Q4 2022: Fresh fears for Britain’s nuclear power

Dr Iain Staffell, Professor Richard Green, Professor Tim Green and Dr Malte Jansen – Imperial College London, Dr Malte Jansen – University of Sussex, Professor Rob Gross – UK Energy Research Centre

At a time when we want anything but gas, both technical and economic problems are diminishing Britain’s nuclear fleet.  EDF is contemplating shutting down its Heysham 1 and Hartlepool nuclear stations early, ahead of their March 2024 decommissioning date.  They cite the Chancellor’s ‘low carbon windfall tax’, which adds 45% tax to profits coming from the exceptionally high wholesale power prices.

Heysham 1 and Hartlepool are Britain’s oldest nuclear power stations still in operation.  They were built around the 1970s and came online in 1983, but got off to a slow start, not achieving commercial operations until 1987.  The 1.1 and 1.2 GW reactors produce around 5% of Britain’s electricity demand.  Both stations use the UK’s Advanced Gas Reactor (AGR) design, which was superseded by the Pressurised Water Reactor (PWR) design favoured by Sizewell B and the under-construction Hinkley Point C.

The last two years have seen three of Britain’s AGR stations close down, with a combined capacity of 3.1 GW.  First came Britain’s least productive station: Dungeness B in 2021; and then its two most productive ones: Hunterston B and Hinkley Point B in 2022.  Bringing forward the closure of two more stations could not come at a worse time.

Back in 2019, EDF planned to keep both Heysham 1 and Hartlepool running until March 2024, giving an expected lifetime of 41 years.  Both stations appeared to be in good condition, with no evidence of the cracking that condemned Dungeness B to an early retirement.  The company invested £25 million into maintenance on Hartlepool 1 in 2021, suggesting it had confidence in the stations’ economic viability.  At that time, wholesale power prices had averaged £45/MWh over the past decade, with little to suggest that power prices were about to soar.

Cumulative lifetime electricity generation from each of the UK’s operating and recently-retired nuclear stations.  The UK also had a fleet of 11 smaller Magnox stations which closed between 1989 and 2015.  Data from EDF Energy.

This raises the question of why the stations are now facing a financial risk from the windfall tax.  Nuclear power stations do not burn expensive gas, and the tax only affects unforeseen profits from ‘excessively high wholesale prices’, rather than the business-as-usual revenues that were expected in 2019.

EDF is facing severe financial difficulties in its home country of France.  They lost €32 billion in revenues last year from reduced nuclear production, higher than had been expected.  Stress corrosion was discovered in many of their reactors in 2021, which combined with other technical problems and the exceptional drought of summer 2022 to leave 32 of their 56 reactors offline in September.  So, a loss of their windfall profits from the UK arm of the business could not come at a worse time.

The construction of Hinkley Point C was originally due to be completed this year.  Its strike price of £117/MWh (in today’s money) seemed expensive at the time (double the average wholesale price of power), but it would now seem like a bargain compared to sky-high natural gas prices.  Construction of the 3.2 GW power station has been beset on all sides by delays, and is currently scheduled for completion by 2027.

Early closure of Hartlepool and Heysham 1 would pose challenges to both the country’s energy security and hitting net zero.  It is likely that their lost generation would be replaced entirely by gas-fired generation – as this can scale up to meet demand as necessary.  This would add around 6 million tonnes of CO₂ to the country’s annual power sector emissions.  Given the current worries around Britain’s energy security, the early loss of these nuclear stations would further exacerbate worries about keeping the lights on over winter, just as electricity demand starts rising with more electric vehicles on our roads and more electric heat pumps heating our homes.

Annual electricity production from nuclear power in Britain, with the range seen across future scenarios from National Grid ESO.