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Seventy years into an industry's history is late in the day to find favour. Yet, after over a decade out of fashion, nuclear power is back on the agenda. Governments around the world are making fresh commitments as the dual pressures of ambitious net zero targets and focus on energy security mount. Indeed, nuclear power's years in the wilderness come despite its enormous energy potential and ability to provide stable 'baseload power' output – all without emitting carbon. To put this in perspective, a lump of uranium the size of a chicken egg can provide as much electricity as 88 tonnes of coal.

But ramping up nuclear power remains challenging, logistically, economically and politically. High-profile projects have suffered from continued delays and exceeded budgets. Meanwhile, the excitement around the next generation of small modular reactors (SMRs) has yet to produce a fleet of commercially viable projects, with the technology subject to many of the regulatory hurdles that larger plants face. Public and political fears around safety, heightened by Japan's 2011 Fukushima incident, slowed and in some places reversed what had at that time seemed to be a new nuclear renaissance.

And yet, among policymakers the belief is dawning that nuclear power will be an essential pillar of the energy transition. "They know you're not going to reach net zero with just traditional renewables alone," says Paul Butcher, Herbert Smith Freehills (HSF) director of public policy. "The system costs of renewables are significant and they need backup. Really, there isn't a choice. Recent bold moves by big tech companies into nuclear reflect the same realisation. I'm also not surprised by the newly rekindled debate in Germany about a return to nuclear."

Indeed. Current global nuclear output alone helped avoid a striking 2.1 billion tonnes of carbon dioxide emissions in 2023 from equivalent coal generation, according to the World Nuclear Association. Despite this considerable offset, the International Energy Agency (IEA) forecasts global nuclear capacity will need to more than double to 916 GW by 2050 to meet globally agreed emissions targets. To that end, at the COP28 global climate summit in 2023 more than 20 countries agreed to triple capacity in the timeframe. Meanwhile, in March this year, 11 EU member states formed an alliance on nuclear power in Europe, with the goal of increasing the technology's role in the bloc's energy strategy.

"The public perception of nuclear is becoming more positive," says HSF global co-head of energy Lewis McDonald. "Nuclear gives you baseload power without carbon. Any country that can make it play a material part in their energy mix will relieve the pressure on their system in a significant way."

So, politically nuclear power is back in fashion and its energy credentials were never in doubt. But is that enough to secure dramatic increases in a technology which has been hampered by a lack of strategic policy?

In the final instalment of our Chasing Zero series exploring the technologies touted as energy transition champions, we assess what has hindered nuclear power's recent development and explore how governments can put the industry back in the race.

Nuclear gives you baseload power without carbon. Any country that can make it play a material part in their energy mix will relieve the pressure on their system in a significant way.

Lewis McDonald
Global Co-Head of Energy, Herbert Smith Freehills


Why do nuclear projects take so long?

The IEA estimates nuclear projects starting between 2010 and 2020 are on average three years late. The most notable example in the UK is the Hinkley Point C project, spearheaded by French-based energy multi-national EDF. The project is now expected to be completed between 2029 and 2031 – later than originally envisaged. Similar problems are also felt across the Atlantic. For example, the expansion of Georgia Power’s Vogtle plant reportedly ran seven years' late and $17 billion over budget.

While nuclear power projects are huge technical undertakings and inevitably subjected to exacting safety standards, industry observers argue that the combination of needlessly onerous regulation and a lack of long-term thinking from policymakers is causing many delays. Such challenges are often cited in the UK where, owing to debateable assumptions about nuclear safety, the regulatory rachet has tightened significantly, making it harder to standardise (and speed up) projects.

At Hinkley Point C, there were 10 years between the government proposal white paper on its creation and the start of construction, with 31,000 pages of environmental assessment required. Meanwhile, the Office for Nuclear Regulation (ONR) insisted on 7,000 changes to EDF's original design, turning a template for a nuclear power station into a first-of-a-kind project with 25% more concrete and 35% more steel than the previous plant it was replicating.

"Some countries have been able to deliver projects better because they've developed them one after another," says McDonald. "In the UK, where the projects are more bespoke it becomes almost impossible to develop that momentum and approach."

A project which has faced a relatively smooth regulatory process is the Barakah Nuclear Energy Plant in Abu Dhabi, which is being built by Korean contractor KEPCO, seemingly without significant delay. Such projects could prove significant as the UK ONR has recently signalled it is open to considering the regulatory standards adhered to in other countries. "It's a different story there," McDonald adds. If the UK or any jurisdiction wants to get costs and delay down, they need a pipeline to learn from. It is about fleets. This is what KEPCO have been allowed to do."

The peculiarities of the UK's planning system are partly to blame, says Catherine Howard, HSF's head of planning: "The Planning Act 2008 made pre-application consultation a legal requirement which has led to years of work before an application is even made. The extent of environmental impact assessment required has also grown exponentially. There wasn't even such a thing as environmental impact assessments in 1989, when Sizewell B was consented."

For many, the best historical example of how nuclear power can be economically scaled up is France. Following the 1973 oil crisis, the country built 60 reactors at 55 GW of capacity between 1977 and 1996, decarbonising 70% of electricity production in the process. Can such ambition be recaptured?


Why are nuclear projects so expensive?

The broader frustration is delays and budget overruns have created a negative cycle, deterring governments from committing to more nuclear development, halting the momentum required to bring down costs and shorten timelines. "No one in the industry argues you can have a cheap nuclear power station when it’s a first of a kind," argues Butcher. "The surest way to cheap nuclear power is building fleets."

