Analysis of UK Nuclear Reactor: Positive and Negative Impacts of the Project

The main aim of this report is to talk about a particular type of reactor implemented at Hinkley Point C.  Discussing the need for such reactors and how the reactor came about. A brief discussion about factors which cause a negative impact on the project and later, have a deeper look into a few specific aspects which cause a positive and negative impact on the project. Based on the evidence provided, determine whether it is a success or failure.

The improved living and welfare conditions have caused the world population to increase and  Electricity has become one of the basic commodities which people solely depend on. The economic growth of a country based on the availability of reliable and stable power supply at a competitive price. In order for a country to grow, developments need to be made in the power sector along with other sectors to see any significant improvement[1].  The reliance on electricity has grown to a point, where the absence of it directly influences the standards of living and is a clear indication by poverty. Due to the growing population, the demand for electricity is exponentially increasing, where the residential sector alone consumes 30% of the electricity produced[2]. Thereby, requiring new developments and innovation in the generation of electricity to meet the load demand. Unlike various large infrastructure projects, setting up a power generating station is more complex and challenging as electricity cannot be stored, whatever is generated is consumed immediately. The load fluctuates on a daily and hourly basis, thereby requiring the generation to constantly vary the output to meet the demand. From the generation to supply, the system follows an intricate network, which provides many job opportunities and is directly linked to the growth of a country. Firstly, this report is going to talk about the importance of the nuclear reactor built at Hinkley Point C, the United Kingdom and later focus different aspects of the project.

The united kingdom aims to reduce carbon emission by 2050 through the climate change act it signed in 2008[3]. It has made significant progress in reducing the use of fossil and relying more on renewables. Wind, solar and hydro are sources used, especially wind, which extended from onshore to offshore wind farms and an increase in installed capacity has contributed a significant share into the overall renewable generation and is shown in figure 1 [4]. Though using renewables as a replacement has proven to be effective, it has a downfall cause completely running the network on renewable would be ineffective as the generation subjected to availability of the source, which makes it uncertain. Thereby, requiring a baseload provided or a constant supply by different sources to make sure demand is met and fault in the system. The nuclear reactor was proposed for this purpose as it produces fewer carbon emissions, meets the load requirements in case renewable could not and another reason is that the UK has a huge stockpile of plutonium which made it favorable than other resources. The Hinley Point C nuclear power station or HPC  was proposed and has an installed capacity 3200MWe produced by two EPR reactors in Somerset, England. With a lifespan of 60 years, it aims to generate 25,000 construction and 900 permanent jobs, at the same time reduce carbon emissions[5].

Figure 1: Total energy production in UK from different sources

The nuclear reactor is spread over 175ha on somerest north coast on Bridgewater bay, it lays adjacent to Hinkley point  A and B. The reactor is constructed near the coast as it would be easy to access water to cool the reactor core down. This is the first reactor built after nearly 20 years and it is one of a kind, where the waste is stored onsite and implementing a new type of reactor called EPR or European Pressurized Water Reactor, which the biggest nuclear reactor built to date. It is estimated to produced 26TWh of energy during the entire operational period and supplies 7% of the load demand as per 2020. The fact which has caught everyone’s attention is that the cost of energy per MWh would be £92.50 for a period of 35 years which is a state subsidy provided by the U.K. government and all this would be done with a budget of £18billion, which is a good deal when compared to the scale of the project. From the time the project was proposed, it was subjected to constant battering from political, economic and so on and criticized it to be a bad idea. The next section is going to looking into few of the failure factor and later focus of various aspects of the project such as finance, risk assessment, and quality control.

