Today the Financial Times published an article by its new energy editor, Sylvia Pfeifer, headlined ‘Subsidies for ‘mini’ nuclear power plant backed by review: Nascent industry should have same help as offshore wind, expert report says’ https://www.ft.com/content/8882090a-999a-11e8-ab77-f854c65a4465)
“I was very pleased to be asked to chair the Expert Financing Working Group, particularly at such an important time for the nuclear industry in the UK. The UK has a strong heritage in nuclear energy and it continues to be recognised by HMG as an important part of the UK’s diverse energy mix, recognising its impact as a low carbon technology. It plays an important role in delivering HMG’s Clean Growth Strategy providing clean, green, on-demand and baseload low carbon energy.
It should be remembered that civil nuclear has a much wider role in the global market and will continue to do so in the future. Nuclear and nuclear isotopes are recognised as important to so many areas. Nuclear energy alone currently accounts for 11% of the world’s electricity (with the objective of raising this to 25% by 2050) however nuclear and nuclear isotopes have a much wider application. The United Nations Sustainable Development Goals 2030 agenda sets out 17 goals and how they will be implemented to meet the United Nation’s objectives around people, the planet, prosperity, peace and partnership. Nuclear and nuclear isotopes play an important role in nine of the 17 goals including: food security, improved nutrition, water and sanitation, climate change, conserving oceans and ecosystems, medical, energy for all and resilient infrastructure, industrialisation and innovation. (my emphasis – DL)) The emergence of small nuclear as, I believe, a commercially viable technology will further contribute to delivering these goals and the UK is well placed to take a leading role in their development both in the UK and across the global energy market.”
This is part of the preface to a new 80-page report published on 7 August on ‘Market framework for financing small nuclear’ prepared by the Expert Finance Working Group on Small Nuclear Reactors established by BEIS, written by its chair, Fiona Reilly. (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/732220/DBEIS_11_-_Market_Framework_for_Financing_Small_Nuclear_EFWG_Final_Report_.pdf)
Even for an atomic aficionado, finding so many positive atomic applications is quite an achievement!
One of the SDGs is: “to protect, restore and promote sustainable use of terrestrial ecosystems, sustainable manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss.”
The report boldly asserts “Small reactors could play an important role in achieving these goals” without spelling out how. I cannot relate this SDG to SMRs, however hard I try.
Fiona Reilly is currently an Executive Partner at Atlantic SuperConnection - a Disruptive Capital group company- and a Director of the Nuclear Industry Association. (https://www.gov.uk/government/groups/expert-finance-working-group-on-small-reactors) and a non- executive director of the nuclear sector primary lobby group, the Nuclear Industry Association. She was previously Global Head of Nuclear at Norton Rose Fulbright and Global Nuclear Lead for CPI at PwC. She has over 20 years’ experience in the nuclear sector and often serves as an expert for the IAEA
The Expert Finance Working Group (EFWG)* is described as “an independent group” convened by the Department for Business, Energy and Industrial Strategy (BEIS) in January 2018 ”to consider what was needed to attract private financing to small reactor projects. The EFWG has settled on a number of recommendations for Her Majesty’s Government (HMG) to consider to assist in enabling the development of small nuclear projects in the UK. “
Quite how” “independent” could such a group be if its chair is a director of the main cheerleading organization - the Nuclear Industry Association - for the nuclear industry in the UK?
Key EFWG recommendations included:
· HMG should help to de-risk (perceived and real risks) the small nuclear market in order to enable the private sector to develop and finance projects.
· The EFWG concludes that, subject to the recommendations below, the UK could be well placed to develop first-of-a-kind (FOAK) small reactors projects, with overnight costs of less than £2.5 billion, by 2030.
· The characteristics of small nuclear reactors and the mechanisms by which they can be delivered are such that they may be commercially viable propositions both in the UK and for an export market, however, as with any significant energy or infrastructure project, attracting private finance will be challenging for the FOAK projects.
