UK | SPECIAL REPORT


The UK’s recently published green financing framework, which explicitly excluded nuclear, was seen as sending mixed messages


necessary to make nuclear an ‘investable asset class’ and it had to solve the ‘ESG problem’ – ie meeting ‘environmental, social and governance’ levels. She said ESG investing was a data collection, metrics and reporting issue for financiers who need to report against those metrics, she said. She warned that the metrics used were not currently


consistent or standardised. Nevertheless, nuclear should be able to report against ESG as with any energy project, because “all energy projects have an impact that needs to be assessed”. Such metrics would allow financiers and industry “ to show nuclear as an asset class to its board or its investment committee”. With metrics in place “the obligation is on you” as a nuclear industry to report well against them, she said. Murphy agreed that without an ESG case, much else about the investment “will be irrelevant”. The UK’s recently published green financing framework


(for issuing sovereign bonds), which explicitly excluded nuclear, was seen as sending mixed messages: excluding nuclear from green financing while asking investors to commit capital to future projects. Also speaking at WNA, Nick Stansbury, head of climate solutions at investment managers LGIM, had a direct challenge for the nuclear industry. Giving his view, he offered ten ‘truths’ as seen by the investment industry, staring by laying out the climate issue: climate change is a ‘big deal’ for finance markets and in the near term; fixing it is hard because energy, the ‘engine of the world economy’ had to be rebuilt in 30 years; each year’s delay could add a trillion dollars to the bill; nuclear should and can play a ‘very meaningful role’. Other ‘truths’ were that nuclear is safe; it is reliable; it is cheap – but only in some jurisdictions and ‘no-one can explain why the cost structure in developed economies has been allowed to rise so dramatically’; and credible sources say that without nuclear solving the climate crisis will be very expensive. However, his final truths were that on average across the globe three fifths of people oppose nuclear, and that “investors can’t fix these problems and there is no evidence that the nuclear industry is particularly galvanised to do anything about it”. Insisting that “the problem is not one of financing”


(although he said there were “complicated questions” around that), he said “what are you [the industry] doing about it?” He mentioned funding for research, convincing NGOs and other initiatives. But fundamentally he said the industry had to inspire confidence and that suggestions that the only way to find plant was to transfer all construction risk to governments and consumers “does not fill me with great confidence”. The industry had to be able to deliver plant on time and on budget: “are you willing to put your own money at risk and your CEO bonus?” ■


Fuel concerns as Springfields winds down


The UK’s nuclear new-build programme was also highlighted as concerns over the winding down of operations at Westinghouse’s Springfields fuel manufacturing facility were raised in Parliament. Unions and local MPs have raised fears over the loss of jobs and skills at the site after EDF Energy said last year that it would bring forward closure of the Hunterston nuclear station to January 2022 and that Dungeness B will move into defueling. The Prospect union also warned of “significant and credible risk that other EDF AGR nuclear stations will follow suit”. It warned that the loss of fuel manufacturing for those reactors would have “have a devastating impact on the UK nuclear fuel supply chain, the UK’s energy security and its indigenous nuclear fuel manufacturing capacity”. Gail Cartmail, assistant general secretary at the site‘s other union, Unite, said: “Springfields is the only site in the UK capable of fulfilling the country’s nuclear fuel requirements. If the nation is to have an independent and secure supply of nuclear energy, government must ensure that Springfields and the countless specialist jobs that depend on it are supported” As local MPs discussed the site’s future, in a debate held outside the main


parliamentary chamber, the GB electricity market was struggling with spiking gas prices and low wind speeds, and the UK electricity system operator called for a coal-fired plant to be started up to meet demand for the first time in 2021. The debate served to raise the issue ahead of expected new nuclear funding policy but was not a formal part of policymaking. MPs pointed out that Springfields supported more than 800 workers and


thousands of other direct and indirect jobs, and was a key part of the ‘northwest nuclear arc’. It had trained 2000 apprentices since opening 70 years ago and had manufactured fuel providing the equivalent of 20 years of UK energy consumption. The MPs expressed concerns about the drop off in orders and “more


worryingly the irreplaceable loss of skills”. It emerged that 70% of the site’s income was due to AGR fuel supply and as manufacture may now end in 2023 they said this was “Urgent — not a situation for retrospective action”. The loss of skills is critical and they had to be maintained if the UK wants


to be a new nuclear leader, especially if it wants to have a leading role in small modular reactor (SMR) provision. In looking for new sources of income for Springfields, MPs suggested that


government should: ● Seek promises from SMR investors – who expect government support to build the industry — that they would manufacture fuel in the UK.


● Make possible the transfer of existing Westinghouse contracts to Springfields. MPs said the minister must have discussions with EDF and its fellow investors about moving contracts to UK. MPs said that Westinghouse or Framatome fuel could be manufactured in the UK under licence, without major renegotiation of Westinghouse contracts.


● Write a requirement for UK fuel into contracts for new plants, a provision that EDF was said to be “open to”.


The MPs said there were opportunities on the horizon but they would require government backing and a commitment both to new reactors – especially Sizewell C — and the industry future over the next 60 years including reprocessed uranium fuels. They said” “Decisive action is needed as soon as possible to save a strategic national asset”, pointing out that the government recently took such action on another nuclear company, Sheffield Forgemasters. And they said that the site’s “Ultimate parent [organisatipn] has uncertain intentions at best, so policy needs to move at pace.” ■


www.neimagazine.com | October 2021 | 15


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