Nuclear Power: The Future

Malcolm Grimston

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The speed with which nuclear energy has returned to the policy table is quite extraordinary.

As recently as 2003, nuclear power was effectively dismissed by the government. "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,” the Energy White Paper stated. “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 plants.

But Meeting the Energy Challenge – a new white paper on nuclear power published this month – finds in favour of nuclear power as the best option for meeting British energy targets in what the government sees as the most efficient manner.

In his foreword, Prime Minister Gordon Brown argues: "The Government has today concluded that 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. Nuclear power is a tried and tested technology."

Why such a striking change in tone?

During the 1990s (and the early years of this century) it all looked very easy. Then, the ‘dash for gas’ had delivered major investment in new-electricity capacity. The new technology, Combined Cycle Gas Turbine (CCGT) delivered cheap electricity with about half of the greenhouse gas emissions of coal-fired plants.

But, in the last three or four years things have started to look very difficult. The UK is now a net importer of natural gas. Most developed countries are, but the antics of Mr Putin in cutting off supplies to Ukraine in December 2005 did cause significant concern. When more immediate sources such as Norway and North Africa are exhausted, the UK will be right at the end of some very long pipelines which stem from the Middle East and the former Soviet Bloc, where most of the world’s gas is located.

Environmentally, the UK’s record since the Kyoto Protocol of 1997 has been disappointing. After several years of declining carbon dioxide emissions they are now rising once again, owing largely to the reemergence of coal, the fastest-growing of the major energy sources both 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 up with it.

We need three things from our electricity industry: secure supplies (power cuts are hugely expensive in economic and social terms); 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. 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.) Undoubtedly some wind generation will be built, but because the wind is intermittent and unpredictable such capacity cannot be treated as ‘firm’, unlike coal, gas or nuclear, when it comes to making sure we have enough plant available to cover peak demand.

So where does nuclear fit in? Uranium is a plentiful resource found in a wide range of countries including such politically stable regions as Canada, Australia and the USA. The power stations do not depend on weather conditions to operate and the recent experience of global power-plant operations, though sadly not in the UK, has been almost uniformly 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, since uranium represents a much smaller proportion of total costs than is the case with 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 and, it is expected, will be more reliable in operation for that reason. Experience of construction projects over the last ten years, mainly in the Asia-pacific region, has been good, with plants being delivered to time and to cost.

The government, however, rightly takes the view that the economic risks associated with investment in nuclear energy should be taken by the investor, not the state. The government’s 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.

But the decision is tough. 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 a lifetime extension for the current generation of stations, 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.

With no lifetime extension a gap appears, but if new build is delayed by five years as well that gap becomes a large one. 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.

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