A new report published by the green campaign group Energy Fair shows that rapid renewables growth in the UK spearheaded by solar photovoltaics (PV) will severely eat into nuclear’s market by the time any new nuclear stations are brought online in 2020 or later.
The report, titled The financial risks of investing in new nuclear power plants, states: “By the time any new nuclear plant can be built in the UK, the market for its electricity will be disappearing, regardless of any possible increase in the overall demand for electricity.
“The rapidly declining cost of PV with the falling costs of other renewables, and the likely completion of the European internal market for electricity with the strengthening of the European transmission grid, will be transforming the market for electricity in the UK.”
The authors of the report believe that solar PV’s popularity will grow to such an extent that it will be capable of generating much of the profitable peak-time market for electricity – this would only leave less profitable gaps in the electricity market to be plugged by nuclear. However, the report contests that there are better suited renewable sources for the gap-filling role than nuclear, such as wind power at night.
The pan-European internal electricity market for electricity will allow the UK to benefit from the cascading principle, with solar-generated electricity from sunnier regions in the EU available immediately to UK consumers.
The Energy Fair group report cites a combination of escalating capital costs, build times of seven years or more and payback times of 30 years or more as key challenges facing the nuclear industry that will deter investment.
Dr Gerry Wolff of Energy Fair, commented: “The disappearing market for nuclear electricity means that there is absolutely no case for subsidising nuclear power with ‘contracts for difference’ or any other subsidy.”
He concluded: “If the Government presses on with that policy [contracts for difference for nuclear], we may be saddled with expensive nuclear white elephants that will be paid for by consumers for 25 years or more”.