A special extended bumper New Year edition
By Dave Elliott
The UK starts 2015 with a big new year headache- the Hinkley nuclear project. It is a huge uncertain project, and it is far from clear, if goes ahead, whether it will prove to be a wise investment, given the fall in energy costs and the emergence of cheaper renewable alternatives. (more…)
Few people see nuclear power as a cheap option. The capital cost is high, and the ultimate cost, if something goes seriously wrong, could be very large. The UK’s nuclear liability law is based on the Paris and Brussels Convention on Nuclear Third Party Liability, which has been in operation since the 1960s. The operator is required to take out the necessary financial security to cover its liabilities and in the UK this is currently set at £140m. Recent amendments, which are not yet in force, are aimed at ensuring that greater compensation is available to a larger number of victims in respect of a broader range of nuclear damage. In particular, it will be possible to claim compensation for certain kinds of loss other than personal injury and property damage, including loss relating to impairment of the environment. The period of operators’ liability for personal injury has been increased from 10 to 30 years and, more generally, the limit on operators’ liability has been increased to €700 m. That’s the situation as summarised recently by Lord Hunt, then energy Minister.
However if the worst comes, then even €700m is unlikely to be enough. The cost of just upgrading the emergency containment shelter at Chernobyl in 1997 was $758 m. Quite apart from the loss of life, with estimates of early deaths ranging up to several thousand and beyond, and also lifelong illnesses (e.g. related to immune system damage) for some of those exposed, the total economic costs of the Chernobyl disaster were much larger: e.g. Belarus has estimated its losses over 30 years at US $235 bn, with government spending on Chernobyl amounting to 22.3% of the national budget in 1991, declining gradually to 6.1% in 2002. And 5-7% of government spending in the Ukraine still goes to Chernobyl-related benefits and programmes. www.greenfacts.org/en/chernobyl
Some of these estimates may be inflated (like any insurance claim), but it seems clear that major nuclear accidents are expensive. They are of course rare. Less rare is overspend on building nuclear plants. The EPR being built in Finland has seen overrun cost put at 55% so far. If and when a new nuclear construction programme goes ahead in the UK, we are told it will be the private sectors problem- the government is not providing subsidies. Lord Hunt commented ‘We have taken clear steps to minimise the risk of costs falling to Government’. But he added ‘Of course, in extreme circumstances, if the protections we have put in place prove insufficient, the Government would step in to meet the cost of ensuring the protection of the public and the environment’.
It is of course not entirely true that the taxpayer is not providing subsidies for nuclear power. For example, the Labour government helped set up a range of new support projects, including £20m for a ‘Nuclear Centre of Excellence’ along with ‘up to £15m’ for a ‘Nuclear Advanced Manufacturing Research Centre’ and a £80m loan to help a Sheffield steel company to link into the nuclear supply chain. And of course, via the NDA, it has taken over the legacy debts associated with waste management and decommissioning old plants and facilities – over £70billion and rising. For more on subsidies see: www.energyfair.org.uk/home.
In line with the Con- Lib Dem collation agreement, Chris Hulne, the new Lib Deb Energy and Climate Change Secretary, has said that there will be no public subsidy for nuclear power. He even seemed, perhaps ill-advisedly given the liability arrangements mentioned by Hunt above, to extend that to support in the event of a disaster. He told the Times (15/5/10) “That would count as a subsidy absolutely. There will be no public bailouts . . . I have explained my position to the industry and said public subsidies include contingent liabilities.” If that is adhered to strictly, it would certainly face the nuclear industry with extra, and possibly open ended, costs. But then, in line with Lib Des views, Hulne has made it clear that he doesn’t think the industry can actually proceed without subsidies.
The Coalition does however want the carbon trading system to yield much higher prices for carbon, so that fossil fuel would cost more. Electricity prices would then rise across the board, helping nuclear. Renewables would of course also benefit and there are good environmental reasons for increasing energy prices. But it would be an indirect subsidy for nuclear and renewables – paid for by consumers. In addition, the Coalition has backed the idea of setting a minimum ‘floor price’ for carbon, to stabilise the carbon market. In the event of a carbon market down turn, it would have to be backed up by taxpayer- in effect a direct subsidy.
Against these and other costs and risks there will also be benefits- low carbon energy and employment gains. However that would also be true if the money was spent instead on other low carbon energy options – of which there are plenty, many of which could be cheaper and could be deployed more rapidly.
The UK is backing some of them -e.g. offshore wind, wave, tidal- but it is sometimes argued that nuclear will add diversity to the mix. The problem is that there may be some conflicts and incompatibilities when trying to mix basically inflexible nuclear with variable renewables. That could lead to extra costs and waste – for example when there is excess wind generation available over and above the nuclear base-load, the wind input will be ‘curtailed’, making wind power artificially expensive and wasting useful carbon-free energy. Moreover, given that, as overall budgets are limited, any spending on nuclear must inevitably involve less spending on renewables, they may not all develop as rapidly as they could. So we may end up with less overall diversity.
To be fair, that would also be true if we focussed on some other options. Some critics say that we are focussing too much on wind power. But that has to be put in perspective- over the years, nuclear has had the lion’s share of R&D and public investment in new energy technology, and we are still spending about half our energy R&D funding on nuclear fission and fusion. By comparisons, renewables, as a group, have been starved of funding until recently. Wind has been the first of the new options to break through, but hopefully we can now develop a fuller range of renewable options. After all, as group, they are very diverse, and arguably offer a viable route to a more sustainable future. From that perspective, nuclear just gets in the way- diverting technical, skill and financial resources away from renewables and other sustainable options and making it harder and more costly to operate a viable low carbon future.
