Weekly News Review - 17th March 2023
Chancellor delivers boost to CCS and nuclear projects in Spring Budget
Chancellor Jeremy Hunt announced £20bn of support for the carbon capture and storage (CCS) industry in his Spring Budget on Wednesday. The funding will help in the early development of CCS projects starting in the East coast, Merseyside and North Wales before expanding across the whole country.
The chancellor also provided support for the nuclear industry by announcing plans to reclassify nuclear energy as environmentally sustainable which is hoped will encourage more investment. Mr Hunt also launched Great British Nuclear which will oversee the delivery of new nuclear plants to meet the government’s target to provide 25% of electricity from nuclear by 2050.
As well as re-stating the government’s commitment to provide £700m of funding to Sizewell C, the chancellor also launched the first competition to develop small modular reactors (SMRs). However, there was no new funding announced for home insulation with the chancellor ignoring recommendations to bring forward spending on energy efficiency allocated for 2025 which would help to reduce energy bills sooner.
Mr Hunt said: “We don’t want to see high bills like this again, it’s time for a clean energy reset. That is why we are fully committing to nuclear power in the UK, backing a new generation of small modular reactors, and investing tens of billions in clean energy through carbon capture.”
The energy security secretary, Grant Shapps, said: “Already a global leader in offshore wind power, we now want to do the same for the UK’s nuclear and carbon capture industries, which in turn will help cut the wholesale electricity prices to among the lowest in Europe.”
However, climate campaigners have criticized the budget announcements labelling them a “dangerous gamble on unproven technologies”. Chief executive of Climate Group, Helen Clarkson, said: “This spring budget overlooks cheap and clean renewable energy, and instead rebrands nuclear as ‘environmentally sustainable’ and throws cash at carbon capture technology. This was a missed opportunity to renew the UK’s commitment to climate leadership.”
Coal power stations unlikely to provide back-up next winter
The Department for Energy Security and Net Zero have been considering extending contracts for coal plants to provide back-up capacity next winter. However, energy company EDF has stated that “a number of workforce and operational reasons” make keeping West Burton A open “very challenging”.
National Grid said they had been contacted by the government department on Wednesday to ask if they could negotiate with coal plant operators to keep the capacity on standby for another winter. However, EDF confirmed that West Burton A will close as planned on 31 March.
EDF said: “Retaining suitably qualified and local personnel to ensure safe operation was a major challenge last year and, looking forward, becomes untenable as many of the workforce have stayed on well beyond planned retirement dates already.”
Two of the coal-fired power stations put on standby this winter were called into action last week as temperatures across the UK fell. The two plants at West Burton in Nottinghamshire were originally due to close last September but have been receiving payments from National Grid to remain on standby over the winter together with two units at Drax in Yorkshire and one at Ratcliffe-on-Soar in Nottinghamshire.
Drax have also confirmed they will be closing this month, saying: “With two major maintenance outages planned on our biomass units this summer, and a number of certifications expiring on the coal-fired units, the units would not be able to operate compliantly for winter 2023.”
Coal generation has gradually been replaced by gas and renewables in recent years as the UK aims to reduce its carbon emissions. Over the last three years coal generation has made up only 2% of total demand, down from 10% in 2016 and 40% in 2013. The closure of the UK’s remaining coal plants will put extra pressure on interconnector imports and demand flexibility to ensure peak demand is met next winter.
Extended life for two UK nuclear power stations
French energy company EDF has announced that the two nuclear power stations at Heysham 1 and Hartlepool will have their closure date delayed until early 2026. The plants were due to close in March 2024 but the two year extension will improve energy security and reduce demand for imported gas as well as providing job security for the 2,000 employees working at the two sites.
EDF said: “The decision has been made after a rigorous review by EDF of the technical and commercial cases for life extension. In particular, positive inspections of the graphite reactor cores during 2022 have increased confidence that the stations can generate for longer and continue to meet stringent regulatory standards.”
Managing Director of EDF’s Generation business, Matt Sykes, said: “Our ongoing investment and careful stewardship of the UK nuclear fleet since 2009 has allowed us to make today’s decision and helps support the UK’s energy security at this challenging time.”
“As well as helping the UK reduce its use of imported gas, it is also great news for the 2,000 skilled people whose jobs are supported by these sites and will help preserve valuable technical and operational skills that will be critical as the UK seeks to re-build its nuclear capability.”
At the start of 2022 there was 7.9GW of nuclear capacity in the UK. However, following the closure of Hunterston B and Hinkley Point B capacity fell to 6GW. EDF’s decision to extend the lives of Heysham 1 and Hartlepool will maintain this level until 2026 when it will fall to 3.6GW.
There is currently only one nuclear power station under construction in the UK at Hinkley Point C. This is forecast to become fully operational around the same time as the scheduled closure of Heysham 2 and Torness meaning that total nuclear capacity will only increase to 4.4GW. This is significantly lower than the 12GW of nuclear capacity the country had when the last nuclear plant opened at Sizewell B in 1995.
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