A role model for Britain

3 August 2002

By following the example set by Finland, the UK will ensure that nuclear remains a major part of the energy mix. By Robin Jeffrey, executive chairman, British Energy

On 14 May, the Department for Environment, Food and Rural Affairs (DEFRA), the Department of Trade and Industry (DTI) and the Department for Transport, Local Government and the Regions (DTLR) published the timetable and terms of reference for the consultative and legislative process aimed at establishing an energy policy for the UK. The timetable shows that submissions to the consultative document have to be submitted by September of this year with the intention of issuing a White Paper by the turn of the year.

The good news is that all of the right questions now seem to be on the table.

• Security of supply. Could there be a risk of supply failure over a 5-year/10-year/20-year horizon?

• Climate change. What measures can best be used to encourage a transition to a low carbon economy?

• Energy efficiency. How can a balance be struck between the benefits of internalising environmental costs and the need to manage costs for industry and the consumer?

• Renewables. Is the government target of 20% renewables by 2020 achievable and what will this mean for the security, quality and availability of supplies?

• Transmission. What are the implications for networks and grid infrastructure, especially if 20% of the UK's electricity is to come from renewables?

• Nuclear. Will other low carbon options be reliably available and what needs to be done to keep the nuclear option for the future?

Energy diversity

Ten years ago, Britain's electricity came mainly from coal. There was no input at all from gas because up until then government policy prevented the burning of gas in power stations. Nowadays, we have a rough balance between coal, gas and nuclear. That is a very good situation to be in - diversity of source produces energy security.

However, by the year 2025, we'll be back where we once were, with one fuel dominating - only this time it's gas. According to projections, 70% of the UK's electricity eggs are going to be back in one basket.

There are a number of potentially extremely serious problems with this situation. For a start, 90% of that gas will have to be imported - through pipelines thousands of miles long - from places like Russia, the Middle East and North Africa. It's interesting to note that the biggest of these markets - Russia - doesn't intend to rely too heavily on its own Siberian gas supplies. It's investing now in a new nuclear programme - because it needs the security and diversity of power supply that such a programme can provide. This is concrete proof of the folly of the UK becoming over-dependent on a single fuel source.

Today, nuclear power provides roughly a quarter of the UK's electricity needs. However, the end-of life shutdown programme began some ten years ago and it is forecast that in about 20 years from now, of the 33 reactors currently operating today, only one, Sizewell B, will still be functioning. If this happens, then greenhouse gas emissions will continue to rise, taking us further away from the reduction in CO2 emissions the UK government is emphatic we must achieve.

Nuclear power is the one major type of electricity generation - apart from renewables, of course - that does not contribute to climate change. But, in a move that brings a whole new meaning to the word absurdity, it appears that we as an industry are going to have to pay the new Climate Change Levy. This makes about as much sense as proposing that the owners of pushbikes pay a tax on car exhaust emissions.

Quite simply, the market on its own will fail to deliver a diverse energy supply in which coal, gas, nuclear and renewables all play their part. Some important voices have spoken out on this topic. For example, the government's chief scientific adviser, professor David King - formerly a nuclear sceptic - has said that an ongoing nuclear programme must be part of the solution. His concern is not with politics or economics - but with the environment. And he's absolutely clear that our entire renewables programme would not even come close to replacing the benefits already afforded by our existing nuclear plants in terms of combating carbon dioxide emissions.

And similarly, Sir Ken Jackson, former general secretary of Amicus, said a few weeks ago: "If this government is committed to meeting its Kyoto targets it must rebuild Britain's nuclear power industry." He added: "If we don't invest in nuclear power we will be forced to rely on unstable oil and gas imports. That could push up prices for consumers and it will surely mean we are unable to meet our Kyoto obligations. Nobody has yet begun to explain how we meet our emissions targets if, at the same time, we are losing the nuclear contribution."

The Finnish experience

In Finland, they have four nuclear reactors providing around 28% of the country's electricity. Two factors really stand out from the Finnish experience.

The first is how much progress they have made in the storage and disposal of spent nuclear fuel and other radioactive waste materials. For example at Olkiluoto:

• 15 years ago they brought into service a surface store to take the overlife spent fuel inventory and keep it safe for around 50 years.

• 10 years ago they brought into service a deep underground repository sized to dispose of all the low- and medium-level waste products from lifetime operation.