Momentum is crucial because a pipeline of projects allows the development of key expertise, supply chains and increased investor confidence. Even within projects themselves these benefits can be felt – the second reactor at Hinkley Point C is already estimated to be 30% cheaper than the first. Sizewell C is due to add reactors three and four with further savings. In particular, it will be a pertinent lesson for the development of SMRs – a much touted technology that uses established reactor designs which can be factory assembled and installed at location. The UK Government is running a tender process for a series of SMR projects, announcing in October the contenders had been whittled down to four: GE-Hitachi Nuclear Energy International, Holtec Britain, Rolls-Royce SMR, and Westinghouse Electric Company UK.

An Image of Paul Butcher

No one in the industry argues you can have a cheap nuclear power station when it's a first of a kind. The only way of making nuclear cheap is with fleets.

Paul Butcher
Director of Public Policy, Herbert Smith Freehills

Eyes will be on how the UK Government handles its SMR strategy moving forward and perhaps lessons can be learnt from elsewhere. For example, South Korean engineering of nuclear is widely regarded to benefit from the country committing to building multiple projects in a row, enabling a robust supply chain and skills ecosystem to develop. Knowing long-term work is available and costs will likely come down, investors feel comfortable committing capital. The development of new talent pools with this approach is becoming more important as nuclear's previous vogue period was in the 1970s and 1980s, meaning specialist skills today are in shorter supply.

Meanwhile, creative financing structures can also help manage costs and lure investors given that financing can be well over half the cost of nuclear projects. While Hinkley Point C will use the contracts for difference structure pioneered for the UK renewables sector, ensuring a guaranteed strike price, Sizewell C will use a regulated asset base (RAB) model. This allows the project risks to be shared between investors and consumer bills. It has been estimated that if the RAB model had been applied to Hinkley Point C it could have cut costs by 40%. The lower costs and risk go hand in hand with opening up investment in new nuclear for a wider spectrum of investors.

Silke Goldberg, a partner in HSF's power practice and Global Head of ESG, reflects: "Government is looking at how investment can take place and ways for the investor to receive income certainty during the construction phase. The RAB model is hugely significant in helping companies invest and it touches upon a larger discussion about the role of the state in the energy sector and these mega projects in particular."

The 'true' costs of nuclear compared to alternatives is also a matter of debate. Advocates argue when the system costs of renewables are properly accounted for, and the fact nuclear provides stable power unhindered by intermittency, the comparisons become more favourable. The costs and logistics of decommissioning a nuclear plant are also in place from the moment the project is consented.

"Nuclear is the only one which has a detailed decommissioning plan from the very start," Butcher points out. "That’s because it has to. Before building you need a plan which details how you take everything apart. In the UK that plan has to be costed and funded in a way that is insolvency remote from the operator. It's all in the price. Many recently-built renewable assets will be being decommissioned before 2050, while nuclear assets can keep providing energy for decades longer."

However, while the technology underpinning nuclear projects is largely transferable,  varying environmental factors can have a big impact on cost and risk, according to HSF's head of non-contentious construction Tim Healey: "It's always going to be difficult because of sheer capital scale and the timeframes. The technology for nuclear reaction is the same from project to project, but what changes is the ground condition. The design for the foundations and structures will always be different and that's where a lot of the risk is; it's the fact you have to have such high confidence these structures will have integrity for a long time."

Ultimately, these considerations are why a key focus for SMR development will be to create factory-made platforms that can be installed in different locations without bespoke foundations or structures.

Experimenting with the RAB model is hugely significant in helping companies invest and it touches upon a larger discussion about the role of the state in these mega projects.

Silke Goldberg
Partner, Herbert Smith Freehills


Will nuclear power come back into favour?

The needs of the energy transition are seeing billions of dollars pour into new clean energy technologies such as energy storage, hydrogen and established renewables such as wind and solar. With ample choice for investors, nuclear must be quicker to arrive and more predictable.

But with over 80% of global energy still coming from fossil fuels, no solution can be dismissed – and nuclear is no ordinary solution. Sizewell C is set to be half the size of a typical English farm, but to produce the equivalent amount of power from offshore wind would need a space larger than Greater London. Moreover, safety fears are significantly overblown – alongside solar, nuclear is the safest form of power on a fatalities per energy unit basis.

A global nuclear renaissance will require major improvements in cost, development times and project risk but this is achievable. Regulatory reforms (some of them simple) and long-term government commitments would allow the supply chain to mature and investor confidence to grow. Jaded observers will note that hard, long-term realities often prevent necessary decisions and trade-offs from being addressed. Yet nuclear power brings advantages that no other energy source can yet rival. It is not that there is no choice but that the obvious choice should be made to work more cost-effectively and then scaled up.

"Given the imperative of climate change, its strong safety record and the fact it uses such a small amount of land, raw materials and fuel without producing significant greenhouse gas emissions, nuclear is in many ways the holy grail of power," concludes McDonald. "That's why it's coming back."


Key contacts

Lewis McDonald photo

Lewis McDonald

Global Co-Head of Energy, London

Lewis McDonald
Silke Goldberg photo

Silke Goldberg

Partner, London

Silke Goldberg
Paul Butcher photo

Paul Butcher

Director of Public Policy, London

Paul Butcher
Catherine Howard photo

Catherine Howard

Partner, London

Catherine Howard
Tim Healey photo

Tim Healey

Partner, London

Tim Healey
David Ryan photo

David Ryan

Partner, Sydney

David Ryan
Lachlan Clancy photo

Lachlan Clancy

Partner, Tokyo

Lachlan Clancy

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