In his excellent and mind-expanding talk on “The difficulties of developing and financing new nuclear”, Alexander Johnston first outlined some of the reasons for the UK considering nuclear new build. These include reducing CO2 emissions through the production of carbon-free electricity, diversification of energy sources, and hedging against the risk of volatile and potentially high fossil fuel prices. He argued that these public benefits are difficult for private companies alone to capture and hence, the financing of nuclear new build requires support from government.

To better illustrate the difficulties for a new nuclear station, Alexander Johnston made comparison between financing Combined-Cycle Gas Turbine (CCGT) power plant and nuclear plant, considering every phase involved in building the plants - from licensing to decommissioning:

• Suitable sites for nuclear new build are scarce, and the pre-building procedures are rather lengthy compared to building a CCGT.
• Due to high capital costs and long construction times, new nuclear stations will only gain revenue after operating for at least five years.
• At the end of their life, there are also comparatively higher costs involved in decommissioning of the plant, spent fuels, and waste.

For these reasons, new nuclear stations can only be built by large integrated electricity companies with existing nuclear capacity and with support from government.

Alexander Johnston, as a former partner of Lazard, has vast experience in the field of privatisation and independent capital markets. During his 30 year career, he was involved in advising on the privatisation and post-privatisation of numerous big companies, such as CEGB/National Power, Scottish Nuclear/British Energy. His lecture was informative and provided us with an insight into the realities of the nuclear industry, which will be useful in preparing us for the challenges that lie ahead.

Tan Chin Chee, MPhil Nuclear Energy student (2011-2012)