The government will unveil a package of measures to support the nuclear industry later this week, including a rescue deal for Moorside and up to £100 million of funding for small-modular reactors, according to reports.
Industry sources told Telegraph the sector deal would be the “most ambitious and complex” so far, with ministers hoping to slash nuclear construction costs by between 20 and 30 per cent.
Assistance for Moorside is expected to be revealed alongside an announcement from Korea Electric Power Corporation (Kepco) that it will purchase a stake in the development consortium NuGen.
The future of the project was thrown into doubt at the beginning of the year after Toshiba, the senior partner in the consortium, revealed it was facing a financial meltdown.
It was partly caused by a multi-billion pound write-down on its US nuclear arm, Westinghouse, which was due to supply the reactors for Moorside but filed for bankruptcy in March. Toshiba was left hunting for new investors after Engie, the junior partner in the consortium, jumped ship several days later.
Kepco initially entered talks about joining NuGen more than three years ago but failed to strike a deal with Toshiba. The talks reportedly resumed in September and are understood to have reached a more successful conclusion this time around after the government pledged to provide support for Moorside.
Meanwhile, the Guardian has reported that energy minister Richard Harrington is expected to announce up to £100 million of funding to support the development of small modular reactors (SMRs) on Thursday (7 December) – the day he is due to appear at the Nuclear Industry Association’s (NIA) annual conference.
The government was originally scheduled to publish the results of a competition to find the best value SMR design for the UK in autumn last year. But this is yet to happen.
“They have blown a bit hot and cold on SMRs,” an industry source told the paper. “There’s a sense that if we’re going to be part of this, we need to get on with it quite quickly.”
Another said the funding may be too little to make a difference to the development of SMRs, adding: “It’s a pretty half-hearted, incredibly British, not-quite-good-enough approach.”
The Telegraph reported in September that a consortium led by Rolls-Royce will be one of the beneficiaries of the funding, while the developers of integral reactors, such as the US firm NuScale, will miss out.
A Whitehall source told the paper a techno-economic assessment of SMRs had concluded integral reactors were not commercially viable.
Responding to the latest reports, New Nuclear Watch Europe chairman Tim Yeo, said: “It’s now or never if Britain wants to be a leader in the global nuclear energy industry.
“There’s no better opportunity for ministers to show they are serious about the industrial strategy than by reviving Britain’s nuclear role.
“Firstly, they should clinch the future of the NuGen project by offering Kepco loan finance at the lower interest rate available to the government, at least for the period of construction of the new reactor at Moorside.
“Secondly, they should seize the chance for Britain to compete in the emerging small modular reactor industry by exploiting the country’s undoubted scientific and engineering skills.”
Earlier today (4 December) the NIA published a report carried out by Oxford Economics, which found the sector added £6.4 billion to the UK economy in 2016.