The Government needs to urgently reinvigorate its nuclear policy following of the demise of three new power station projects in quick succession.

That is the view of John Grainger, stakeholder relations director at membership organisation Britain’s Energy Coast Business Cluster (BECBC), who told in-Cumbria that new nuclear technologies, such as Small Modular Reactors, could have a key role to play while the Government wrestles with bringing down the cost of large-scale developments.

The Government’s nuclear new build ambitions were dealt a hammer blow last week when Hitachi announced it was shelving its plans for a £14 billion power station at Wylfa Newydd, Anglesey – along with longer-term proposals for a second station at Oldbury in Gloucestershire – after talks with the Government broke down over funding for the project.

The news came two months after Toshiba announced it was pulling the plug on NuGen, the developer behind the £15bn Moorside development in Cumbria amid uncertainty over Government support for it.

Mr Grainger said the fact that only one of the once-planned six new power stations was under construction at Hinkley Point C, meant that the UK was facing a significant gap in baseload zero carbon energy as the nation’s eight remaining nuclear power generating facilities begin to wind down one-by-one.

“This reduction of significant gigawatts of zero carbon generation clearly has implications for the current Government’s nuclear, low carbon and industrial policy, and it needs to change,” he said.

“Nuclear currently equates to around 40 per cent of low carbon electricity generated in the UK and critically, from both a sustainability and security perspective, can lead to securing our own energy supply.”

While the contribution of renewables continues to rise while the cost comes down, Mr Grainger said that exploring alternative advanced nuclear technologies could not only help meet the energy needs of the nation, but also raise opportunities for businesses based in Cumbria.

“One opportunity for reinvigorating nuclear investment is being developed by the North West Nuclear Arc, which encompasses nuclear communities at both Moorside and Wylfa,” he explained.

“This collaboration is exploring alternative advanced nuclear technologies that look at economically viable electricity generation by achieving economies of volume rather than traditional economies of scale.

“The Government’s confidence in backing these technologies is underpinned by them supporting with substantial funding up to four different types of modular reactor technology through to proof of concept stage. A new fleet of small and advanced modular reactors will have the ability to complement the current capacity.

“For companies involved in the energy supply chain in Cumbria, many of them BECBC members, this could be a great opportunity to be at the vanguard of creating new technologies and capabilities to export to a huge global market and to be well set to take advantage of openings in a new low carbon nuclear market.”

But Mr Grainger stressed the need for the Government to ensure nuclear remained part of the energy mix and that there was still a compelling case of large-scale developments.

“In parallel, we need to explore new funding models for large- scale investment that could give a competitive strike price and rebalance the risk/reward equilibrium for both Government and investors alike,” he added.

His comments come as the Government explores applying a Regulated Asset Base (RAB) model to support new large-scale nuclear projects. The RAB model sees a regulator set a fixed sum for the cost of a project along with a fix return for the project’s investors, paid for by the consumer.

The introduction of the RAB based model, which is some way off being adapted to nuclear projects, is believed to have scared off Korean utility Kepco when it was negotiating the potential buy-out of NuGen.

However, the Government appears to be keen on using it to support nuclear projects, rather than direct investment, which many industry experts, politicians and academics believe is the only way to ensure they go ahead.

Business secretary Greg Clarke said it the Government had been “very clear” in its offers to support the Wylfa Newydd project following the fall out of Hitachi’s decision to shelve it.

He revealed in Parliament that the Government had offered to take a third equity stake in the project and had been willing to consider providing all of the required debt financing to complete the construction of the power station.

He also said that it was willing to provide a Contract for Difference as long as the strike price was no more than £75 per megawatt hour.

According to reports the strike price offered was the reason behind the breakdown in talks as it is significantly lower that the £92.50 per megawatt hour agreed between the Government and EDF Energy for electricity produced by Hinkley Point C.