Why Boris Johnson has gone nuclear

On Monday morning the Prime Minister hosted two dozen or so nuclear experts and financiers at No 10 for a special high-level summit on how to fire up Britain’s nuclear capacity so that a quarter of our electricity comes from nuclear by 2050. 

They were an illustrious group, and it’s an ambitious target. It’s a target which the Prime Minister – a recent convert to nuclear power as the greenest and most efficient source of energy – wants delivered at “warp speed”.

Like so many born-again converts, Boris Johnson is now pinning Britain’s energy security on nuclear with a religious zeal, taking a similar approach to cake which is that he is pro-having and pro-eating. 

Sitting opposite the PM at the Cabinet table was Dr Tim Stone, chairman of the Nuclear Industry Association which represents more than 250 companies across the supply chain. And if anyone in the UK is responsible for shaping and baking the PM’s nuclear cake, it’s Dr Stone. 

He’s been warning successive governments until he is blue in the face that Britain’s lights are in danger of going out without new energy sources – and that was well before the pandemic which caused such supply chain hiccups, forcing up oil and gas prices, and Russia’s invasion of Ukraine.

Alongside him were other high-fliers from the industry. They included Tom Samson, head of Rolls-Royce mini- nukes, or SMRs as they are known, Tom Mundy, chief executive of NuScale, the US SMR power group, Mark Reynolds of Mace, (who did more than anyone to build the UK’s Olympics site), Andrew Storer, chief executive of Nuclear AMRC, Dawn James, vice-president of US Jacobs Nuclear and, beamed in from the US, Brendan Bechtel, fifth generation family boss of Bechtel, the US engineering giant. 

Other chiefs from Westinghouse – which designs the latest AP1000 reactors and works with Bechtel on nuclear projects – Hitachi, GE in the US, and French nuclear giant, EDF, which is building Hinkley C, were also present. 

Conspicuous by their absence were China’s nuclear bosses. It’s a tricky one: it was Chinese financial support that helped get Hinkley Point, the first new power station in more than two decades, off the ground. In return, the Chinese had also been promised that they would be involved in constructing the Sizewell C in Suffolk, and to install one of their own design at Bradwell. That looks off the menu as ministers are trying to find ways to cut them out of future plants.    

Conspicuous by their presence, though, were the City’s money boys. Legal & General, Aviva, Australia’s Macquarie, the Canada Pension Plan Investment Board and Rothesay Life all sent representatives, all of whom are said to be interested in investing through the new RAB model, otherwise known as the regulated asset base. “There is no shortage of money,” said one source at the meeting.

This is a significant advance: having the City on side is hugely important to building new nuclear as one of the main reasons so many earlier plans for new power plants at Wylfa in Wales and Moorside in Cumbria have collapsed or fallen by the wayside has been the difficulty in getting finance from the private sector for such long-term projects without government support.  

Flanking Johnson at the table were Kwasi Kwarteng, business secretary, Steve Barclay, Cabinet Secretary, and Helen Whateley, exchequer secretary to the Treasury as well as a number of Whitehall officials keeping tabs on the numbers. So too was Oxford economist Dieter Helm, energy expert and consultant, and no doubt brought in to help out with the costs as the figures are mind-boggling. 

You can do the sums. It usually takes at least ten years to build a nuclear plant at an average cost of £20 billion. Building just 20% of required capacity by 2050 of 250GW will require between 50 and 60 new reactors. In total, Johnson’ new target means 20 new power stations with the capacity of Sizewell B in Suffolk or eight with the output of the new Hinkley Point C as well as a fleet of cheaper and more quickly built mini-nukes. 

I mention the names of so many of the top quality nuclear specialists and financiers who attended the Cabinet meeting because it’s clear by their interest that Johnson and his team are now deadly serious about building new nuclear power at scale – and hopefully at speed.

As Dr Stone reminds us, there are only five sources of low-carbon energy – nuclear, solar, hydro, wind and hydrogen which is made from natural gas and then burying the CO2 by-product back in the ground. As we know from the science, the technology is not yet available to get scale from either solar or wind – which also need back-up when weather conditions are not right. 

That leaves nuclear as the optimum source of a reliable, base load supply of low-carbon energy while other technologies are being developed.

It’s also clear from their presence that Johnson – and most of his ministers – are in a state of shock. What’s more, they obviously now accept that whatever colour the power source – whether it be blue, red or green – they have to move swiftly as demand is set to double over the next few decades as the need for more power for electric cars and new heat pumps soars. Ironic, yet this is the harsh reality. 

After years of warnings, they finally recognise that after decades of muddled strategy and neglect, building nuclear power at scale is the only way to keep the lights on long-term. At present, nuclear provides about 16% of the UK’s daily electricity needs but that will disappear over the next few years as the fleet is run-down. Indeed, the industry has been so neglected that only one of the UK’s existing sites will still be making power by the end of this decade. Replacing all the other fossil fuels will mean a lot more electricity and a lot more nuclear in any sensibly balanced mix.

Johnson gets it, even showing off his knowledge of how the atom was split at the meeting. As one source reported, the PM told the assembled experts that he blamed a “chronic absence” of leadership by successive British governments on nuclear energy: one can only assume that includes the last 12 years of Tory leadership too. He added the UK had been “left for dead” by other countries, such as France, where nuclear powers more than 70% of its electric needs. That must have hurt him. 

Now he needs to follow suit, to ensure that Britain has energy security and sovereignty over as much of its energy supplies as it reasonably can. In other words, taking back control.

What will it take? How is the nuclear cake to get baked? Well, according to sources present at the summit, what the industry wants from the government if it is to commit to building in the UK – or finance these projects – is confidence that this time the government means what it says. 

For example, global players like Westinghouse and Bechtel have a long pipeline of projects, with big opportunities to build power plants in Poland and the Czech Republic so would need time to organise their schedules. 

Industrialists also want to see the new 25% target set out in the government’s energy security strategy paper due to be published next week. What would cheer them up even more is if the government were to firm up the idea of establishing a state-owned nuclear power company which could take small stakes in the new plants. That would be the best way of showing confidence and commitment. 

The Treasury also needs to move swiftly to look at changing some of the Solvency 2 rules – which it now can do because of Brexit – to make it easier for pension funds and insurers to invest in the RAB model which should give them more certainty on returns from their investments. The new legislation on the government-backed RAB funding is due to go through Parliament next month.

All these conditions are within the government’s remit. But will ministers – and officials – be able to move fast enough? Many in the industry are doubtful, certainly based on past experience. And speed is of the essence. Some of the bigger players are ready to get going immediately like the Westinghouse and Bechtel consortium which is waiting impatiently to develop the Wylfa site in North Wales. They have been approved but are still waiting for the £20 million agreed development costs to be paid under the Future Nuclear Enabling Fund which has reportedly been signed off. But Kwarteng at BEIS has yet to release the money. 

What industry would like to see most of all is a big hitter put in charge of a new nuclear taskforce – rather like the Vaccine Taskforce – someone from the private sector, not government, who understands big infrastructure projects, can get them on the ground and knock heads together. It doesn’t need a Kate Bingham – as the resources are there – but someone who can bring it together like her deputy, Clive Dix, who deployed those resources. The ingredients are ready to be mixed.