Testing times for nuclear power

Today’s top stories

• Donald Trump won the New Hampshire primary in the fight to become the Republican candidate for US president, but last-rival-standing Nikki Haley vowed to fight on. US managing editor Peter Spiegel says incumbent Joe Biden’s zest for a rematch with Trump is “morally ambiguous and strategically short-sighted”.

• There was welcome news for the UK and eurozone economies in the shape of better than expected PMI surveys. In the UK, the data showed business activity increased at the fastest pace in seven months in January, while in the eurozone it showed the economic downturn appeared to be easing as manufacturing activity picked up, although price pressures appear to be increasing.

• The FT revealed that the EU was readying more sanctions against Russia and financial support for Kyiv. The package includes a 13th set of restrictions on businesses and individuals connected to the 2022 full-scale invasion of Ukraine, as well as a long-delayed agreement on €50bn for Kyiv over the next four years.

For up-to-the-minute news updates, visit our live blog

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Good evening.

Nuclear power generation will reach an all-time high next year, according to the International Energy Agency, but cost overruns in the UK and Russia’s grip on nuclear fuel highlight some of the challenges facing governments as they seek to maximise its role in their energy mix.

The IEA says output from nuclear plants will rise 3 per cent this year and next, boosted by new reactors in China and India and the return of plants in France that were shut down last year for maintenance. The growth in nuclear, alongside wind and solar, means the share of electricity supply from fossil fuel generators will fall to a record low of 54 per cent by 2026, the IEA predicts.

Nuclear power has staged a remarkable revival since the Fukushima disaster in Japan in 2011, boosted not only by the drive to net zero but also concerns about energy security following Russia’s full-scale invasion of Ukraine.

It’s not all plain sailing. As we report today, Britain’s flagship Hinkley Point C plant is facing delays until 2029 and cost overruns rocketing to as much as £46bn. The French state-owned operator and constructor EDF has also experienced long delays on parallel projects in Finland and France. 

(The UK received a separate blow to its net zero ambitions today when the National Audit Office raised doubts over the carbon footprint of heavily subsidised biomass power plants, which supply about 11 per cent of the country’s electricity.)

Another headache for the global nuclear industry is Russia’s dominance of supplies of enriched uranium, the fuel needed for nuclear power. As our Big Read explains, the US is making huge efforts to combat this by rebuilding its nuclear supply chain, ravaged by the collapse in demand after Fukushima and years of neglect. 

Uranium prices meanwhile have more than tripled since the start of 2021 to a 16-year high. In addition, Kazatomprom, the world’s largest producer of the radioactive material, has warned that its production could be hit by shortfalls of sulphuric acid, used to extract uranium from ore.

Despite the challenges, also including the problem of hazardous waste, more than 20 countries at the UN’s COP28 climate summit in Dubai last month agreed to try to triple global nuclear capacity by 2050. 

Some are sceptical, arguing the target is unrealistic. The foreword to December’s World Nuclear Industry report goes even further: “Nuclear energy is riding a new wave of popularity, and is seen by many policy planners and energy experts as part of the solution to reducing carbon emissions . . . However, given its long lead times and exorbitant costs the prospect of this happening is virtually zero.”

Need to know: UK and Europe economy

The UK borrowed much less than expected in December, boosting Chancellor Jeremy Hunt’s plans to cut taxes ahead of the forthcoming general election. Cash-strapped English councils are to get an extra £500mn for social care as they struggle against the threat of insolvency.

Also under financial pressure is Royal Mail, the UK postal provider. The Ofcom regulator outlined plans to relax current legal requirements and allow deliveries just three days a week.

The EU scaled back plans for tighter controls on outbound investment and sensitive technology exports to avoid a “turf war” with member states. Competition commissioner Margrethe Vestager said Brussels would improve co-ordination with governments to help protect the bloc from authoritarian states such as China.

The showpiece €800bn EU recovery fund, intended to finance the digital and green transitions, is being held back by red tape, according to leading industrialists, with less than a third of the resources so far disbursed.

Need to know: global economy

The G7-backed mission to boost preparations for future health crises said governments and industry should invest as much on preparing for pandemics as they have on Covid-19 research to avoid costly lockdowns.

Artificial-intelligence powered audio deepfakes are emerging as powerful tools in a year of big elections around the world. The latest example this week is a fake robocall in New Hampshire of Joe Biden apparently telling people not to vote.

Workers in Argentina are striking today against libertarian President Javier Milei’s economic reforms, which unions say “break the social contract” and renege on deals. Around 40 per cent of the country’s 13mn registered workers belong to unions, many of which are closely allied with the Peronist movement that led the country’s previous government.

Investors in Indonesia, south-east Asia’s biggest economy and an emerging powerhouse in green industries, are closely monitoring who will succeed Joko Widodo when he steps down after the general election on February 14.

Need to know: business

Procter & Gamble reported strengthening consumer demand in the third quarter even as it raised prices, lifting its share price as well as those of its rivals. Investors were awaiting the results for clues as to whether inflation-wearied consumers may have reached the limits of what they will pay for household brands, such as Tide and Pampers.

Novo Nordisk and Eli Lilly have a new challenger in weight-loss drugs: Danish biotech Zealand Pharma. Goldman Sachs says the market could grow from $6bn to as much as $100bn by the end of the decade.

Apple has been quietly preparing to bring artificial intelligence to its next generation of iPhones. The company has been more active than its Big Tech rivals in buying AI start-ups, acquiring 21 since the beginning of 2017.

The FT editorial board said Tata Steel’s plan to close its UK blast furnaces marked a step into the unknown for the country’s steel industry, leaving it unable to produce “virgin” steel and relying on melting down scrap.

EasyJet said strong demand for summer flights meant it was likely to narrow its losses, despite a £40mn hit from the conflict in the Middle East.

War’s good for one thing, of course: arms sales. US aerospace and defence group Lockheed Martin forecast a larger than expected increase in 2024.

The World of Work

US banks are toughening up requests for employees to return to the office. Bank of America has sent “letters of education” to workers who have not been showing up, warning them of disciplinary action. Nearly four years since companies sent workers home at the start of the pandemic, 82 per cent of large financial companies still have hybrid arrangements in place.

As for those remote workers, should bosses have the right to monitor their computers? Listen to the new Working It podcast.

The UK government is being urged by unions and recruiters to scrap a fresh attempt to bring in legislation that would allow employers to break strikes by hiring agency workers to fill in for employees taking industrial action.

The annual FT-Vitality survey on Britain’s workplaces suggests different generations have wildly different ways of reacting to stress: the middle aged numb themselves with alcohol while the young succumb to depression.

Some good news

Doctors at London’s Great Ormond Street Hospital are testing a “game changing” leukaemia treatment for children who can’t have chemotherapy.