The nuclear option – Can atomic power arrive in time (and on budget)?

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."

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.

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."