Corporate Report 2020 2 3 Today, as power from Calder Hall begins Contents to flow into the national grid, all of us here know that we are at the making of history. For many years now, we have been aware that atomic scientists, by a series of brilliant discoveries, have brought us to a threshold of a new age. Today, we are seeing a solution as this new power is harnessed for the first time Introduction for the common good of our community. 4 Her Majesty Queen Elizabeth II opening Calder Hall on 17 October 1956. Calder Hall was Nuclear landscape the world’s first nuclear power station to generate electricity on an industrial scale. 6 12 Our role in nuclear 20 Areas of work 15 Nuclear Insurance Pools 25 Leadership 17 Our history 29 Company highlights 31 Events 32 Contact us 4 5 Introduction As we look back on 2019, the nuclear energy market is clearly in a very different place than when Nuclear Risk Insurers (NRI) was established in 1956. I hope that you enjoy reading NRI’s first annual Corporate Report. With change come new risks and opportunities in the sector. Against the challenging market conditions of the last decade, low-carbon nuclear energy is an important element of the energy mix required to meet the emissions reduction commitments of the Paris Agreement and the growing need to satisfy carbon net zero commitments into the 2020s and beyond. In anticipation of this year’s United Nations Climate Change Conference Low-carbon nuclear in Glasgow, COP26, our trust in the potential for nuclear power, as a reliable component of a low-carbon energy mix, remains. energy is an important NRI and the nuclear insurance pools are adapting to meet the changing needs of civil nuclear operators, to provide them with the highest quality of element of the energy cover that ultimately supports their social licence and helps give the public peace of mind. mix to meet emissions The takeaway for us is that, as markets change, NRI must continue to be flexible as we enter a new decade. Above all, we must provide strong reduction commitments capacity and technical expertise to be able to guarantee coverage in the event of a nuclear incident. in the Paris Agreement Mark Popplewell ACII Managing Director, NRI 6 7 remains encouraging, particularly in light of the need to decarbonise, with Nuclear 2019 figures from the Department for Business, Energy and Industrial New build progress is being the cost of raising private finance Strategy (BEIS) finding that 35% of made at Hinkley Point C, where for new nuclear projects – reducing landscape people are supportive.3 two reactors are currently under consumer bills and maximising construction. Two reactors are under value for money for consumers Progress on new build in Potentially, the most significant development at Sizewell C (pre-FID), and taxpayers.5 The government the UK policy development for nuclear and there are plans for Bradwell B consultation closed in October 2019. in 2019 was the Government’s to have its first unit in commercial Nuclear remains the largest source announcement of its net zero operation from 2030. If Wylfa An Energy White Paper is of low-carbon electricity in the UK, legislation, requiring the UK to Newydd goes ahead successfully, expected to be published in the contributing 20%. However, all but reduce greenhouse gas emissions Oldbury will likely follow. summer of 2020, which will set one of the UK’s current reactor fleet to net zero by 2050. Nuclear has future direction for nuclear under the will retire by 2030. 1 been essential in reducing emissions New build milestones are Government’s Industrial Strategy. to date as a proven, low-carbon anticipated throughout 2020 as the The nuclear sector provides baseload technology. However, new Government looks to deliver 1. NIA (June 2019): https://www. £6.4 billion GVA to the economy commitment and investment is on its promise to invest heavily in niauk.org/media-centre/ – contributing as much as the needed to maintain its important infrastructure. Plans are underway press-releases/nia-comments-hinkley- point-c-reaching-key-milestone/ aerospace industry – and directly role. Scenarios from a variety of for a potential Development Consent nia-comments-hinkley-point-c-reaching- employs nearly 60,000 workers, with sources, including National Grid Order (DCO) on Wylfa and potentially key-milestone/ 97% of jobs in the sector located and Energy Systems Catapult, Sizewell C. 2. UK Government (2018): https:// outside of London. It is estimated show that the pathways to reach assets.publishing.service.gov.uk/ government/uploads/system/uploads/ that the domestic nuclear market net zero include a substantial role China General Nuclear’s attachment_data/file/665473/The_ will be worth £75 billion up to 2035.2 for new nuclear by 2050. This also HPR1000 GDA Step 3 is ongoing and Nuclear_Sector_Deal_171206.pdf assumes a meaningful contribution parliamentary approval of the final NIA (October 2019): https://www.niauk.org/ resources/jobs-map Following a sustained period of from carbon