the capacity equivalent to approximately 200 million Tesla Power Walls, which would cost up to £1 trillion.

“There is no other low carbon energy which can match nuclear power for scale and reliability, as well as the potential to use it for other services like district heat and hydrogen production. The failure of the nuclear industry to prove that it can finance and build large reactors on time and to budget means that the development of small modular reactors must be one of the central goals of government energy policy,” Rooney said. 

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