On July 2006, starts the search for potential private companies for the construction of the reactor. On September 2007, EDF presented a proposed for constructing the reactor and after nearly 9 years, the project was approved by the government for construction and including the time of proposal, it took nearly 4 decades, which is a long time. It received many negative comments from critics as it is new and untested design and commented that it would not work. The other two reactors of the same type which are being constructed seemed to subjected to delay and cost overruns. It was also commented by Paul Dorfman, from the UCL Energy Institute as a failed and failing project[6]. Initially, there was no subsidy provided for nuclear power and later after some tough negotiation, a subsidiary deal was accepted where the investors and stakeholder bared all the risk during the construction phase of the project and later was guaranteed electricity price after completed, which was a first and most unique planned every proposed. The reactor which was intially proposed to cost around £18billion is under cost overrun by £1.5bn and the delay in the completion of construction[7], where the first reactor was supposed to be delivered by end of 2025 is being delayed by another 15months and consequently, even reactor two which is delay by 9 months following the first one and would not generate until 2027. The other reasons relating to quality control and operation is that it is a flawed and risky design. It is the first type of reactor to be completely computerized during normal operation and during emergencies. But, the system failed on an epic magnitude as it implemented complex softwares which were constantly subjected to errors. Since it is the biggest reactor built to date and due to the complex nature of the reactor. Substandard materials and unskilled labors were used for skilled jobs which affected the quality of the project and constantly subjected to repairs. Due to the delay in completion, the technology would become obsolete by the time it starts operating.

The financial impact:

The final deal was agreed on 29 September 2016 and given to NNB generation company (HPC) Limited (NNBG) which would handle the construction at Hinkley point C. It is a joint venture of Electricite de France (EDF) and China General Nuclear Power Group (CGN), with a ratio of 6:3. In the beginning, no subsidy was provided, but it was provided after four years of negotiation. It was a unique deal as the private company had to control the price and was subjected to inflation when the wholesale price was low. In 2008, the main aim of this project was to complement the renewable supply[8]. But, the generation cost nuclear energy has increased by 91% from when the document was made. In contrast to renewables, where the cost of generation is reduced by 50% the cost of nuclear. Which has caused the government to be more inclined towards renewables and invest in it, which indirectly affects the consumer top-up payments to increase to £30bn from the initially estimated 6bn. This would, in turn, affect the households by adding £10 and £15 annually to their electricity bills which would go towards HPC for a period of 2026 to 2030 and would impact the poverty stricken households. While negotiating, the upper bound limit above with the deal would not remain valid was not estimated, which in turn would cause the price go up to £21 and £24 added to their bills, if low-carbon emitting generation sources would replace it. The department justified for not negotiating the upper bound by stating the top-up payments would be compensated by reducing in the wholesale electricity price, which makes sure that there is no fluctuation in price and people affected by it would be given some discount scheme. The project started losing it relevance as it would be effective and reliable to look in an alternative type of new technology such as small modular reactors, which is more compact and is not constrained by location. Interested is shown towards power storage technology, which solves one of the biggest disadvantages of renewables.

Risk allocation:

Since the project is using a new technology and was not implemented elsewhere. The department chose it to be completely private funded, with no public subsidy, as the intention was to protect the taxpayers and consumers from the effect of an increase in the cost of construction. Which proved to be a right move as the general public were exempted by baring the expenses when the project saw cost overrun. If the alternate approach was taken where the government supported by public-private funding instead of the private companies completely baring the expense and would be liable for any delay and increase in expenses. The cost of top-up payment would two £69.50. In conclusion, it was observed that irrespective of the decision chosen by the government, the general public would be affected by it.

 The project at Hinkley point c was subjected to delay because it was the first generator with that level of magnitude. The other reactors of the same type which were constructed in China, Finland, and France were subjected to delay and overrun cost. Since, it follows the same principle as a pressurized water reactor, which follows a similar principle as EPR, extensive research was conducted to learn the mistakes and rectify them.

When Uk decided to part away from the European Union, it also decided to part from Euratom, a European atomic energy regulation, which presently regulates the power reactor. It intends to continue the same relationship through the international atomic energy agency and would not consider terminating the relationship completely as it would affect the project and leading to taxpayers held responsible for an incompleted project.