The nuclear industry does seem to be having bad luck. Its flagship new projects, the European Pressurized water Reactors (EPRs) being built in Finland and France, are both well behind schedule and seriously over-budget, with a range of construction problems and errors pushing up costs and putting completion years away. For example the estimated final costs for Olkiluoto 3 in Finland have risen from €3 bn to €4.5 bn and the completion date has been put back from 2009 to 2012. The second plant, at Flamanville in France, is already 9 months behind schedule, and is not now expected to begin operation until 2013, rather than 2012 as originally hoped. The cost of the power produced by it will be around 20% more than planned – around €55/MWh instead of the €46 announced when the project was launched in May 2006.
Certainly a surprising number of a safety issues have emerged during construction; evidently more than 3,000 mistakes have made by the builders so far at Olkiluoto. See the quite striking poster summary from Greenpeace at www.greenpeace.org/raw/content/finland/fi/dokumentit/ol3SafetyPoster.pdf
Some of this might be put down to teething problems with “first of a kind” plants. But perhaps more fundamentally for the future, UK, Finnish and French nuclear-safety regulators have objected to aspects of the EPR design: “The EPR design, as originally proposed by the licensees and the manufacturer, Areva, doesn’t comply with the independence principle, as there is a high degree of complex interconnectivity between the control and safety systems.”
As World Nuclear News noted, some safety systems protect against the failure of control systems and so should be impossible for them to fail together, which means Areva must re-work the design if it is to get regulatory clearance – and before construction of EPRs in the UK.
Meanwhile the US nuclear regulator has objected to a key part of the Westinghouse AP1000 design: it said that it would have to be modified to receive approval for use in the US.
The AP1000 is another candidate for UK deployment.
The UK Health & Safety Executive is looking at both the EPR and AP1000 designs, and, according to media reports had identified possible problems which, if not progressed satisfactorily, would mean that H&SE “would not issue a design acceptance confirmation”.
H&SE however pointed out that they were only part way through their assessment and that there were confident that any issues would be resolved.
Some politicians also seem confident about the merits and viability of a major new nuclear programme. Gordon Brown told the CBI that “we will now build not 12 gigawatts of nuclear capacity but 16 gigawatts, a total for new building that is bigger than all our current nuclear capacity”. But with possible technical problems still unresolved, and with delays mounting, the prognosis for rapid deployment does not look too good.
The financing issues are also looking difficult. Although the UK government have insisted they will not subside the nuclear programme directly, the City Group economic consultants have concluded that nuclear can’t be financed just by private sector: www.citigroupgeo.com/pdf/SEU27102.pdf. In fact, although no direct financial support is being given, a range of indirect subsidies are in train. For example, government seems to be accepting to need to support a “floor price” for carbon in the EU Carbon Trading System of around £30/tonne, which would help make nuclear more economic, but would load consumers up with extra costs. The Times talked about an extra £227 on annual energy bills, although EDF put it lower. Even so, it’s likely to be politically difficult.
And more problems are looming. Plans for long-term nuclear waste disposal could come unstuck because of new evidence of corrosion in copper, a material that was to be used to seal waste underground. Examination of copper artefacts from the Vasa, a 15th-century galleon raised from Stockholm harbour, has shown a level of decay challenging the scientific wisdom that copper corrodes only when exposed to air.
The waste issue is likely to be made even tougher since, to improve their economics, the new nuclear plants proposed for the UK will have high fuel “burn-up”. This means that the fuel is enriched to a higher level and stays in the reactor longer, with more of the fuel being converted to plutonium and other radioactive by-products of fission. This in turn means that the spent fuel is hotter and more radioactive- which could present problems with plant operation, waste management, storage and disposal. Especially since, given that there are no plans for reprocessing, it will have to be kept on site at the nuclear plant for many decades (EDF has just suggested 60 years for the proposed new plant at Sizewell) before it goes off somewhere (as yet undetermined) to be kept isolated for 100,000 years or so.
All this makes it rather hard to accept the governments claim, in its recent the National Policy Statement (NPS) on nuclear, that it is “satisfied that effective arrangements will exist to manage and dispose of the waste that will be produced from new nuclear power stations” and that “as a result the IPC [Infrastructure Planning Commission] need not consider this question” when reviewing the plant planning applications.
This has drawn a lot flack. Four former members of CoRWM, the UK government’s first advisory committee on radioactive-waste management, including its chair Prof. Gordon Mackerron, noted that their 2006 report had only looked at “legacy” waste – the new wastes opened up new issues: “In the absence of a process or acceptable policy for new build wastes, they may remain on site indefinitely. It is quite possible that, as a result of sea level changes, storm surge and coastal processes, conditions at some of the most vulnerable coastal sites will deteriorate thereby making it increasingly difficult to manage the wastes safely. The problems presented by managing wastes in the very long-term will be both generic and site-specific. Consequently we find it hard to understand why the IPC, when considering applications for the development of individual sites, need not consider the question of waste management. Given the levels of public anxiety raised by the issue of nuclear waste and the burdens of risk and management that are imposed on future generations we believe consideration of safe management of wastes at each site should be a primary concern of the IPC.”
The NPS is a consultative draft. Whether the suggested block on discussion of waste by IPC will survive remains to be seen.