• And they have selected the site for the ultimate disposal of all of Finland's spent nuclear fuel, with parliamentary and local community support.

A strategy and timetable was set for resolving how to deal with spent fuel waste management in 1980 with the aim of having the repository operational by 2020. Quietly and systematically the Finns have worked to that timetable. They have involved government but, much more importantly, they have involved the local communities. They have a world class visitors centre and have demonstrated full openness.

The second key factor is the progress made towards a national energy policy:

• The Finnish government has reviewed the needs for electricity over the next several decades.

• The decision has been taken to build a fifth reactor.

• There is parliamentary and local community support for the new nuclear unit to be located at either of the two existing plants.

The parliamentary vote for siting the waste management facility was almost unanimous, and when later it came to the fifth reactor decision it was 107 to 92. In my view, without wide confidence that the spent fuel management issue had been solved, there would have been no decision in favour of a fifth reactor.

Follow the Finnish line

So, what lessons can the UK draw from the Finnish experience?

We in the UK must now get on and resolve our waste management issues.

I am greatly heartened by what I hear from Nirex recently. The solution lies in open and honest community relations, pragmatic engineering based on the experience of others and high quality science.

New people need to be attracted into our industry to retain our expertise and our cutting edge. There is a real risk that without an ongoing nuclear programme we would lose our indigenous capacity to engage in major power station projects. This is a matter with implications for the whole economy of the UK since there are some 30,000 jobs in the nuclear industry at stake.

The worst thing we ever did in the UK was to build seven AGR power stations, all quite different from each other. I know, because for seven years I was the project manager at one. The reactor choice for the future must now be firmly based on world best practice.

British Energy has recently signed and announced agreements with both AECL and BNFL/Westinghouse to assess the feasibility of their respective current designs of reactors as potential replacements for our existing nuclear plants. These agreements address issues such as licensing, regulation and, of course, costings. This represents a serious and significant step forward in the quest to develop a replacement UK nuclear power station programme.

There's about a year's worth of work to do on this project, before we are able to choose which of the two designs we will go for. What is for sure is that the commercial development of a new reactor design will be a vital step forward not just for the UK, but for the whole industry. The scale of these projects and their international importance will instil confidence in the nuclear industry and has the potential to mark Britain out as a leader.

BE's submission to the UK government's review of energy policy is titled Replace Nuclear with Nuclear. That sums up our view perfectly. We propose that as today's plants retire, there should be follow-on plants at existing sites. There would be no site procurement issues - we own the land on which the plants would be built; they would connect into the existing transmission lines; there will be continuity of employment for the highly skilled staff; and we will be able to continue to make a significant contribution to local communities and to build on their existing support.

We advocate a mixed energy policy. Everyone will have their own favourite mix and of course these numbers are highly subjective. But what we are proposing is: gas 40%; renewables 20%; coal 15%; nuclear 25%.

In order to achieve this we would have to build replacements for about ten of today's nuclear plants over the next 20 years. Ten 1000MWe new generation nuclear plants - one of the biggest infrastructure projects ever undertaken in the UK and one which would, of course, have huge economic and job creation implications.

Furthermore, we believe that such a building programme can be achieved wholly within the private sector, provided the government sets the appropriate policy framework.

Plan of action

As an industry we need to continue to demonstrate to the investment community that existing nuclear plant is one of the safest methods of producing electricity and that it will, with less overall risk, generate earnings for shareholders. Just think about the ample, long-term availability of uranium and the recent doubling or more of gas prices.

We must treat as a matter of urgency the provision of permanent nuclear waste repositories. It is all very well for nuclear supporters to push the case for nuclear's considerable environmental benefits. But our arguments will ring hollow until we bring into service permanent, retrievable repositories. Resolving the long-term waste issue is technically straightforward and is now making progress. However, it will require political will and a partnership between industry and government in addressing public concerns.

We need to get much better in presenting the environmental case for nuclear power. At present, BE's nuclear stations avoid the CO2 equivalent of half that produced by the UK's cars. According to present plans, over the next 20 years this huge saving will be lost. Without nuclear power, the UK will not be able to maintain low carbon emissions and security of supply.

And finally, any new build programme must have a robust business case that fully recognises the time value of money. This means that to attract investment, any new reactor design will have to be substantially cheaper and much quicker to build than today's plants. The only way government can realistically keep the nuclear option open is by creating a climate in which new build is a possibility.

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