Nuclear? The case is made, now let's get on with it

The rapidity with which nuclear energy has returned to the policy table is quite extraordinary.  As recently as the 2003 energy white paper nuclear power was effectively dismissed.  ‘Nuclear power’s … current economics make it an unattractive option for new, carbon-free generating capacity and there are also important issues of nuclear waste to be resolved.  Before the building of new nuclear power stations there will need to be the fullest public consultation and the publication of a further white paper setting out our proposals.’  Uniquely among the major energy options, then, firms were to be prevented from building new nuclear plant.

Meeting the energy challenge, a white paper on nuclear power published this month, removes an important obstacle to the market delivering on British energy goals in the way it sees as most efficient.  In his foreword, the prime minister says, ‘nuclear should have a role to play in the generation of electricity, alongside other low carbon technologies.  We have therefore decided that the electricity industry should, from now on, be allowed to build and operate new nuclear power stations subject to meeting the normal planning and regulatory requirements... More than ever before, nuclear power has a key role to play as part of the UK’s energy mix.’

Why such a striking change in tone?

We need three things from our electricity industry.  Secure supplies — power cuts are hugely expensive in economic and social terms, and even a fall in the quality of supply (reliable voltage and frequency) can wreak havoc with electronic equipment.  Environmentally acceptable supplies, most pressingly in relation to climate change, and of course we want the lowest costs of production that are consistent with the other goals.

During the decade of the 1990s (and the first years thereafter) it all looked very easy.  The ‘dash for gas’ had delivered major investment in new electricity capacity as well as improving diversity in the system and so weakening the stranglehold traditionally enjoyed by the miners’ unions.  The new technology, combined cycle gas turbine (CCGT) delivered cheap electricity with about half of the greenhouse gas emissions per unit generated of coal-fired plants.

In the last three or four years things have started to look very difficult.  The UK is now a net importer of natural gas, as are most developed countries, but though supplies from Norway and North Africa can fill the gap in the medium term, we will become dependent on gas delivered down long pipelines from the former Soviet Union and the Middle East, the risk of which has increased since Mr Putin cut off natural gas to Ukraine in December 2005.

Existing nuclear generating capacity is also falling: the first generation of nuclear stations (Magnox) is all but past, the second (Advanced Gas-Cooled Reactors) will, without an extension to their operating licences, start to come off line in 2014, with all seven closed by 2023, leaving only Sizewell B in operation. Nuclear will then be delivering three per cent of UK electricity, down from 18 per cent today.  

At the same time it is likely that some older coal-fired plants will also be reaching the end of their economic lives, especially given the need further to cut emissions of sulphur dioxide under the European Large Combustion Plant Directive. 

The 2007 energy white paper estimates that we will need investment in new generation capacity of around 30-35 GW over the next two decades to replace power station retirements and meet rising electricity demand as the economy grows.  (A large new nuclear station is rated at about 1 GW.)  Some wind generation will be built, but as the wind is intermittent and unpredictable such capacity cannot be treated as ‘firm’ when it comes to ensuring we have enough plant to cover peak demand.

Environmentally, the UK’s record since the Kyoto Protocol of 1997 has been disappointing.  After several years of falling CO2 emissions they are now rising, largely due to the re-emergence of coal, the fastest-growing of the major energy sources in the UK and globally in each of the last five years.

As for economics, oil, which was below $10 a barrel in 1998, recently touched the $100 a barrel mark, dragging the costs of other fuels,  especially gas, up with it.

So where does nuclear fit in?  Uranium is a plentiful resource found in a wide range of countries including Canada, Australia and the US.  Recent experience of plant operation globally, though not in the UK, has been of growing reliability.  It stands alongside hydropower as the only proven way of making significant reductions in greenhouse gas emissions.  And economically it is much less affected by increases in global fuel prices as uranium represents a much smaller proportion of total costs than coal or gas.  

The new designs, three of which will be chosen for licensing in the UK, are simpler and cheaper to build than their predecessors.  They deliver safety standards by a greater use of ‘passive’ features based on the laws of nature — the behaviour of uranium at different temperatures, the expansion of water and so on — rather than on ‘engineered’ features such as valves and pumps which have to be duplicated, triplicated or even quadruplicated.  Experience of construction projects over the last ten years has been good, with plants being delivered to time and cost.

The government takes the view that economic risks associated with investment in nuclear energy should be taken by the investor not the government, whose role is to create a technology-blind planning and licensing system and to deal with special issues such as radioactive waste management, which need national policies.  Reform to planning and licensing procedures and the pledge by the opposition not to change the rules for nuclear energy if elected are moves in the right direction.  Subsidies have not been sought or offered.

Will it lead to much?  The likelihood of one or more of the cross-European electricity giants, EdF, E.On, RWE, Enel, Vattenfalls, Endesa, building one or more of the emerging international designs — Toshiba-Westinghouse’s AP-1000, Areva’s EPR, GE’s ESBR or the Canadian ACR — is high.

But the decision is tight.  If, as seems to be a popular proposal among the public, existing nuclear plants are to be replaced by new ones then a start has to be made now.  Even with lifetime extension for the AGRs, an immediate start on new nuclear build, assuming a ten-year plan, finance and build cycle, will only just deliver on an orderly retirement-and-replacement regime if all goes well.

Clearly that gap would need to be filled with something else, almost certainly CCGT, leaving the UK locked into yet more imports and greenhouse gas emissions.  The task is therefore urgent — now that all of the work of consultation and policy has been done it is time to get on with it.

Malcolm Grimston is an associate fellow with the Sustainable Development Programme at Chatham House.