Britain prepares to go all-in on nuclear power — after years of dither

LONDON — Philip Hunt, the unassuming Labour peer put in charge of rejuvenating U.K. nuclear energy, has a favorite joke about how slowly the industry moves.

Hunt — who was first an energy minister from 2008-2010 and retired from his second stint in government just last month — liked to roll out the gag at Westminster receptions, according to one industry figure who saw him in action.

“I came back after 14 years,” the minister would say, “and everything was exactly as I left it.”

It was a way to bash the Conservatives’ decade-and-a-half in power, but also an admission of the glacial pace of the nuclear world.

That is about to change. Ministers are prepping a series of high-profile nuclear announcements in the lead-up to the government-wide spending review on June 11.

The government is expected to unveil, after months of delay, the winner of a multi-billion pound contract to build next-generation small modular reactors (SMRs), known as “mini nukes.” A long-awaited financial decision on the mega nuclear plant Sizewell C in Suffolk is on its way. Meanwhile, U.K. officials are discussing buying up nuclear sites from private ownership to bring the industry under greater state control.

It would trigger more activity on nuclear over a handful of weeks than there has been in a generation.

This flurry of action is coming, insiders say, not because of astute maneuvering by Hunt or his political bosses but because the Treasury — long skeptical about nuclear — has run out of road for ignoring the problem.

The looming spending review, the last chance in this parliament to commit cash to the U.K.’s neglected nuclear energy system, “has forced the government’s hand,” said a second energy figure, granted anonymity, like others in this piece, to speak candidly about government planning. 

Worried about the splurge

Bringing more low-carbon nuclear power online is crucial to two of Prime Minister Keir Starmer’s “missions” in government — galvanizing sluggish economic growth and ending the U.K.’s reliance on high-polluting fossil fuels.

Backing more nuclear power in a speech in February, Starmer said he was taking on “the blockers who have strangled our chances of cheaper energy, growth and jobs for far too long.”

The industry has its vocal supporters on Labour’s benches, too. “We urgently need new nuclear in this country, not just for the energy security but for the jobs and the growth opportunities, too,” said Charlotte Nichols, MP for the red wall seat Warrington North. Tom Greatrex, an ex-Labour MP who now heads the Nuclear Industry Association lobby group, said: “The time for talking is over. We need to see decisions being made.”

In truth, Starmer doesn’t have much of a choice. Five nuclear power plants currently meet 15 percent of the U.K.’s energy demands, but most of that generation is set to power down by 2030. 

The urgency suddenly felt by Starmer isn’t lost on other Labour big hitters. Former Prime Minister Tony Blair last month called for a “renaissance of nuclear power,” focused on a rapid rollout of SMRs. 

Building up nuclear power is a vast undertaking. Two plants — Hinkley Point C and its proposed sister development Sizewell C — could each deliver enough energy for six million homes.

The costs involved are seismic. Hinkley Point C's budget has ballooned from £18 billion to £46 billion. It is six years behind schedule.

It’s the sort of data that makes Treasury officials wary.

Said a former minister of nuclear: “Individual ministers [are] very helpful. Officials [are] actively hostile.”

“The Treasury has always been skeptical of nuclear because it costs so much,” said one former senior Whitehall official bluntly. 

“I think I would summarize the Treasury's view [of nuclear investment] as: risk,” agreed Adam Bell, director at the Stonehaven consultancy and formerly head of energy at the old Department for Business, Energy and Industrial Strategy.

“Essentially, every conversation was about the relative risk exposure of investment in nuclear, with very little emphasis on the upside,” he said. That is useful for ensuring ministers “don't simply splurge all of our money on nuclear — but there was much less of a sense of the strategic role of government in the sector.”

A former senior Treasury official insisted their old department is not dead set against nuclear. 

But the combination of its “bad track record on delivery and spiraling costs,” and the need to “find the fiscal headroom to score it in the government accounts,” made it a tough sell for politicians forced to trade off new nuclear power plants — which won't generate power for more than 10 years — against the need for voter-friendly hospitals and schools, they said.