capture, usage and National Policy Statement for new 3. UK Government (May 2019): https:// momentum, sector confidence has storage, and continued growth of nuclear beyond 2025 is expected in assets.publishing.service.gov.uk/ been damaged by falling renewables renewables. the first half of 2020. government/uploads/system/uploads/ attachment_data/file/800429/ strike prices, expected transition to BEIS_Public_Attitudes_Tracker_-_ the distributed generation network Given the continuing challenge In July 2019, as part of its Wave_29_-_key_findings.pdf and the perceived high cost and of renewables intermittency consultation on the industry 4. Energy Systems Catapult (October 2018): https://es.catapult.org.uk/news/ delivery risk of nuclear (new build and system cost, low-carbon -proposed Regulated Asset Base options-choices-actions-how-could-the- and decommissioning). A high- and storage technologies which (RAB) model to finance new nuclear uk-be-low-carbon-by-2050/ profile company exit by NuGen on are currently available, and the projects, the Government published 5. UK Government (July 2019): https:// the Moorside project in 2018 and the significant expected increase in an assessment of the model. The www.gov.uk/government/consultations/ regulated-asset-base-rab-model-for- suspension of Wylfa Newydd 1&2 demand for electricity for electric assessment found that, by providing nuclear have also undermined confidence. vehicles and heating, the strategic regulated returns to investors, a RAB 6. NIA (October 2019): https://www.niauk.org/ Public support for nuclear power case for nuclear remains robust.4 model has the potential to mitigate industry-issues/decommissioning/ 8 9 sector developing in the UK for enough investment to replace fusion, which includes companies them – approximately two-thirds of such as Tokamak Energy and First the current nuclear fleet in OECD Light Fusion. countries are more than 30 years old. Advanced nuclear Nuclear technologies The UK Atomic Energy China continues to significantly Authority (UKAEA) is the world- landscape lead growth in nuclear investment The Government’s Advanced leading national laboratory for and generation, and the amount Modular Reactor (AMR) programme fusion, working on game-changing International context, of generation in China is expected – launched in December 2017, experiments, operating JET, trends and growth following the cancellation of the constructing the MAST Upgrade Small Modular Reactor (SMR) (MAST-U) spherical tokamak project Nuclear generation remains at competition at the end of last and leading large parts of the around 10% of overall global energy year and a policy reset by BEIS – is scientific campaigns in support generation, and there was an providing up to £56m for R&D for of ITER. In October 2019, the UK unchanged level of overall nuclear AMRs in a phased approach. Government confirmed that it will investment year-on-year up to commit £220 million in funding 2018. However, challenging market A global market for SMRs could for the early development of the conditions remain.7 be worth up to £400 billion and Spherical Tokamak for Energy eight vendors have been producing Production (STEP) programme. There has been a shift in energy feasibility studies for their reactor STEP will create 300 jobs and supply investments towards projects designs as part of the programme, will function as a collaborative with shorter lead times, reflecting including Advanced Reactor programme between the UKAEA, the desire to better manage risks Concepts, DBD, Blykalla Reaktorer industry, universities and other and reduce costs, as well as towards to overtake the US and EU before Stockholm (LeadCold), Moltex organisations. emerging and developing countries.8 2030.11 China's presence in the UK's Energy, Tokamak Energy, U-Battery, This issue may be compounded in nuclear sector remains at the same Ultra Safe Nuclear Corporation and The UK’s first generation of the future by the very recent interest level, with the aim of leveraging this Westinghouse. The announcement nuclear power stations and early in achieving net zero. country's progress to gain global on Phase 2 of this programme is research facilities have left a legacy leadership in the sector. Emerging outstanding and we await further which requires continued and Nuclear is expected to continue nuclear energy countries include clarification from the Government. careful management. In 2005, the to grow globally, although at a slower Bangladesh, Belarus, Turkey and Nuclear Decommissioning Authority rate than overall power generation.9 the United Arab Emirates, which are The UK is a world leader in (NDA) was set up to manage the Global nuclear generation is all constructing their first nuclear nuclear fusion, and progress in big decommissioning challenges that expected to increase by 1,121 TWh power plants. data, materials science and robotics this legacy produced and it currently (43%) between 2016 and 2040, is helping overcome barriers to manages 17 sites across the UK.