UK Nuclear - maybe not
Jumping the gun a bit, and despite protestations
from the DTI that there were still no plans for new nuclear plants,
last year, according the the Daily Telegraph (3/9/01), BNFL ‘began
negotiations with the nuclear regulator to get the green light for its
latest power station, ahead of a possible lifting of the Government’s
unofficial moratorium on new nuclear plants’.
The Telegraph added ‘The new stations
would be built on the sites of Britain’s existing nuclear plants,
most of which are due to be mothballed in the next 20 years’.
However it noted that ‘BNFL is keen
not to fund the new stations, and would enter into joint ventures with
construction companies prepared to foot the capital cost, estimated
at about £1 billion per station. A firm Government commitment to nuclear
energy is essential to secure funds from
City institutions’.
Of course you could see this sort of press story
as just reflecting the PR push by BNFL and the nuclear lobby generally,
aimed at putting pressure on the government, who clearly don’t
want to fund more nuclear plants.
The Scotsman. (3/9/2001) ran a parallel story, suggesting
that ‘ministers could order the building
of new nuclear power stations in Scotland’,
adding that ‘it is thought any new
nuclear station would be built on the site of existing stations at either
Hunterston in Ayrshire, Torness in East Lothian, Chapelcross in Dumfriesshire,
or Dounreay in Caithness. All are due to be decommissioned in 2010.
The majority of ministers on the Whitehall energy review committee are
said to be in favour of the plan, with even formerly anti-nuclear MP
George Foulkes convinced of the need for more power’.
The constitutional situation then emerged, with
the Scottish National Party complaining that Scotland had not been properly
consulted and indicating that it would ‘use all means at its disposal,
both in the Parliament and outside, to ensure that new nuclear power
is not forced on the nation by new Labour’. It transpired that
actually, as the First Minister noted, "any
application for a new power station in Scotland, whether nuclear or
not, must be made to Scottish Ministers; they have the power to grant
consent or otherwise". So Scotland could
in effect veto a Westminster decision.
Meanwhile, in its evidence to the PIU Energy Review,
British Energy called on the government to ‘replace nuclear
with nuclear’ and take over the £3bn in liabilities it has
incurred for nuclear waste disposal so as to allow it to fund 10 new
nuclear plants at a cost of £10bn. It also wanted a new ‘carbon
free’ incentive of perhaps £10 per MWh, for the output from its
nuclear plants, to make up the excess cost over gas generation. It looked
to a future with nuclear still supplying 25% of the UK electricity,
coal 15%, gas 40% and renewables 25%, arguing that nuclear could in
effect ‘make space for coal’ by offsetting its carbon emissions,
thus ensuring diversity of supplies.
In its submission, the GMB union felt similarly,
but Prof Ian Fells saw coal and nuclear as supplying 30% while
renewables could only offer 10%. SERA by contrast argued for
a nuclear phase out and a major renewables commitment: we’ll cover
SERA’s input in Renew 136. The Institute for Public Policy Research
argued that until the issue of nuclear waste was resolved nuclear should
be discounted.
Subsequently the government published its long awaited
report on this issue, but only as yet another consultation document-
which means that a decision will be stalled yet again, until 2006! But
very surprisingly, given the heightened concerns about terrorism, the
government decided to allow BNFL to run its MOX plant at Sellafield.
Meanwhile, France has installed ground to air missiles at its reprocessing
plant at Cap le Hague in Brittany and the US has removed its nuclear
sites from official maps!
Back in the UK, the big issue next is whether the
generally low priority given to nuclear in the PIU drafts will survive
in its final report - out any day.
Energy Consultant David Milborrow submitted
evidence to the Performance and Innovation Units Energy Review examining
the influence of using low discount rates and long depreciation periods
on generation cost estimates for wind and nuclear technology.
He concluded that present-day onshore wind generation
costs are roughly equal to "lower bound" nuclear estimates, and notes
that there is firm evidence that wind costs are falling steadily, bringing
them below those of nuclear. Present-day offshore wind generation costs
lie within the range of nuclear cost estimates, but these, too, are
likely to fall.
Overall, he says ‘wind
appears to be in a very competitive position, not least on account of
shorter construction times and fewer uncertainties on cost issues’.
In his paper he notes that ‘the nuclear industry often argues that
generating costs would be lower with lower discount rates and/or longer
depreciation periods, so such costs cannot be examined in isolation.
It is logical to compare them with other carbon-free technologies, which
would also benefit from changed financial parameters. Of these, wind
energy has the best combination of resource and cost’.
With a project test discount rate of 8% and a depreciation
period of 15 years, he calculates that the nuclear generating costs
lie in the range from $0.055 to $0.073c/kWh; the corresponding figure
for onshore wind is also $0.055/kWh and for offshore wind $0.07c/kWh
(approx 5p/kWh). And if account is taken of recent capital cost reduction
in wind plant (with installed costs of around $750 being assumed), then
wind actually beats nuclear hands down, with wind costs being significantly
lower than those of "lower bound" nuclear costs - $0.0373/kWh for wind,
compared to $0.0455/kWh for nuclear at 8% discount rate, and $0.0285/kWh,
compared to 0.0354/kWh for nuclear at 4% discount rate). On this basis,
offshore wind costs lie within the range of nuclear costs, falling from
6.7c/kWh at 10% tdr, to 4.3 c/kWh at 4% tdr.
