Britain’s energy transition is more complex than meets the eye

The UK government is pursuing an uneconomic nuclear programme in large part so as to maintain and renew military nuclear capabilities, argues Andrew Warren, chairman of the British Energy Efficiency Federation, in an article on the BusinessGreen website.

 

Submarine thinking: A ‘lock-in’ of nuclear power would be reckless for the economy and the climate

The appointment of a new chairman to a FTSE250 company involved in nuclear arms manufacturing might normally be only of passing interest to BusinessGreen readers. But the announcement last month that Sir Stephen Lovegrove has been appointed the new chairman of Rolls-Royce did attract attention.

Eyebrows were raised mainly because Lovegrove’s experience neatly straddles oversight of both facets of nuclear engineering: atoms for military purposes and – as the 1950s slogan would have it – atoms for peace.

Back in 2007, as CEO of Shareholder Executive – a government body set up to manage government investments – Lovegrove oversaw the sale of the British government’s stake in the privatised nuclear company British Energy to EDF, while at the same time raising financing for the aerospace company Airbus. This was his first crossover experience between defence and energy.

In January 2013, Lovegrove was appointed the top civil servant at the then-Department of Energy and Climate Change (DECC), following what was said to be a personal intervention by then-Prime Minister David Cameron. This was most controversial, as the civil service process, led by then energy secretary Ed Davey, had already offered the job to the then-CEO of the Climate Change Committee (CCC) David Kennedy.

As BusinessGreen editor-in -chief James Murray wrote in the Guardian, this unusual Prime Ministerial intervention brought accusations that Cameron was seeking to appease Conservative anti-green backbenchers, by “blocking the appointment of a senior civil servant who has repeatedly called for more ambitious action on climate change through his work at the CCC”.

Whilst Permanent Secretary at DECC, Lovegrove oversaw the start of construction of the first new nuclear power station in a generation at Hinckley Point C in Somerset. He also oversaw the demise of the government’s flagship Green Deal energy efficiency programme, together with a 90 per cent reduction in the installation of residential insulation measures.

Lovegrove then moved on to head the Ministry of Defence (MoD), before being appointed to succeed Lord David Frost as the government’s national security advisor. It was during this time that Rolls-Royce was starting to explicitly lobby for its submarine nuclear technology experience to act as a starting point for obtaining backing for a smaller nuclear reactors (SMRs) programme.

Two parts of the nuclear complex

Lovegrove’s appointment to chair Rolls-Royce underscores the ties between the two parts of the nuclear complex, a trend which has been quietly evolving for some years.

In written evidence submitted to the MoD in 2006, Rolls-Royce asserted that depletion of civilian nuclear skills had “reduced the support network available to the military programmes”

Meanwhile, Jeremy Stocker of the International Institute for Strategic Studies told Parliament the same year the British submarine force may not remain large enough to support submarine building capacity, and that “this will especially be so if, despite renewed calls for them, a new generation of civil nuclear power stations is not constructed”. Stocker also expressed fears the Royal Navy would eventually become the UK’s only operator of nuclear reactors, meaning the “entire burden of the nuclear safety and regulatory regimes would fall on the defence budget”.

Subsequent military policy documentation is replete with warnings civil nuclear power and naval nuclear propulsion are inseparably entangled in their supply chains and skills needs, as well as wider research, design, operating, regulatory, and materials capabilities.

With declared submarine programme costs already on the edge of being insupportable, associated interests reckoned it was crucial that the bulk of this wider expense be covered by a parallel commitment to new civil nuclear power. With civil nuclear more fundable in anticipation of decades of electricity revenues, the trickle-down to shared supply chains would allow associated costs to stay outside the defence budget, off the public books and entirely invisible to critical scrutiny.

Indeed, a 2007 report by a senior figure in the nuclear submarine industry highlighted exactly the need to ‘mask’ submarine programme costs in other non-submarine related programmes.

As noted by Professor Andy Stirling and Professor Phil Johnstone in written evidence to Parliament in 2019, a heavily-redacted secret government report on the UK nuclear submarine industry published in 2014 also stressed that civil nuclear decline has contributed to nuclear submarine construction skills becoming “atrophied”.

