Why is the government so against cheap nuclear?

One King’s Speech puzzle was the absence of the promised pensions reforms. Small modular reactors (SMRs) are an essential part of the answer to providing electricity when the wind does not blow nor sun shine – especially in winter. Germany, for example, estimates only 50% of its electricity can come from renewables. The UK government announced, in 2021, that Great British Nuclear would steam ahead with SMRs with fancy (but unnecessary) competitions and all that, but the reality is that HM Treasury have been blocking progress ever since, essentially because they do not want to pay for them and the 2050 net zero costs for consumers are already too high. 

Government is committed to Sizewell C, which it estimates should cost £20bn and take 12 years to build by the French company EDF who have warned that the current cost of Sizewell C’s twin (Hinkley Point C) is £32.7 billion and that this is likely to increase to £40 billion on completion. “Stephen Thomas, a professor at Greenwich Business School, said the average forecast  put the cost at £35bn over 15 years.” 

FOAK (first of a kind) SMRs are more expensive but as the UK will need 200 300KW SMRs, we can take a long-term cost of £2M each.  The 3.2GW Sizewell C output is the equivalent of eleven 300MW SMRs. But £22M for eleven SMRs is way less than the £32,700M now expected cost of Sizewell C, never mind £40,000M. 

The projected output costs for Hinkley is about £10.7 per MW compared with £1.8 – £4.3 per MW for SMRs. So why is Whitehall so keen to finance Sizewell C and not SMRs?

Apparently, clearing the way for the private sector to invest in SMRs requires a change in legislation because Regulation 28 of the Pension Funds Act limits the extent to which funds may invest in a particular asset or in particular asset classes, and prevents excessive concentration risk. The Treasury has published final amendments to Regulation 28 of the Pension Funds Act, which protects retirement fund member savings but there was no indication in the King’s speech that the changes would be enacted.