How serious is the Government on nuclear reform?

Britain Remade’s analysis of the Government’s response to the Fingleton Review

Is there a better time to announce a package of radical measures to make it cheaper and faster to build new nuclear power stations than a week into an oil and gas crisis? France’s response to the 1973 OPEC crisis was to build 40 reactors in a decade. It was a decision vindicated by future energy crises. When British bills jumped in the wake of Russia’s invasion of Ukraine, France was able to keep prices rises to a fraction due to the 57 reactors on their grid. Indeed, France’s choice didn’t just protect French billpayers, it also cut the amount of expensive gas its neighbours Germany, Italy, and Spain had to burn.

In Hinkley Point C and Sizewell C, Britain is building more new nuclear power plants than most countries. Yet, Hinkley Point C is set to be the most expensive nuclear power plant ever built. More than 75% more expensive than France’s, in theory identical, Flamanville C. Sizewell C will be cheaper, but not by much. And both projects are massively behind schedule. If we want to build our way out of dependence on fossil fuels, then we need to cut costs and speed things up.

The Government tasked ex-competition enforcer John Fingleton and a team of experts to come up with a plan to fix the way Britain regulates nuclear power. They set out radical reforms targeting everything from the way reactor designs are approved to the habitats regulations that force companies like EDF to spend the best part of a billion saving a trawler’s annual take of fish. Many of the suggestions mirrored ones we called for in our Policy Playbook for Cheaper Nuclear. They promised a radical reset and they delivered.

Of course, it’s not enough to just have the answers. We need politicians to have the courage to implement them. And let’s face it, this Government has a track-record of U-turning when the going gets tough. To its credit, the Government gave a full-throated endorsement of the review, with Starmer suggesting the entire economy should be subject to similar scrutiny. Yet their wording, “we agree with each and every recommendation in principle” gave wiggle room.

In the past few months, nature NGOs have mounted an aggressive campaign to discredit the report. They claimed that some of the review’s stats and facts, such as the claim Hinkley Point C spent £700m on fish protection measures, were essentially made up. This, to be clear, was entirely untrue. (For a claim-by-claim rebuttal, click here.) There was also a letter signed by a number of prominent leftwing backbench MPs and peers calling for some of the key nature measures to be scrapped. In anticipation of this, we organised our own letter, signed by leading figures from academia, business and politics, urging the government not to U-turn.

After months of waiting, we finally have the Government’s full plan to implement the Fingleton Review. Is it implementation in full, or have they given in to the green NGOs? Here’s Britain Remade’s assessment.

This is a massive step forward for nuclear power in Britain. It is nothing short of a complete transformation of the way Britain regulates the design of nuclear power stations. It will dramatically speed up and cut costs of building new power plants dramatically curtailing the ability of

We have a new single commission for nuclear to end the absurd situation where nuclear projects have navigate a maze of different quangos. The unscientific semi-urban population density criteria, which if it remained would have greatly held back the rollout of SMRs, will be revised to allow SMRs to be built in a much wider range of locations, including on the site of ex-coal plants. There will also be serious action to get rid of the duplicative requirement for ‘regulatory justification’.

There is a return to proportionality in regulation. Nuclear is the safest and cleanest way to produce power, but current policy forces vendors to redesign reactors in the pursuit of miniscule reductions (e.g. one banana’s worth) in radiation exposure. The way ALARP, the idea that risks be reduced to ‘as low as reasonably practicable’, works will undergo deep reform. There will be a clear steer to regulators over what is (and isn’t) a tolerable risk, while numerical targets on radiation exposure will be reviewed and made proportionate.

This is huge. It is the radical reset of nuclear regulation that we were promised. The era of Hinkley Point C being forced to make thousands of design changes to its French equivalent to comply with ONR regulations is over.

If you told me a couple years ago that not only would the Government commit to this, but also that these reforms would face essentially no opposition, I would have laughed at you. It shows how fast the debate on nuclear has moved.

Yet, as I suspected, this is not implementation in full. On planning reform in particular, some recommendations have been watered down, while one has been dropped altogether. While this is still a big step in the right direction, they could and should have gone further.

