Nuclear or Renewables: What’s the UK’s Future?

Nuclear Power

Can We Afford Not to Have Nuclear Power?

The fight against climate change demands bold solutions, and few are as contentious or consequential as nuclear power. As we aim to decarbonise our energy systems, nuclear’s role in delivering low-carbon electricity remains both promising and divisive. But beyond the headlines, what does nuclear power truly cost, and can we afford not to include it in our energy future?

Nuclear Power: The Need to Decarbonise Energy

Global energy systems are at a crossroads. To achieve net-zero emissions by 2050, the world must transition away from fossil fuels, which currently account for the majority of global energy-related carbon emissions. While renewables like wind and solar have made great strides, they cannot yet provide consistent, 24/7 electricity on their own. This is where nuclear power enters the picture: a reliable, low-carbon technology capable of providing base load electricity that complements variable renewable generation. But its promise comes with a hefty price tag that increasingly raises questions about its viability.

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Nuclear Power: What Does It Cost?

Build Costs
Large-scale nuclear projects are notoriously expensive. Take Hinkley Point C as an example: its projected cost has ballooned to £31-34 billion, making it one of the most expensive energy projects in UK history. In contrast, the cost of offshore wind projects continues to decline, with recent strike prices as low as £54/MWh—a quarter of Hinkley Point C’s projected average strike price of £190.81/MWh. This raises the critical question: why is nuclear becoming more expensive while renewables are getting cheaper?

Decommissioning Costs
Nuclear plants face significant end-of-life costs, divided into several categories:

• Site Decommissioning: Dismantling the physical infrastructure is estimated to cost between £3.4 billion and £9 billion for European Pressurised Reactors (EPRs) like Hinkley Point C.
• Waste Management: High-level radioactive waste requires long-term storage in geological disposal facilities, with interim storage adding to the expense. Total waste management costs for Hinkley Point C could exceed £4 billion.
• Insurance Costs: While operators must carry their own insurance, governments often act as backstops for catastrophic risks. Japan’s Fukushima disaster highlights this burden, with cleanup costs exceeding $200 billion, much of it borne by taxpayers.

These costs underline a stark reality: nuclear is not only expensive to build but also costly to retire, with the financial burden often falling on future generations.

Price Per kWh Delivered
Hinkley Point C’s Contract for Difference (CfD) guarantees a strike price of £190.81/MWh on average over its 35-year CFD (adjusted for inflation). It has an operational life of 60years. This is nearly four times the strike price of recent offshore wind projects and significantly higher than onshore wind (£51/MWh). While nuclear offers reliability, its high price tag forces us to question whether the same investment could deliver more cost-effective carbon reductions through renewables and storage.

Comparing Nuclear to Other Technologies

Experience Curves

Renewable technologies like wind, solar, and batteries have benefited from steep experience curves, with costs dropping dramatically as deployment scales up. For example, the cost of offshore wind has fallen by over 50% in the past decade. In contrast, nuclear costs have risen, driven by complexity, regulatory hurdles, and project delays. The disparity is clear: the more renewables we build, the cheaper they get, while the opposite seems true for nuclear.

Capacity Factor

Nuclear power boasts a high capacity factor of around 90%, meaning it operates at near-full capacity most of the time. In contrast, offshore wind averages 45-50%, and solar struggles at 10-20%. While this reliability is a key strength, it comes at a cost that may no longer justify the investment, especially as energy storage technologies improve.

Resilience: Strengths and Weaknesses

Nuclear’s strength lies in its ability to deliver nearly always-on power, making it a cornerstone of grid stability. However, when nuclear plants go offline, the impact can be severe due to their large size. For instance, if Hinkley Point C (3.2 GW capacity) were to experience an unplanned outage, it would create a significant gap in the UK’s energy supply that would need to be filled by backup generation or imports.
In contrast, renewables’ distributed nature makes their outages less impactful. A single wind turbine failing has negligible effect compared to a nuclear plant going offline. Moreover, as battery storage and grid flexibility improve, renewables are becoming more capable of handling variability and outages. This raises the question: is nuclear’s resilience advantage as strong as it once was

The Case for a Balanced Energy Mix

While nuclear power comes with high costs and risks, it also provides unparalleled reliability and low-carbon energy. However, its economic case is increasingly being challenged by the rapid advancements and cost reductions in renewables and storage technologies. To transition to a decarbonised energy future, the UK must embrace a balanced approach: investing in nuclear only where necessary and prioritising renewables and grid innovations to deliver more affordable and sustainable energy.

Can We Afford Not to Have Nuclear?

The costs of nuclear power are significant, and its economic viability is increasingly under scrutiny. With its ability to deliver consistent, low-carbon electricity, nuclear remains a critical piece of the puzzle but only in limited roles where its strengths outweigh its costs. As renewables continue to become cheaper and more efficient, the future of energy may demand that we rethink the balance of our investments. The question isn’t just whether we can afford nuclear power, but whether we can afford to prioritise it over cheaper, more scalable solutions.

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Author: Jim Laidlaw, CEO & Founder at Boxergy

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