The government requested prior indication of any delay in the commissioning as the government would enter into a capacity market auction market and would a future derivative with the consumer and if the power plant failed to inform the government in time regarding delays, it would result in running a short-term auctions, where the small amount of power is bought at a higher price and it also tends to utilize Low Carbon Contracts Company (LCCC)  to oversee any delay, so that appropriate action can be taken.

Quality Control and Management:

The sheer scale, magnitude, and technology of the reactor made it a vulnerable target. It is the first type of reactors which is completely computerized to control and operate the reactor during normal and accidents. But, this system proved to be a complete failure as it failed to oblige the base rules of nuclear safety and implemented various softwares which caused numerous errors and unintended operations. The backup diesel generators used to cool the reactors are small and not capable to deal during a blackout causing the fuel rods to melt and damage the core. Since the project was out of the budget and delayed, concerned were cut with the quality of materials. The use of substandard concrete and was applied improperly[9]. Using unauthorized documents and blueprints, using inexperienced workers and unskilled laborers to perform high-level skilled work. It lead to design the steel liner and containment units with leaks causing radiation leaking while it was tested on other reactors. Since the reactor can accommodate more fuel and produce more energy, it also produces a huge amount of waste which is more dangerous and can cause more damage to humans than the existing ones. This was not taken into account while designing the fuel containment unit.

Though the technology has proven to help in low-carbon emission, it would decades from design to operation and irrespective of how many reactors have used the contribution it provide to for global would be minuscule, but the cost to set up such reactor would just increase and is shown by the figures  2 and 3.

                    Figure 2:  Cost of energy from different sources (2015)

Figure 2: number of years required to build generators (2015)

Due to the delays faced by the project, generation is not expected to start till 2023. It is indirectly affecting the development of renewable sources as funding and spare grid capacity which is reserved for HPC. The unceratinity of the

Conclusion:

The main objective of this project  is to meet the future load demand, act as baseload for intermitted generation and reduce carbon emission. But, due to the nature and size of the project. It does not seem to be effective. Various measures were taken in finance and risk management to make sure the project succeed but, it proved to be ineffective. Although there were factors which created a positive impact, the downfalls outweighed them, making it a project with too many faults in it.

References:

[1] satpathy, D. (2015). IRJMST. international research journal of management science and technology, pp.41-45.

[2]  Smartcitiesdive.com. (2018). How Smart Building Technology is Shaping the Future of Commercial Real Estate | Smart Cities Dive. [online] Available at: https://www.smartcitiesdive.com/ex/sustainablecitiescollective/how-smart-building-technology-shaping-future-commercial-real-estate/1171355/.

[3] National Audit Office Nuclear power in the UK. The, 2016, pp. 1-44.

[4] TIMPERLEY, J. (2018). Six charts show mixed progress for UK renewables. [online] Carbon Brief. Available at: https://www.carbonbrief.org/six-charts-show-mixed-progress-for-uk-renewables

[5] Power Technology | Energy News and Market Analysis. (2018). Hinkley Point C Nuclear Power Station – Power Technology | Energy News and Market Analysis. [online] Available at: https://www.power-technology.com/projects/hinkley-point-c-nuclear-power-station/

[6] Watt, H. (2018). Hinkley Point: the ‘dreadful deal’ behind the world’s most expensive power plant. [online] the Guardian. Available at: https://www.theguardian.com/news/2017/dec/21/hinkley-point-c-dreadful-deal-behind-worlds-most-expensive-power-plant

[7] Vaughan, A. (2018). Hinkley Point C is £1.5bn over budget and a year behind schedule, EDF admits. [online] the Guardian. Available at: https://www.theguardian.com/uk-news/2017/jul/03/hinkley-point-c-is-22bn-over-budget-and-a-year-behind-schedule-edf-admits

[8] authority of the House of Commons (2017). House of Commons Committee of Public Accounts: hinkley point C. Third Report of Session 2017–19. [online] Available at: https://publications.parliament.uk/pa/cm201719/cmselect/cmpubacc/393/393.pdf

[9] L. Myllyvirta, “The EPR nuclear reactor : A dangerous waste of time and money”, Greenpeace International, Amsterdam, 2012