UK to build 12 advanced nuclear plants in £10bn plan

At a projected cost of £10bn – a rough estimate that could well balloon – two companies, Centrica, the parent of British Gas, and X-energy, a US startup, are proposing to develop and build a completely novel type of nuclear power plant.

The technical challenges for the two businesses are huge; the financial challenges perhaps even more so. Centrica is a large company with a big balance sheet, but it has limited nuclear experience. X-energy is a startup with some nuclear expertise, but which has raised only about $1bn in private capital and $1.2bn from the US energy department since the company was founded in 2009.

Far more money than that will be needed to complete the design, while the build of the fuel plant and demonstrator reactors will also cost an order of magnitude more.

Finishing the detailed design of both reactor and fuel plant, and getting them licensed to be built, is a work in progress but it will not be quick. X-energy has tried to boost its financial resources by partnering with potential users: the first is chemical producer Dow, for which X-energy is proposing to build a station to power a plant on the Texas Gulf coast.

Amazon has also invested in the company, and there is talk of power stations running Amazon datacentres in the Pacific north-west. The online retailer led investors in raising $700m to fund the next stage of X-energy’s development.

It is in this context that the Hartlepool proposal sits. The UK station would be the largest X-energy has attempted and Centrica has agreed to invest an undisclosed sum into the scheme.

The two companies are also seeking other equity investors. But even so, this will not be enough to fund even the completion of design development, let alone the build.

No UK government money is being proposed at this point, but Chris O’Shea, chief executive of Centrica, floated the idea last week that the project could be funded by a similar mechanism to the newly agreed Sizewell C reactor.

Under this plan, the £10bn that he says would be required to fund building would be added incrementally to all UK consumers’ electricity bills, to provide cashflow during construction. If that is what happens, then far from being an inward investment, UK consumers will have provided assistance to develop a US reactor design that it can sell elsewhere. The hurdles that have to be cleared to get to that point are, however, huge.

The design being proposed is unlike anything before seen on an electricity grid. Instead of the usual large fuel rods sitting in a highly pressurised water bath, this will use tennis-ball-sized pebbles of nuclear fuel to create the reaction, cooled by a flow of helium.

The idea for this kind of power station has been around for more than half a century, but it has never before been used in a commercial operation. It has some advantages over normal water-cooled reactors. The helium coolant does not pick up radioactivity so, unlike water, the design does not spread radioactivity beyond the fuel pebbles.

The pebbles are composed of agglomerations of much smaller ball bearings, each of which is like a Russian doll: shells within shells. The composition of these allows the fuel to act as its own barrier, stopping it melting and avoiding the need for a thick steel pressure cooker to make sure that any accident does not cause a huge environmental disaster, such as those at Chornobyl or Fukushima.

However, there are technical difficulties that have stopped this design being used before. The fuel is extremely complex and expensive to make. Some of the materials required are very scarce, including the nuclear component itself, which would mostly be available from Russia. It is far from clear that this kind of reactor can be commercially competitive against more traditional designs.

Photograph by Oli Scarff /AFP via Getty Images