76 Rocío Alvarez-Tinoco et al.
High nuclear costs and limited profit margins
While it has low operational costs, nuclear electricity suffers from high and
often very poorly estimated costs of construction (e.g. Harris et al., 2013). Stakeholders emphasised cost escalation for nuclear reactors and delays in implementation among the main challenges for the sector. High costs for nuclear- based
electricity require substantial incentives and subsidies. Such costs may impact
low- income consumers, potentially exacerbating energy poverty (Focus group:
nuclear power, 2016). Most stakeholders, irrespective of their preferences,
regarded this as a high risk, while its impacts are defined as medium- to-marginal
if adequately counteracted by ad- hoc public investments. The cost issue has
become more acute with financial problems besetting private firms like EDF,
Areva, and Toshiba (Thomas, 2017; Vaughan, 2017). However, negotiation
between investors and the UK government over a long- term fixed price for electricity well above current wholesale prices could counteract such risks. The
CGS addresses the need to reduce costs of nuclear power while maintaining
safety by investing in innovation. SMRs, with lower capital requirements, may
represent an alternative long- term option to mitigate investment risk, although
as yet commercially unproven. SMR development in the UK would require an
adequate regulatory framework and siting might prove problematic as SMRs are
likely to be most cost- effective if sited near urban areas. Overall, the risk of lack
of investment because of high costs is registered as having high likelihood
among stakeholders, depending on the evolution of timings and costs for new
nuclear power plants, as well as on ongoing uncertainties in electricity prices. In
the opinion of stakeholders, the magnitude of the effects of this risk is less
certain. Their impact may be limited given the overall political support for new
nuclear (see the earlier discussion about the ongoing policy support for the
sector).
Nuclear accidents/social disruption and activism
Despite being two separate risks, nuclear accidents and social disruption/activism can be often correlated, as underlined by a majority of our stakeholders.
Hence we discuss them as complementary sub- risks of a single category. Managing social acceptability of nuclear expansion per se received very little emphasis among the stakeholders, who underlined that social acceptance of nuclear in
the UK is widely diffused, with studies supporting such a perspective (Jay et al.,
2014). Yet stakeholders clearly stressed that nuclear accidents elsewhere in the
world can strongly affect public perception about nuclear expansion, significantly increasing social opposition. Past experience has shown that even distant
accidents have radically shifted countries’ positions towards nuclear. This happened for example in Germany, where early nuclear shutdowns were a consequence of the Japanese Fukushima accident (Kepplinger and Lemke, 2016).
While the chances of major nuclear accidents and related consequences are
regarded as small in general terms, the majority of stakeholders perceive the
High nuclear costs and limited profit margins
While it has low operational costs, nuclear electricity suffers from high and
often very poorly estimated costs of construction (e.g. Harris et al., 2013). Stakeholders emphasised cost escalation for nuclear reactors and delays in implementation among the main challenges for the sector. High costs for nuclear- based
electricity require substantial incentives and subsidies. Such costs may impact
low- income consumers, potentially exacerbating energy poverty (Focus group:
nuclear power, 2016). Most stakeholders, irrespective of their preferences,
regarded this as a high risk, while its impacts are defined as medium- to-marginal
if adequately counteracted by ad- hoc public investments. The cost issue has
become more acute with financial problems besetting private firms like EDF,
Areva, and Toshiba (Thomas, 2017; Vaughan, 2017). However, negotiation
between investors and the UK government over a long- term fixed price for electricity well above current wholesale prices could counteract such risks. The
CGS addresses the need to reduce costs of nuclear power while maintaining
safety by investing in innovation. SMRs, with lower capital requirements, may
represent an alternative long- term option to mitigate investment risk, although
as yet commercially unproven. SMR development in the UK would require an
adequate regulatory framework and siting might prove problematic as SMRs are
likely to be most cost- effective if sited near urban areas. Overall, the risk of lack
of investment because of high costs is registered as having high likelihood
among stakeholders, depending on the evolution of timings and costs for new
nuclear power plants, as well as on ongoing uncertainties in electricity prices. In
the opinion of stakeholders, the magnitude of the effects of this risk is less
certain. Their impact may be limited given the overall political support for new
nuclear (see the earlier discussion about the ongoing policy support for the
sector).
Nuclear accidents/social disruption and activism
Despite being two separate risks, nuclear accidents and social disruption/activism can be often correlated, as underlined by a majority of our stakeholders.
Hence we discuss them as complementary sub- risks of a single category. Managing social acceptability of nuclear expansion per se received very little emphasis among the stakeholders, who underlined that social acceptance of nuclear in
the UK is widely diffused, with studies supporting such a perspective (Jay et al.,
2014). Yet stakeholders clearly stressed that nuclear accidents elsewhere in the
world can strongly affect public perception about nuclear expansion, significantly increasing social opposition. Past experience has shown that even distant
accidents have radically shifted countries’ positions towards nuclear. This happened for example in Germany, where early nuclear shutdowns were a consequence of the Japanese Fukushima accident (Kepplinger and Lemke, 2016).
While the chances of major nuclear accidents and related consequences are
regarded as small in general terms, the majority of stakeholders perceive the