The recommendations also contains the ultimate Panglossian assertion on nuclear in the UK: “HMG’s actions could build on the momentum, trust and confidence created by large nuclear such as Hinkley Point C and now Horizon.” (emphasis added-DL) (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/732220/DBEIS_11_-_Market_Framework_for_Financing_Small_Nuclear_EFWG_Final_Report_.pdf)
The EFWG states that “risk allocation, risk management and managing the consequences of risk within a market framework (created by HMG) became a clear focus of the EFWG’s discussions.”
EFWG also states (p.16) “So far as is currently discernible, the risks attaching to small nuclear of any description are no different to those attaching to the conventional designs.”
This suggests despite several of the report authors being institutional cheerleaders for SMRs, and having been involved in earlier reports for SMRs, they are determined to avoid the inconvenient truth that if you proliferate sites and transports of nuclear fuel associated with SMRs, especially at a time when terrorists threats and acts are increasing, thi swill hugely increase to cost of insuring SMRs
The report laments “the financing sector’s potential misunderstanding of nuclear specific risks and how such risks can be mitigated, and that nuclear specific risks aside, nuclear energy projects are no different to any other energy project..”
But it makes no attempt to provide an analysis of how to provide market-based insurance for SMRs, against accidents and terrorist attack on modules in transit to site and in situ; nor how to privately fund SMR radioactive waste management: yet these are real risks for nuclear power, SMRs included
For example, the EFWG (p.11) talks of “road transportable modules which are easily installed on site” but makes no calculation of the exposure to disruption or indeed destruction of such an SMR module being transported on public roads from fabrication facility to operating site, possible hundreds of miles distant.
All EFWG does is to assert (p.17) without any supporting evidence that “these are as insurable for small nuclear as for conventional projects ”
EFWG does present the almost utopian suggestion (p.23), again without supporting evidence, that : “In terms of nuclear third party risks, small reactor designs are being simplified to reduce the probability of safety events occurring, and some technologies being designed such that a nuclear incident with the release of radiation cannot occur”
Ministers should take such unsupported assurances with handfuls of salt..
Yet the Financial Times reports energy minister Richard Harrington receiving the report very enthusiastically, saying that it “recognises the opportunity presented by small nuclear reactors” adding “Advanced nuclear technologies provide a major opportunity to drive clean growth and could create high-skilled, well-paid jobs around the country as part of our modern industrial strategy,”
*Other EFWG members were:
- Amjad Ghori (Ex Credit-Agricole)
- Dougald Middleton (EY)
- Giorgio Locatelli (University of Leeds)
- Greg Pearce (Commonwealth Bank of Australia)
- Larry Henry (KBR)
- Michael Redican (MAR Consult)
- Richard Abadie (PwC)
- Craig Lester (BEIS)
- Joshua Buckland (HMT)
- Helen Lister / David Clayton (IPA)
- Andrew Howarth (NIRO)
The Secretariat was provided by BEIS and the Nuclear Innovation & Research Office (NIRO).
Its independent make up is further illustrated by the fact Dr Locatelli is listed in hi Leeds University bio as being a “Member of the World Nuclear Organisation (WNA) – SMR “Ad hoc” group.”( https://engineering.leeds.ac.uk/staff/739/dr_giorgio_locatelli) and another group member, Dougald Middleton, working for EY, who were jointly contracted to produce a strongly pro SMR 120-page report – published on 21 July 2016 - titled ‘SMR Techno-Economic Assessment Project 1: Comprehensive Analysis and Assessment Techno-Economic Assessment Final Report. Volume 1’ “(https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/665197/TEA_Project_1_Vol_1_-_Comprehensive_Analysis_and_Assessment_SMRs.pdf); and Amjad Ghori’s own consultancy site states that “Since 2008, Amjad has been very active in the nuclear sector having lead Financial Advisory teams in NPP transactions in Bulgaria, Lithuania and Finland working on behalf of private sector clients.” (https://nuclear-economics.com/amjad-ghori/)