(Bloomberg) -- The U.K.’s power generation mix will see a dramatic shift from 2024 as output from its nuclear units is forecast to fade out sooner than anticipated.
Electricite de France SA failed to secure agreements for half of its nuclear fleet in a government-led auction to keep capacity available in 2024-2025 this week. While some of the units are expected to close by 2024 several aren’t and their future looks uncertain. The future capacity has been crowded out by cables that import power from Europe.
It’s likely the U.K. needs nuclear power as a low carbon electricity source to help meet its commitment to zero out emissions by 2050. Demand for power is set to double by then as heating and transport sectors electrify. Additionally, the huge program of offshore wind the U.K. is planning to roll out within nine years will need a reliable back up for when the wind stops blowing.
Nuclear generation is designed to run around the clock whereas power interconnectors flow in both directions depending on price and supplies aren’t guaranteed. Nuclear capacity that’s guaranteed by a contract is set to decline 75% by 2024 from today, according to BloombergNEF data.
“I am not confident that the security of supply situation is secure enough we can do without them,” Thomas Edwards, a modeling consultant at Cornwall Insight said in a tweet.
EDF is building a new nuclear station Hinkley Point C but that won’t be generating until 2026 so storage technology or small scale gas plants will be needed to keep the lights on. A 1.4 gigawatt power link to Denmark that’s under construction was successful in the auction along with a new cable to France.
“The energy mix in the U.K. is changing,” EDF said in a statement. The company “is investing significantly in new nuclear, renewable generation and battery storage, as well as helping customers to use energy more efficiently.”
Britain’s Aging Nuclear Plants
One unit at both Torness and Heysham-2 didn’t win contracts in the latest auction. EDF is likely to put this capacity into the top up auction held a year in advance, a spokesman said.. Dungeness B22 wasn’t entered into the auction because it hasn’t generated for two years and the rules prevent it from participating, EDF said.
No coal plants won contracts and two large-scale gas plants SSE Plc’s Keadby and Medway were unsuccessful, according to the data.
“We are finally seeing some old gas plants failing to clear, which was about time,” said Andreas Gandolfo, analyst at BloombergNEF. “I think they were waiting to see what will happen to capacity prices without coal and nuclear.”
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