£200m Nuclear Sector Deal announced; days after Tidal Lagoon rejected

Posted on 29 Jun 2018 by Maddy White

A £200m Nuclear Sector Deal set to drive down the costs of nuclear energy has been announced by the government, just days after it rejected plans to build the £1.3bn Swansea Bay Tidal Lagoon on grounds of cost.

Tidal Power - Swansea Bay Tidal Lagoon is the pathfinder project for UK and international tidal lagoons at full-scale – shown here is an artist’s impression of the lagoon wall
Swansea Bay Tidal Lagoon was rejected by the government earlier this week.

On top of the £200m Nuclear Sector Deal, a £40m facility will also be developed in North Wales by the UK and Welsh governments, to advance the design of advanced nuclear technologies.

Nuclear Sector Deal

The deal seeks to ensure that the UK continues to power British homes through innovation, new technologies and promoting a diverse and skilled workforce in the nuclear sector.

Business and Energy Secretary Greg Clark, said of the Nuclear Sector Deal: “The UK is the home of civil nuclear technology and with this investment in innovation and our commitment to increasing diversity in an already highly-skilled workforce, I want to ensure we remain the world leader.

“This Sector Deal marks an important moment for the government and industry to work collectively to deliver the modern Industrial Strategy, drive clean growth and ensure civil nuclear remains an important part of the UK’s energy future.”

Proposed initiatives:

  • £32m boost from government and industry to kick-start new advanced manufacturing programmes, including R&D investment to develop potential world-leading nuclear technologies like “advanced modular reactors”.
  • To commit to increase gender diversity in the civil nuclear workforce, with a goal of 40% women in nuclear by 2030.
  • A new review to look at ways to accelerate the clean-up of nuclear ‘legacy’ sites.

The nuclear deal follows the government’s recent plans that it will start negotiations with Hitachi over the £12bn Wylfa Newydd nuclear plant in Wales; work is projected to begin on the power plant in the mid-2020s.

Two days prior to the nuclear deal, however (25 June), the government rejected the £1.3bn Swansea Bay Tidal Lagoon projectbecause of its lack of “value for money” despite its potential benefits. 

Nuclear vs tidal

The tidal lagoon could’ve been the world’s first tidal lagoon power plant, so comparing it to nuclear energy – of which the UK has much more experience – is difficult, but the potential benefits it could’ve brought cannot be ignored.

The cost to UK households annually from the project was just estimated at 20-30p.
The cost to UK households annually from the Swansea Bay Tidal Lagoon project was estimated at just 20-30 pence.

Swansea Bay Tidal Lagoon was reportedly going to be able to generate power for 155,000 homes over the next 120 years, with the cost to UK households annually from the project estimated at just 20-30 pence.

In a response to the lagoon rejection, Chair of Swansea Bay Tidal Lagoon, Keith Clarke said that the decision made a “mockery” of the government’s Industrial Strategy; comparatively, the Nuclear Sector Deal announcement was made as part of the Industrial Strategy.  

The lagoon was set to see an investment of £316m into the Welsh economy in the first year of the build and £76m every operational year after; Wylfa Newdd states on their website that “local investment [would be] in the region of up to £200m.”

The power plant is set to create 850 permanent jobs, which Horizon Nuclear Power – the company behind Wylfa Newydd and a subsidiary of Hitachi – explain will mostly be held by people living in Anglesey.

This they expect will bring “nearly £20m to be invested into the Anglesey economy each year through these wages.”

Andrew Storer, chief executive officer of the Nuclear Advanced Manufacturing Research Centre (AMRC), said on the impact of nuclear on manufacturing: “This deal will benefit manufacturers in all parts of the nuclear supply chain, and maximise the economic opportunity from clean growth.

“It will support innovation and technology transfer between sectors, helping companies increase their productivity and competitiveness, and reduce barriers to entry for manufacturers moving into nuclear from other sectors such as oil & gas or marine engineering.”

Hinkley power station designers are being sued for delays to another project.
Hinkley Point C’s total spend is expected to be more than £20bn.

Wylfa Newydd and Hinkley Point C progress

Wylfa Newdd expectedly backed the nuclear deal, Duncan Hawthorne, CEO of Horizon Nuclear Power said in a statement: “We’re delighted to welcome this Nuclear Sector Deal.

“It’s a clear demonstration of how government and industry will work together to ensure nuclear continues to play a crucial role in providing clean, secure power for the UK, as well as delivering jobs, skills and investment across the country.”

Hinkley point C, located in Somerset, is the first nuclear power plant to be developed in the UK for over two decades and this could be compared to the tidal lagoon, despite its total spend currently over £20bn. 

The tidal lagoon could’ve been a highly effective way of generating power, and the project could’ve created a ripple affect to other potential lagoon sites both nationally and internationally.

Mark Shorrock, founder and chief executive, Tidal Lagoon Power said on Hinkley Point C: “The like-for-like comparison is that both Swansea and Hinkley Point C need a contract of £92.5 [per megawatt hour] for 35 years, combined with other forms of government support.  

“He [Greg Clark] says Swansea Bay Tidal Lagoon will cost three-times nuclear. This is incorrect. Swansea Bay Tidal Lagoon will add just 30 pence to consumers’ bills whereas Hinkley Point C will add £12 or more to bills.”

He added on the difference between the two: “The difference is that one is a small bet on a homegrown and reliable energy future with minimal impact on consumers (30 pence a year on bills), the other is a massive gamble with energy security to the advantage of foreign companies and at huge cost to consumers (up to £15 a year on bills).

Read the full statement from tidal lagoon bosses Shorrock and Clarke.