Let’s start with the positives on planning. Anti-nuclear activists have, in recent years, had great success in delaying nuclear construction. Hinkley Point C and Sizewell C have faced over a thousand days of delay due to legal challenges. Some, such as the challenge trying to stop Hinkley Point C dumping some mud in a mud dumping site, have caused delays that plausibly increased costs by tens of millions (if not more). Legal challenges on environmental grounds benefit from a ‘costs cap’ that means judges can’t force claimants to pay for the other side’s full legal costs if they’re unsuccessful. The Government’s response commits them to modernise the cost cap regime, though the specific proposals from the review (e.g. special caps for crowdfunded challenges) aren’t mentioned. The Government is also taking forward a sensible idea to indemnify nuclear projects against legal challenges. In other words, EDF will be allowed to crack on with Sizewell C even if they’re still waiting for a legal judgment.

In a show of political courage, the Government is taking action to scrap Michael Gove’s vague ‘national parks’ duty. I suspect the clincher in this debate was as much Fingleton as the fact that legal challenges designed to scupper the planned grid buildout were likely to rely on this duty.

What about the Habitats Regulations that led to £700m being spent on fish protection at Hinkley Point C? It’s a mixed, but still positive, bag. The key changes Britain Remade pushed, such as screening out de minimis impacts, broadening the types of compensation that can be offered (i.e. not just like-for-like), and removing the requirement for a bespoke Habs Regs Assessment for each regulator, are there. However, they plan to deliver the changes through new guidance for regulators, not via legislation. I suspect they will need to revisit this.

The most radical reform in the Fingleton Review on planning was the idea of an alternative route to comply with the Habs Regs. Instead of site-specific surveys, mitigations, and compensation, nuclear developers would instead be able to pay a ‘per-acre’ fee to a nature fund to discharge the obligations. New nuclear will inevitably disturb some habitats, but it is a net good for nature. Not only does nuclear cut climate-change causing carbon emissions, it also uses much less land than other forms of power. A simpler, faster process would be a win-win for nuclear and nature.

Unfortunately, this hasn’t been taken forward in full for energy. Instead, the Government intends to rely on reforms from the recently passed Planning and Infrastructure Act to meet the same goal. Our assessment is that this is unlikely to work and is reliant on Natural England to proactively create ‘Environmental Delivery Plans’ (EDPs) for all of the impacts of nuclear development.

Intriguingly, this reform will be taken forward for defence, which suggests the Government recognise that the Fingleton proposal is more effective. Of course, these days it is hard to separate energy from defence. How can we re-arm to face new threats when heavy-industry pays some of the world’s highest industrial electricity prices.

There are other dilutions. Fingleton called for legislation to create ‘modular low-carbon acceleration zones’. In these areas, nuclear projects would face radically reduced planning barriers. This would be the nuclear equivalent of a Spanish solar reform that led to a rapid rollout of cheap low-carbon solar panels in the wake of the gas crisis. The Government instead has committed to using existing policy tools, including the Planning and Infrastructure Act’s EDPs, to deliver it.

The Government has also opted not to introduce statutory time limits for decisions on permits. Their view is time limits can have perverse consequences, but that other measures can be used to speed up permitting. I hope they are right, but I fear few things will beat a deadline for focusing heads.

Disappointly, they’ve completely rejected the proposal to have community benefits count as material factors in the planning process. In a persuasive blog, Ben Southwood of Works In Progress described this as the Taskforce’s secret weapon. It would have meant that if a nuclear plant (or a wind farm) wanted to give locals who otherwise would object money off their bills, it would be a reason to grant permission. When a wind farm tried this in 2019, they were told that ‘planning permission cannot be bought or sold’ by a top judge. Even though in practice local opinion plays a massive role in whether planning permission is or isn’t granted, the planning system forces us to pretend and act as if all decisions were made completely independent of it on purely rational criteria. As a result, we get developers paying huge sums to directly address local objections about traffic or visual impact (think of burying pylons) when it would be far cheaper (and popular) to pay cash to affected locals. This is a case where eight decades of planning ideology trumps political reality.

***

Make no bones about it. This is a huge step forward for nuclear power in Britain. This isn’t implementation in full, but it is the radical reset the sector needed. The last few weeks are a reminder that reliance on imported fossil fuels carries great risks, yet the recent wind and solar auctions show that simply going hell-for-leather on intermittent renewables won’t deliver the bill reductions voters were promised.

To get bills down, boost industry, and make us energy secure again, it is vital that the Government sticks to their words and follows through on this plan.