Making a difference in the power sector (0:50)
0:50-4:06 (Julia discusses how she transitioned from law to EDF Energy and why she chose the power sector to begin with.)
Q. How did you get into the power sector to begin with?
A. Julia Pyke spent most of her career as a lawyer at Herbert Smith Freehills where she rose to Head of Power. She worked on many different energy projects, including advising EDF on nuclear power. Julia chose to pursue a career in power because she believes climate change is an important problem and wanted to make a difference. While learning about energy markets is complex, she enjoys taking on intricate problems. While in this position, Julia learned that it is difficult to make new nuclear build happen because the UK wants to ensure the public’s interests are well considered. The UK must balance the wants of local people in a potential build site with the needs for clean power and jobs. New nuclear builds in rural communities can help stimulate local economies by bringing in new skills and creating more jobs.
Decommissioning and new build in the UK (4:07)
4:07-11:09 (Julia explains why there has been such a gap in nuclear build in the UK. She also discusses the new Sizewell C site and nuclear decommissioning in the UK.)
Q. What accounts for the gap in UK nuclear build?
A. The UK has primarily gas reactors and built the Hinkley pressurized water reactor in 1997. Sizewell B also became operational in that year, but there has been no new nuclear build since. Many reactors were built 40 to 50 years ago and will be decommissioned, so new build is greatly needed. Sizewell C will be a direct copy of the Hinkley pressurized water reactor.
The gap in build can be primarily attributed to the lack of focus on climate change. Additionally, the cost of gas using Combined Gas Cycle Turbines (CGCTs) were cheap and fast to build. CGCTs have high carbon emissions and methane leaks contribute negatively to climate change. It is therefore necessary to focus new UK build on clean energy solutions.
Julia’s first introduction to the nuclear sector was when she was in a junior law position as a bag carrier. She later joined the team that advised the UK government on nuclear decommissioning. She is now the Nuclear Development Director of Financing for EDF Energy on the Sizewell C project. Much of the nuclear industry in the UK was public and British Nuclear Fuels ran Sellafield. This site was established in the 1950s and focused on both nuclear weapons and power. It also housed the first nuclear reactor. Decommissioning sites like Sellafield differs greatly from decommissioning commercial sites in the UK. This is because the records kept of the Sellafield design are lacking, meaning much of the decommissioning work focuses on understanding and classifying systems. Newer build reactors are designed with decommissioning in mind, meaning decommissioning comes at a lower price. The cost of decommissioning is also being factored into the price of the sold nuclear energy. The nuclear industry is the only industry that accounts for waste, paying for it upfront. Nuclear waste is well managed and has no documented cases of causing harm. However, this careful approach may be the cause of the negative views about nuclear waste by bringing attention to the potential harm that could be caused if the industry was not as careful. Julia sees a need for improvement in how the nuclear sector handles public relations (PR).
The Sizewell C project (11:10)
11:10-18:34 (Julia explains how she transitioned from law to EDF Energy. She also outlines the Sizewell C project and how EDF plans to work with wind power to supply the UK with clean energy.)
Q. How did your career transition from the law firm to EDF?
A. Julia had already spent 10 years advising on Hinkley. She is passionate about climate change and knows that nuclear can be scaled in the UK. Hinkley provided the basis for the regime and the UK now knows how to make nuclear investible. Julia sees her work on the Sizewell C project, which will be a direct copy of Hinkley, as being the best thing she could do to help combat climate change.
Copying Hinkley has several great advantages. The first is that new nuclear builds require a great deal of paperwork and legal hurdles to get around. The Sizewell C project will cost a great deal less than others because the paperwork needs only be replicated. Additionally, planning, decommissioning and waste handling processes were already decided upon and approved for Hinkley, saving yet more time and money for the Sizewell C project.
EDF Energy is currently applying for planning permission from the local and national governments for the Sizewell C project. The reactor will be built on the existing Sizewell site. Sizewell A has already closed and Sizewell B is in operation, providing 3 percent of the UK’s energy needs. From a land area perspective, nuclear is incredibly environmentally friendly because a high percentage of energy can be generated in a small area due to the energy dense nature of nuclear. Sizewell C is predicted to provide 7 percent of the UK’s energy needs.
While France can be looked to as a great example of how nuclear fleets can be used to decrease a country’s carbon emissions, Julia foresees nuclear power working together with wind energy to supply the UK with clean power. The UK is considering the optimal mix of energy sources, specifically looking at how technology will continue to develop, such as grid flexibility and battery storage. The performance of these new technologies will become more well known over time, enabling the UK government to make firmer decisions about nuclear. Sizewell C is, therefore, a perfect opportunity for EDF to showcase a strong, cheap design and an investment opportunity for pension funds.
A new approach to financing nuclear (18:35)
18:35-26:09 (Julia discusses how Sizewell C is a good investment opportunity to attract private capital and how the new finance model lowers risk.)
Q. If Sizewell C can prove to be a good investment opportunity for pension funds, it could attract more private capital to nuclear.
A. Pension funds are moving away from fossil fuels and towards satisfying people’s demands for social and environmental investments. Nuclear power is a strong long term investment because electricity will always be in demand. EDF is also exploring the idea that Sizewell could become an energy center, producing hydrogen and capturing produced heat. EDF is considering “no regret” changes to the Hinckley design, which are small changes to increase flexibility of production. This means that a nuclear facility would be designed to enable the diversion of steam for hydrogen production, for example, by just implementing a simple change. These alterations require no large engineering changes.
EDF plans to fund Sizewell by using the regulated asset based model. This model reduces the market because the capital cost of building is multiplied by a competitive return. The government will not need to consider the market for hydrogen or heat at this time. The capital cost is known, and the government can choose if Sizewell will be used primarily for electricity or for other energy needs, such as district heating. The UK government can make multiple decisions just by knowing the capital cost of building times the return.
A government appointed economic regulator has consumer interests in mind when working with EDF. Many low carbon projects are presented as “contracts for difference”, meaning the generator receives a subsidy higher than the market price for electricity. The developer knows that it will receive a fixed price and the developer takes on the full construction risk. The regulated asset based model is different in that the price is actual, sharing construction risk with investors and consumers. Shared risk lowers capital cost greatly because investors will not take on the full risk or losing money .
Challenges and benefits of Sizewell C (26:10)
26:10-31:28 (Julia discusses some of the challenges associated with Sizewell C and how the existing supply chain will be strengthened in the UK. She also explains the current status of the project and her hopes for the future.)
Q. What are some of the challenges for the Sizewell C project?
A. EDF must prove that the Hinkley design can be copied. The Sizewell site is located on the opposite UK coast and has different ground conditions. This could complicate recreating the exact foundation design. A benefit of copying the Hinkley design is quantities of construction materials are already known. This means that the risk of overrun is greatly reduced. The team is also experienced, ensuring the project will be completed on time.
About 64 percent of materials came from the UK for the Hinkley project. Sizewell C is predicted to have about this as well. Understanding the supply chain well is another benefit of recreating Hinkley, support new build in the UK while also growing local businesses. Careers such as welding can be supported and grown in the UK through new nuclear builds.
EDF has been speaking with potential investors. Nuclear has yet to look to private capital in the UK, meaning EDF must first educate potential new investors about nuclear power. They hope to have investor approval by the end of 2021, with building commencing in 2022. Sizewell B was built on time and in budget. This UK success can be recreated with Sizewell C, creating a great step towards decreasing the UK’s reliance on fossil fuels and move towards mitigating climate change. This is incredibly important for Julia, who wants to move towards a sustainable, clean world for her children.