Following recent investment decisions in the UK’s nuclear power sector, the CBI is keen to reiterate that government must continue to support the low-carbon transition, including nuclear power as part of a low-carbon energy mix, via long-term policy frameworks and funding and support for R&D.
The government must maintain the progress made to date on the UK’s transition towards a decarbonised power sector to ensure security of supply at the lowest cost. Nuclear power, alongside renewables, is a key part of the UK’s low-carbon energy mix and as the government and industry find more diverse financing options able to drive significant cost reduction to the benefit of the end user, we must reaffirm our support for new nuclear power by attracting investors from around the world into the UK to invest in our energy infrastructure.
We understand the importance of this subject as we may need to find new, innovative ways of filling the ‘nuclear gap’ should the UK not retain investment for new nuclear power. Businesses will be the driving force behind the innovation and technology needed to fill this ‘gap’ and will require government support in the form of long-term, stable policy frameworks to assure investors that their investment carries low risk with low volatility returns.
The way forward
These long-term, investible policy frameworks should include support for Carbon Capture Usage and Storage (CCUS), hydrogen, onshore wind and solar, biogases as well as negative emissions technologies such as Bioenergy with CCS (BECCS). Future government policy may also look to support the roll out of innovative forms of new nuclear power including Small Modular Reactors (SMRs).
This response fits into our ongoing work around how the UK powers through the low-carbon transition, especially in the energy sector which relies heavily on government support both from a subsidy point of view, as well as policy.
Our response campaigns for the government to review the way in which it designs and implements future energy policies, to ensure they are transparent, predictable, based on cost-benefit analysis, and allow market prices and open competition to determine the solutions and investments necessary to achieve goals at the lowest cost.
We are also campaigning for long-term clarity of the regulatory landscape. Altogether, this provides an attractive environment for both international and domestic investors, which the energy sector will continue to rely on as we transition towards a low-carbon economy and even further towards our mid-century carbon reduction targets.