11. Nuclear News

Nuclear- a secure option?

In its report on Energy Security (see earlier in this section) the Select Committee on Trade and Industry looked at the prospects for nuclear power. Would new build ever become economic enough to be a contender in the private sector? The British Nuclear Industry Forum (BNIF) summarised the problems: ‘The principal drawbacks [the City] see are the very large up-front capital costs, lengthy and uncertain periods of planning and construction, uncertainties about back-end issues like waste management, anxieties about public opinion and regulatory risk, relatively low levels of profitability at present UK electricity prices, and over-capacity in the generating market’.

BNIF’s chief concern was prices: these were, they said, currently 30% lower than they were when British Energy (BE) was privatised, ‘a totally unexpected level of decline’. The Committee was told that even a fall of 5% had been sufficient to reduce BE’s dividend. Although BE’s plants were operating at about 1.8p/kWh, which was competitive with the cost of gas-generated electricity, the waste liabilities inherited by the older Magnox stations added to their costs and converted nuclear-generation from being profitable to loss-making. New types of nuclear plant currently being licensed and which would be ready for commissioning in about ten years’ time (presumably the AP1000) would have generating costs of between 2.2 and 3p/kWh, the difference depending on whether the station was a one-off project (in which case the higher end of the range would apply) or, say, the eighth in a series, when the price would be lower because development and licensing costs would be spread over the series, and there would be economic benefits from experience in construction.

The Committee were told that these prices included the cost of management of the radioactive waste produced, and any extra costs associated with modifications to protect against terrorist attack. The estimates also reflected improvements in design and construction techniques (fewer components, shorter construction times and a dramatic reduction in the volume of buildings) which reduced the overall capital costs to maybe half of those of Sizewell B. They also reflected the smaller quantity of nuclear waste produced by modern reactors. But, despite these comparatively low costs, the industry still felt that nuclear power was at a disadvantage compared with other fuels, particularly gas. Even after the recent rises in the price of wholesale gas (to about 20p/ therm in mid-Nov 2001), gas-fired power stations could still produce electricity at about 2.3p/kWh. In the view of the BNIF, the lower cost and greater ease of constructing gas-fired plants would encourage a continued ‘dash for gas’ whenever electricity prices rose sufficiently to warrant further construction of generating capacity.

The Committee noted that there were also planning and public acceptability problems with nuclear plants. But on one of the key issues, waste, the industry’s view was that storage of radioactive waste no longer presented any technical problems (techniques such as using concrete blocks and vitrification were suitable methods of storage for centuries, if need be, and for ultimate disposal); the difficulty therefore resided in public reluctance to accept the safety of these techniques and to permit suitable sites to be found and used. The industry’s view was also that changing public perception required Government action: a statement in favour of nuclear power, together with some practical assistance in paying for the establishment of rock laboratories to prove the reliability of storage techniques, were required. If these resulted in an alleviation of public anxieties about nuclear power, financiers would be more likely to invest in new plant.

The Committee asked the witnesses whether reforms to the planning system, Government pronouncements in support of the nuclear industry and other confidence-boosting measures (such as minimising regulatory pressures and risks) would, on their own, be sufficient to encourage the market to build new nuclear plant. The answer was a rather equivocal "No". The industry pointed out that all these sorts of disadvantages simply increased investment risk: if the financial reward were great enough, that would largely counterbalance planning difficulties and so on. The irreducible problem was the gap between the electricity price of 1.8p/kWh and the cost of new nuclear generated electricity of about 2.5p/ kWh. What was required was some sort of financial assistance to bridge that gap, preferably one that would provide a subsidy of about 1p/kWh - which they justified as reflecting the benefits of nuclear as a carbon-free energy source, and as being a cheaper means of replacing the 25% capacity lost when the old nuclear stations closed than renewable power would be. They would not specify the mechanism for this: it could be done by means of some kind of levy or tax, or by way of emissions trading. They did, however, say that exemption from the Climate Change Levy would not be enough - it would only reduce costs by 0.4p/kWh.

The BNIF gave evidence before the proposal to transfer waste management liabilities to a Liabilities Management Authority (see Renew 137). But the Committee felt that this transfer ‘should decrease the cost of nuclear generation, at least as far as the British Nuclear Fuels fleet is concerned’. However, it added that it remained to be seen ‘whether relieving the industry of these liabilities will actually change public perception of the industry and encourage investment in it’. You can say that again!