Under-powered

The Treasury declined to comment for this article. But Energy Secretary Ed Miliband has tried, in part, to promote that nuclear upside.

“If you want to build a nuclear project in Britain, my door is open,” he told industry lobbyists late last year. “My department is listening.”

But there are doubts he and his DESNZ colleagues have been listening closely enough.

Miliband met Simon Bowen, the U.K.’s top nuclear official, just once in the five months after Labour came to power, according to a Freedom of Information release. Over the same period, Miliband met with the leading wind and solar bodies five times.

Unlike for wind and solar, where Labour has set lofty targets as part of cleaning the energy system, there are no goals for nuclear generation.

“The question is whether Ed Miliband is so focused on renewables he can't see nuclear clearly,” said one Labour heavyweight in the House of Lords, granted anonymity to speak about internal party matters.

Miliband’s department rejects any claim he has overlooked nuclear’s role in the energy mix. A government spokesperson said: “We are reversing a legacy of no new nuclear power being delivered, evaluating final bids in the SMR competition, and taking a final decision on whether to proceed with Sizewell C in the spending review.”

Senior officials point to Miliband's liberalizing rules on where nuclear plants can be built as evidence of his commitment to the sector.

The recently-departed nuclear minister Hunt was, meanwhile, “great to work with,” said Julia Pyke, managing director of Sizewell C. “He really understands the importance of nuclear, and is an enthusiastic supporter of our project.” 

But there are concerns that he was shuffled into the role precisely because his portfolio is not a priority for Miliband. 

“Miliband gave Hunt the brief to make his life easier,” claimed a third industry figure, who is familiar with the procurement process for new nuclear power plants, speaking before Hunt left his role. “He’s not a big-hitter. He’s not there to shake things up and make things happen. It’s a safe pair of hands, [someone] who is minding the shop for stuff that is not important.”

Hunt was in situ mainly to deal with the “nutters,” the same person said, referencing the wilder pitches for nuclear power to which the government must sometimes pay lip service. 

“They might let Miliband in the room” for major investment decisions, the person said, “but there’s so much money and diplomatic pressure here, it’s above the pay grade of Miliband and Hunt.”

The government spokesperson said they rejected “this categorically false assessment of Lord Hunt's work in the department.”

They added: “He has worked tirelessly with the nuclear industry as the government puts Britain back in the global race for nuclear energy, helping the U.K. achieve energy security and net zero while supporting thousands of good, skilled jobs.”

DJT, HMT, SMR

As usual in Westminster, there is also the influence of Donald Trump. Nuclear is one way the U.K. government might find desperately-sought common ground with the climate-skeptic U.S. president.

“Issues like nuclear cooperation are issues where we can work together with the U.S.,” Miliband told POLITICO last month. “We might be doing it with a different perspective — but we can work together.”

Trump last weekend announced a series of executive orders aimed at firing up U.S. nuclear power, at the same time tech giants like Google and Microsoft lobby on both sides of the Atlantic for government-backed SMRs to help run their energy-scoffing data centers.

One litmus test of the Treasury’s approach will be how many firms are awarded an SMR contract, amid fears officials will ultimately plump for a single winner. “I think everybody on the inside knows that it should be two SMR winners. And that would include Lord Hunt, it would include the department, [and] probably the Treasury when they're being honest,” said the second energy figure quoted above.

But ultimately, said the same person, the Treasury has no choice but to act. ⁠

“It’s a coincidence of two factors — Sizewell C and SMRs — and one event: the spending review,” they said. In a few weeks' time, the government lays out its spending plans for the next three years. Leave big nuclear decisions any longer, the same person argued, and the Treasury’s financial planning will be wrecked.

⁠”You have to make a decision and clarify Sizewell C. The investment is so big that [if they hold off any longer] the Treasury’s numbers won’t make sense,” they argued.

“There is an urgency [inside the Treasury] to be building new nuclear power, and also an urgency to be building all different kinds of power for energy security supply,” said one union figure who had discussed future nuclear investment with ministers.

The spending review may be the moment urgency replaces inertia. “I think there has to be big announcements to move that forward,” the union figure said.