UK Nuclear Output Slumps to 42-Year Low in Threat to Net Zero

(Bloomberg) -- Power output from the UK’s nuclear power plants slumped to the lowest in more than four decades last year, potentially increasing a reliance on fossil fuels that will make it more difficult to reach the nation’s net zero emissions target. 

Output shrank to about 37 terawatt-hours after two stations closed, dropping below 40 terawatt-hours for the first time since the early 1980s, according to data from the government and the UK unit of Electricite de France SA. With the country’s current fleet of five nuclear plants scheduled to shrink to just three by the end of 2026, Britain needs to map out how it can provide clean back up electricity when renewable output drops.

The UK, which has a target to reach net zero emission by the middle of this century, wants to build as much as 24 gigawatts of new nuclear capacity by that time. The government is due to publish a roadmap on how it intends to achieve that ambitious target. 

But construction takes many years and is often beset by cost overruns and delays. To reach the goal, developers would need to add 16 gigawatts in the next decade at a cost of more than £150 billion ($190 billion), according to estimates from Aurora Energy Research. 

“With revenues materializing around a decade after the Final Investment Decision, this generally makes nuclear a very different investment case to banks compared to other low-carbon generation technologies, one which fewer lenders are willing to consider,” said Ashutosh Padelkar, senior associate at Aurora. “It would be extremely challenging if not impossible to deliver 24 gigawatts of nuclear capacity by 2050 without the government taking most of the burden.”

Britain is also accelerating the build out of offshore wind, targeting a clean power grid by 2035. This will require low carbon options like nuclear to provide back up electricity when it’s not sunny or windy. Most of the current atomic fleet is reaching the end of it’s operating life. EDF has spent about £7.5 billion on life extensions and maintenance since 2009, when it acquired the current fleet. 

EDF’s Hinkley Point C is the first project to be constructed in more than three decades. Startup of its two reactors is due in 2027 and 2028, though the utility has warned that may be pushed back by more than a year.

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