This article was first published as part of a social media campaign on mallowstreet – an online community for pension funds. The author was undertaking a placement year in the Sizewell C Financing and Economic Regulation team at the time.
As the first wave of coronavirus broke on our shores in early March, we sensed that we might be in this for the long run and, 4 months later, we are still trying to contend with the new reality that C-19 is shaping. As the virus rapidly spread through our towns and cities, it quickly diminished the health of the country – taking with it a sense of security and reducing certainty in the future.
This dissolution of certainty and security, alongside the far-reaching halt in production and activity that lockdown has entailed, has meant that the future of our economy is looking increasingly dim – particularly as inflation dynamics begin to shift.
On top of this, we are also having to contend with the creeping threat of climate change – a threat predicated on, and multiplied through, systemic injustices. In order to combat these resonant threats, we must work to find solutions that not only create long-term, high-skilled jobs but that also ensure a Just Transition to a low carbon economy. In the Green Recovery, we might just find such solutions.
Retrospectively assessing the costs and benefits of different recovery approaches following the 2008 financial crisis, research by the University of Oxford has shown that “putting public money into green projects produced greater returns in both the short and long term than pouring cash into conventional high-carbon projects” (The Guardian, 2020). Further, a shift is being seen in the way that consumers are engaging with their money. One poignant example of this is the recent ‘Make My Money Matter’ campaign – co-founded by Richard Curtis – which has highlighted an increasing consumer consciousness: the emphasis on investing in projects that deliver positive social and environmental impacts is rapidly increasing as more people begin to look at where pension funds are spending their money.
“… putting public money into green projects produced greater returns in both the short and long term than pouring cash into conventional high-carbon projects”
Research conducted at the University of Oxford has shown that invetments in Green Projects yielded greater returns following the 2008 Financial Crisis.
The concept of the Green Recovery should, therefore, not only centre economic stimulus but also look to bring about widespread decarbonisation, in line with net zero ambitions. The combination of these approaches is hoped to regrow the economy, and also begin to address some of the larger issues that climate change presents – before they become entrenched.
So, not only would investment in green projects deliver environmentally friendly outcomes, but it would also trigger sorely needed economic regrowth.
To this end, the identification of suitable, ‘shovel ready’ sites for investment becomes the primary task of public and private investors alike. One such site for investment is nuclear power – with a developed supply chain at Hinkley Point C and 8 possible nuclear sites across the UK, the country is in a privileged position to pursue new nuclear build projects.
Alongside renewables, nuclear power can act as a key enabler of our low carbon transition. For over 60 years, the UK has had nuclear power contributing to its energy mix – avoiding roughly 660 MtCO2e in that time, equivalent to 300 million cars coming off the road for a whole year.
In addition to the large levels of avoided emissions, and as a direct result of the success of the nuclear industry, there have been thousands of high quality and well payed jobs created and maintained for over half a century.
Furthermore, nuclear generation represents an industry with very high labour productivity – as such it is an ideal industry into which ex-fossil fuel industry workers can move. In fact, the nuclear industry is currently strengthening its capacity to enable a Just Transition. One such example of this has been at Cottam Power Station: after closure in September 2019, over 20 employees have been able to find high quality Green Jobs in the nuclear sector – this was enabled through the development of a nuclear pipeline, which smoothed the transition from coal to nuclear through the provision of training and appropriate support services. Similar schemes are being planned for other coal power stations as they begin to close.
‘… thousands of high quality and well payed jobs [have been] created and maintained for over half a century.’
The nuclear industry has consistently provided high skilled and well paid jobs in the UK for over half a century.
Beyond the provision of low carbon electricity and high skilled jobs, the nuclear industry also has the potential to deliver a range of wider benefits through the provision of an energy hub. An energy hub would use some of the low carbon electricity and heat generated at a nuclear power station to power other industrial services – thereby assuring demand for the outputs from the station. By associating a nuclear power station with such services, it would make nuclear power a no regrets decision for Government.
Take, for example, the proposed nuclear power station at Sizewell C: through the concept of an energy hub, Sizewell C would also be able to contribute to the production of green hydrogen, the generation of low cost and low carbon heat, and also the development of a carbon capture and storage demonstration project. By placing Sizewell C at the centre of an energy hub, you would be able to increase the flexibility of the station and therefore further the capacity of renewables and nuclear to work in tandem on the grid: when renewable output is high, low carbon electricity from nuclear power can be redirected towards the production of hydrogen, for example.
In addition to the industrial benefits that a co-located energy hub might confer, there is also a large swathe of local benefits that nuclear power can bring about – including the conversion of a local town to net zero. Working together with the local community and industry-leading experts, the team at Sizewell C are developing a roadmap to take the community of Leiston to Net Zero.
As the UK begins to work towards its 2050 net zero ambition, the decarbonisation of local communities will become increasingly important. Through the development of demonstration towns – such as Leiston – Sizewell C will begin to show the many ways that this goal might be achieved, with the ultimate goal being to replicate demonstration projects in other communities.
Nuclear is also good for local economies. HPC has already invested over £1bn in the regional economy, and has laid the tracks for increasing accessibility to, and diversity of, the industry – on top of this, the Sizewell C project would also bring billions of pounds to the local economy in Suffolk.
Finally, a financing model is currently being considered by the government for the funding of nuclear. If approved, it would provide a long-term, low risk, regulated return on investment while lowering costs for consumers.
Now, more than ever, we need low carbon nuclear – with its ability to provide a swathe of local and national benefits, and its relative protection from inflation risks – to help us get through this period of recovery. It’s ability to not only generate regional and national growth, but also bring the UK towards decarbonisation means that it is the perfect choice for powering the Green Recovery.
BioSphere 