In conclusion, the Committee noted that ‘for reasons of security and diversity of energy supply, many witnesses referred to the desirability of retaining the option for nuclear generation. They said that action needs to be taken in the short term if a commercial option to build new nuclear plant is to be sustained.’ But, deferring to the PIU perhaps, the Committee avoided recommendations, other than to say that it was ‘essential that there be no further delay in government decision-making; the Government should make a clear statement on the future of nuclear energy as quickly as possible’.

BE and BNFL friends again

British Energy (BE) has found it cannot extricate itself-at least for the time being-from its advanced gas-cooled reactor (AGR) fuel reprocessing contracts with BNFL, despite BE’s strong protests last year about the "crippling reprocessing costs" which it said were ruining profitability to the extent that BE might eventually be forced to abandon its U.K. nuclear generation business and move abroad. BE had called for a moratorium on reprocessing AGR spent fuel, in preference for dry storage. It noted that reprocessing also added unnecessarily to the U.K.’s civil separated plutonium stockpile, around 2.5 tonnes so far.

But BNFL would not budge on the contracts- pointing to the stiff penalties it could invoke for defaulting, and BE has now backed off. Executive Chairman Robin Jeffrey commented ‘we have both recognized that at a time when our industry is under the microscope, it makes a lot of sense to work together on co-operative ventures which could lead on to benefits for both our companies and also electricity customers,’ and BNFL and BE are working on a feasibility study of the AP1000 (see Groups).

Nuclear Fuel (4/3/02 ) also noted that BE’s threat to take BNFL to the Office of Fair Trading over the reprocessing contract was ‘off the agenda,’ at least at ‘this point of time’, and the companies are having "constructive" discussions, e.g. on the idea of using higher burn up fuel, although BE say they have no plans to use MOX in AGRs. It later transpired that BE may take over running some MAGNOX from BNFL, which, if the liabilities were excluded, could help BE balance the books. (See Observer 5/5/02, FT 6/5/02)

UK Nuclear phase out

Calder Hall, the UK’s oldest nuclear plant, has closed due to safety concerns relating to radiation induced distortion in the graphite, which has evidently caused the charge pans on the reactor top to tilt. Opened by the Queen in 1956, and claimed to be the worlds first commercial nuclear electricity plant, its main task was actually to produce plutonium for weapons, and latterly, with the current glut of plutonium, it has just provided power for the Sellafield site. The four old Magnox reactors at Chapelcross, which were used for military purposes, have also been closed. But BNFL, which runs all these reactors, is seeking permission to restart them, although they are scheduled to close finally in 2006 and 2008 respectively, so that expensive repairs seem likely to be hard to justify. ( later on it was decided not to bother -ed)

Many of the subsequent fleet of commercial MAGNOX reactors are now being decomissioned- Berkely went first and the others are following. But, back at Sellafield, there have been problems with cleaning up the UK’s first atomic pile- the infamous Windscale Pile 1, which is the one that caught light in 1957. The £60m dismantling programme being carried out by the UKAEA has been halted due to fears that the graphite core, which is packed with melted nuclear fuel, may catch fire if it is exposed to air, despite plans to fill the space with inert argon gas. The reactor, which was built to produce plutonium for the UK’s A bomb, was sealed up after the accident in 1957. It looks like it may have to stay that way- although it can’t remain like this indefinitely since the containment buildings will deteriorate. The total cost of cleaning up all the various old plants on the Sellafield site has been put at at least £24bn.

Better Luck Next Time

In its submission to the PIU energy review, British Energy which it seems has been losing money on its nuclear operations, called for nuclear power to be given a subsidy to help it compete, on the grounds that it was an important option for avoiding the emission of CO2. They proposed something akin to the Renewables Obligation for nuclear capacity - a ‘Carbon Free Obligation’, with a 1p/kWh buy out price, plus the writing off of BE’s £8bn historical liabilities (for decommissioning old plant built until public sector ownership). The PIU seems to have ignored this, suggesting instead that nuclear power be left as an insurance option, in case renewables, CHP and efficiency improvement didn’t not yield enough emission savings.