The report, according to Stirling and Johnstone, recommended that “the [submarine] programme seek imaginative methods to better engage with the emergent civil new-build programme…to the benefit of defence; that “the Research Programme Group establish a work-strand to look at leveraging to maximum effect civil nuclear investment” and the MoD “revisit the possible option of utilising other nuclear facilities including those in the civil sector”.

These recommendations were evidently readily taken up by government. A 2015 document jointly produced by the Departments for Defence, Energy and Climate Change and Business, Innovation and Skills outlined that civil and military nuclear should “draw on the same pool of skills for most activities” creating a need for decisive “common efforts to build skills capacity for both programmes”. At the time, Lovegrove was running DECC.

This agenda crystallised in the 2016 launch of the new Nuclear Skills Strategy Group, which has the aim of aligning government, defence and civil sectors and facilitating and encouraging cross-sector movement between civil and defence”.

‘A symbiosis with military needs’

In a select committee inquiry on Hinkley Point C nuclear reactor in 2017, Lovegrove – then Permanent Secretary of the MoD – stressed the development of civil nuclear would benefit the nuclear submarine industry. “We are completing the build of the nuclear submarines,” he said. “There is very definitely an opportunity here for the nation to grasp in terms of building up its nuclear skills”. Significantly, he added: “It is going to require concerted government action to make it happen”.

Subsequent UK government industrial strategy has intensified the push towards “concerted action” to align the civil nuclear and nuclear submarine sectors.

Despite its uncompetitive energy cost performance, nuclear was one of the very first industries to receive an official sector deal from government in 2018. In the policy document, the Nuclear Industry Council placed emphasis on “increasing the opportunities for transferability between civil and defence industries” with “greater alignment of the civil and defence sectors with increased proactive two-way transfer of people and knowledge”.

The overall implication is that crucial parts of the vast expense of maintaining and renewing UK military nuclear capabilities is being underwritten by support for a hugely costly civil nuclear programme.

Even Rolls-Royce appeared to concede to this argument in 2017, when it stated that support that Small Modular Reactors will “relieve the Ministry of Defence of the burden of developing and retaining skills and capability. This would free up valuable resources for other investments”.

This advantage has been recognised more recently by a senior Rolls-Royce executive, John Sampson, who wrote in Nuclear Intelligence Weekly that there is a “symbiosis with military needs” and “developing a UK SMR also would help Rolls-Royce maintain UK capabilities for the country’s military nuclear naval programme”.

These unspecified ‘strategic benefits’ of otherwise uneconomic nuclear megaprojects are unclear. Spending on new civil nuclear projects, at costs much higher than competing zero carbon power options, channels funds into a combined civil or military nuclear supply chain that constitutes a de facto hidden subsidy for sustaining the UK’s submarine industrial base.

A lack of UK nuclear new build power stations is contributing to ever increasing problems of cost overruns and delays threatening the MoD budget. Without a civil nuclear programme, these costs will increase further, pushing the MoD’s budget beyond a politically sustainable level.

What is most remarkable about these arguments is that they are so well documented on the military side, but virtually entirely undeclared anywhere in official UK energy policy.

Among wider issues concerning the quality and accountability of UK policymaking, this raises profound questions for the analysis of the economic and political dynamics around nuclear megaprojects.

In seeking to understand this further, we must extend attention beyond individual nuclear megaprojects to address an all-encompassing nuclear infrastructure complex.

The climate implications

Lovegrove’s appointment to chair  Rolls-Royce happened to coincide with the revelation that nuclear power’s contribution to Britain’s electricity mix was down at 13 per cent in 2023, the lowest proportion for 40 years.

With the slow pace and high cost of new nuclear power reactor development undermining their climate policy rationale, it is clear to me that UK civil nuclear commitments are being driven to a large extent by military nuclear interests that are almost entirely concealed in energy policy.

This has major implications for the efficacy of UK climate action, given the environmental, safety, security, waste management, and international political problems that a transition towards greater reliance on nuclear power could entail.

The national industrial base is being steered away from the benefits of alternative, more export-viable and jobs-intensive, clean energy industries. A military-driven national lock-in to nuclear power also means excessive economic burdens will fall on taxpayers and, even more regressively, on electricity consumers.

These consequences of nuclear dependency are unfolding without any targeted analysis from dedicated agencies and beyond scrutiny by Parliament or wider policy or media debate. That such large scale political irreversibilities are occuring with so little attention raises grave queries about the health of British democracy in the widest sense.