UK net zero strategy ‘a missed opportunity’ to harness nuclear potential

Graham Alty and Richard Griffiths of Pinsent Masons, the law firm behind Out-Law, commented after the government published its ‘net zero’ strategy (36.3MB / 368-page PDF) – a document that contains details of the government’s plans to reduce carbon emissions across the UK economy, in line with its target of achieving ‘net zero’ emissions by 2050, and of its plans to support industry as it transitions to net zero.

In its strategy the government set out its plans to decarbonise the UK’s power system by 2035 and reflected on the potential impact of the electrification of core sectors of the economy, perhaps most notably transport, and the knock-on demand for increased electricity generation that will entail.

As part of its strategy, it confirmed that it sees nuclear as one of several energy sources and technologies important to managing the drive towards decarbonisation. It noted, in particular, how nuclear is a “known” and reliable technology that can complement energy generated from “intermittent” renewable sources, such as wind and solar farms, as well as the potential of new cleantech that is emerging such as carbon capture, usage and storage technology.

“A clean, reliable power system is the foundation of a productive net zero economy as we electrify other sectors – so we will fully decarbonise our power system by 2035, subject to security of supply,” the government said. “Our power system will consist of abundant, cheap British renewables, cutting edge new nuclear power stations, and be underpinned by flexibility including storage, gas with [carbon capture and storage] CCS, hydrogen and ensure reliable power is always there at the flick of a switch.”

On nuclear power, however, while the government reiterated its plans to increase capacity it did not set out much in the way of fresh detail or policy. Instead, it restated previous announcements, including those from its energy white paper and the prime minister’s 10-point plan for 'green industrial revolution' which included commitments to advance nuclear power as a clean energy source.

However, the government confirmed that it would make a final investment decision in relation to the proposed new Sizewell C nuclear power plant in Suffolk before the end of the current parliament in 2023. Negotiations are currently ongoing with the proposed developer. The government said it would establish a ‘regulated asset base’ model to facilitate its Sizewell C decision and to inform funding for other new nuclear projects too. In addition, the government promised, to publish a roadmap for deployment in 2022, alongside further details of how a new £120 million Future Nuclear Enabling Fund, designed “to provide targeted support in relation to barriers to entry”, will operate.

Alty said: “The government’s commitment to a final investment decision for Sizewell C in 2023 and its confirmed intent to support a regulated asset base model is welcome news. However, the industry was expecting more from this announcement and the opportunity to take greater advantage of the vital role new nuclear power and its technologies could play in driving the decarbonisation of the UK is being missed. The nuclear roadmap planned for 2022 seems to ‘kick the can down the road’ in relation to a wider commitment to support other large scale nuclear power plants and small modular reactors.”

Griffiths said: “As energy demand increases, the energy mix needs large scale nuclear power, small scale nuclear power and emerging low carbon technologies, including gas with carbon capture technology which has a role to play as a back-up supply, to underpin the welcome continued expansion of power infrastructure from renewable sources. Much of the government’s latest announcements re-confirm the same pledges and commitments, such as the Advanced Nuclear Fund and an Advanced Modular Reactor demonstrator in the early 2020s, which is disappointing many months later and on the eve of COP26.”

“As we continue to experience the effects of energy price volatility, the government needs to address its nuclear strategy head on if it is serious about decarbonisation and reducing the UK’s reliance on importing expensive energy from overseas, and its associated imported emissions,” he said.

The government is currently in the process of revising its raft of national policy statements relating to energy infrastructure. As part of its planned reforms, it has described the need for nuclear generation capacity as being urgent. It has committed to developing and publishing a new technology-specific national policy statement for nuclear energy generation, though it has provided no timescale for doing so. 

Alongside its net zero strategy, the government also published a separate heat and buildings strategy (8.35MB, 202- page PDF). According to the strategy, the UK’s ‘net zero’ ambitions depend on decarbonisating “virtually all heat in buildings” and on moving “gradually, but completely, … away from burning fossil fuels for heating”. Improving public awareness of energy use and the need for greater energy efficiency of buildings is one of the aims of the strategy.

A core plank of the heat and buildings strategy is the government’s aim for the market to install at least 600,000 hydronic heat pumps per year by 2028. Heat pumps are considered to provide an energy-efficient way of heating homes, and the government’s plans to support their use comes at a time when it has already committed to effectively banning the installation of gas- and oil-powered boilers in new build homes from 2025 through planned changes to building regulations and to phase out the installation of natural gas boilers beyond 2035. A new £450 million Boiler Upgrade Scheme, offering households a £5,000 grant to switch to low-carbon heat pumps, was announced by the government in its strategy.

“To transform the national heating system, we need to replace many of the existing sources of heat with a variety of energy efficient, low-carbon technologies,” the government said. “We see heat pumps, heat networks and hydrogen as potentially playing a pivotal role in decarbonising heat. But we recognise that other technologies such as bioenergy, geothermal heat, and storage heaters may be a more viable alternative in some cases.”

Stacey Collins of Pinsent Masons said that improving the energy performance of buildings and heat efficiency will entail significant retrofitting of properties. This comes at a cost, however, and raises questions of how new measures will be paid for at a time when many consumers are already in fuel poverty and when they, and energy suppliers, are grappling with the rising price of gas supplies.

The government said that it considers “improving the energy efficiency of homes to be the best long-term method of tackling fuel poverty”. To further address the issue, however, it announced an extension of the Energy Company Obligation (ECO) scheme, which was set to close in March 2022. The next iteration of the scheme will run from 2022 until 2026.

Under the latest scheme, which launched in 2018, there has been a 31% decrease in the number of households being retrofitted to address poor energy efficiency. Under the scheme, energy suppliers are required to implement measures including repairing boilers, installing loft and wall insulation, and upgrading central heating systems in eligible households with the goal of improving energy efficiency and reducing fuel poverty across the UK. Data obtained by Pinsent Masons, however, shows there are still currently over 57,000 outstanding submissions with Ofgem waiting for approval.

Alongside the ECO, a number of other energy efficiency schemes have been implemented and scrapped by the government in recent years including the Green Deal which was launched in 2013 and ended 2021 and the solar panel Feed-in-Tariff scheme, introduced in 2010 and ditched in 2019.

“Tackling fuel poverty and lowering carbon emissions is rightly a priority for government and the energy industry, but there are many sectors involved in the development, operation and maintenance of the UK’s housing stock that have an equally important role to play,” Collins said. 

Currently, trials are being conducted on the potential role for low carbon hydrogen in heating buildings. The government’s previously stated ambition is for the UK low-carbon hydrogen production capacity to hit 1GW by 2025 and 5GW by 2030, and there are queries around whether that capacity is better directed at industrial solutions, rather than heating. The government said it will make “strategic decisions on the role of hydrogen in heating by 2026”.