A ‘leave the nuclear option open for later review’ option was clearly also supported by the major ‘World Energy Assessment’ carried out in 2000 by the UN Development Programme, the UN Department of Economic and Social Affairs and the World Energy Council. It concluded that ‘if the energy innovation effort in the near term emphasises improved energy efficiency, renewables, and the decarbonised fossil energy strategies, the world community should know by 2020 or before, much better than now, if nuclear power will be needed on a large scale to meet sustainable energy goals’.

To be fair, the nuclear lobby has received a boost from Finlands decison to build a new plant, the USA’s plans for nuclear expansion , and from the European Parliaments’ inclusion of nuclear power as one way to cut greenhouse gas emissions. This was in the EP’s long-awaited response to the Green Paper on security of energy supply, a Paper that was adopted by the European Commission the year before last. But all the new EC policy involves is a commitment to ‘removing legislative and fiscal obstacles.’ Otherwise, it sounds like nuclear power has missed the boat in the EU, at least for now. Nevertheless, as noted in Renew 136, BE and BNFL still have aspirations for a revival, via the AP100 and perhaps the CANDU, as replacements for the AGR’s- in ten years time.

See Groups for reactions from the environmental organisations.

PBMR rolls on

Plans for building the first prototype Pebble Bed Modular Reactor are emerging, after a delay due to design problems. A PBMR spokesman recently said the aim was to develop the test plant in 2003,with the preferred site being Koeberg outside Cape Town.

As described in Renew 135, the PMBR uses billiard ball - sized spheres of uranium coated in silicon carbide instead of the rods used in conventional plants, and helium gas at high temperature for heat extraction. Proponents say that it will be cost effective and proof against meltdown, and that the small size of the plants will make them suitable for remote rural areas.

The PMBR project is backed by, amongst others, BNFL but the major US utility Exelon (who had a 12.5% share) pulled out from its $22m investment in April. Even so, if has been suggested that, if all goes well, the US might eventually build up to 40 of the reactors. It has also figured in proposals put out by British Energy and BNFL in the UK. And, if all goes well, the South Africa utility Eskom has said that it might order 10 PBMR plants to provide power to coastal regions, remote from the the country’s coalfields in the north.

Environmentalists are however opposed to the project. The community-based action group Earthlife Africa told the AFP News service "The most appalling part of the strategy is that they’re going to develop this in rural areas, remote from scrutiny, and could bury the stuff on site". There was also the issue of why this unproven technology was being developed in South Africa, rather than in the USA. Earthlife Africa has evidently told the Pretoria government that if it "insists on this foolish path of investing in nuclear power, there should certainly be equivalent investment into renewables" such as wind, wave, solar and small-scale hydro power. Source: Space Daily, Jan 15.

See http://www.spacer.com/news/nuclear-civil-0b.html

Also www.saep.org/subject/nuclear/pbmr/pbmr.htmland

The UK tried to develop a high temperature helium cooled reactor, somewhat similar to the PBMR, back in the 1960’s- the Dragon project at what was then the UKAEA’s reactor test site at Winfrith in Dorset. It was a small prototype, which evidently had problems, and was not followed up.

Chernobyl Myths

According to Anthony Brown, writing in the Observer (6/1/ 02) a new study of ‘the Human Consequences of the Chernobyl Nuclear Accident’ produced by the UN ‘is a challenge to those who seek to highlight the dangers of nuclear energy’ since it concludes that "the medical effects of radiation are far less than was thought" and "the biggest damage to health has instead come from hypochondria and well-meaning but misguided attempts to help people", such as relocation, which have added to stress levels. Brown’s rendition of the still to be published UNDP/ UNICEF report was subsequently challenged as giving a "wholly misleading impression of its findings" in a letter published in the Observer (13 Jan) by Patrick Gray, one of the UN assessment team. He added ‘the suggestion that the only health consequences are likely to be 41 deaths from radiation sickness, together with cases of childhood thyroid cancer ‘totaling 1,800in all’, is indefensible. In fact the draft report says that on conservative estimates, a further 8,000 cases of thyroid cancer can be expected’.

• The Ukrainian Government’s commission on radiation security told the Izvestia newspaper that 24% of babies now born near Chernobyl have birth defects. The recent ECCO 11 Conference was told that Chernobyl has already caused nearly 2,000 cases of thyroid cancer. See Groups.