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Memorandum for the quality of life and energy reviews |
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Written by SONE
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Tuesday, 02 May 2006 |
Britain currently does not have an energy policy. It has an
environmental policy aiming at the reduction of greenhouse gas
emissions by 60% by 2050. The fundamentals of an energy policy –
security of supply at competitive cost – became secondary in the
Government’s 2003 White Paper and were linked with an obligation to
reduce what is described as fuel poverty.
Where we are
The result, as we forecast on its publication, is confusion and failure on all counts. Supplies are on a knife edge in cold weather. We have paid heavily over the odds this winter for gas. Industrial and domestic prices are soaring, inevitably hurting the poorest and forcing some heavy industrial users of energy to shut down. And carbon dioxide emissions have been rising for at least three years. All this is why the Government has been forced to review its 2003 policy.
The failure in part stems from some mutally exclusive objectives such as reducing fuel poverty and security of supply. Fuel poverty, as it is described, should be the responsibility of the social departments and not energy policy. The Government’s drive to slash prices through its regulator, Ofgem, with its short-term perspective, is largely to blame for the current supply risks we run in winter. By cutting wholesale prices to the bone – though with little benefit to domestic consumers – it drove all generators, whether coal, oil, gas or nuclear, to the verge of bankruptcy, eliminated some spare generating capacity and did not encourage the development of gas pipelines and storage. The result is that we are left with a much less robust electricity infrastructure and for the next two winters uncertainty about the adequacy of gas and electricity supplies.
Worse still, the current essentially short-term system of regulation is not encouraging the building of any power stations, apart from heavily subsidised wind which at 0.5% of supply is unreliable as well as marginal.
Longer term outlook
Longer term, the outlook is bleak as our engineering institutions have warned. Current electricity supply is generated by gas (40%), coal (33%), nuclear (20%), renewables, mostly hydro (4%); imports from France, mostly nuclear (2%) and oil (1%). Our coal and nuclear power stations are ageing and steadily closing. The closure of coal stations is accelerated by EU environmental directives. The opportunity for extending the lives of nuclear power stations after more than 40 years’ operation is limited.
Over the next 15 years we could easily lose 25-30% of our generating capacity and at one time the Government seemed happy to replace it by importing more and more natural gas at unknown but rising prices in view of increasing international demand for energy. Norway apart, that gas would have to be imported from such unstable parts of the world as Russia, the Middle East, Algeria and Nigeria. Latterly, the insecurity of Britain’s position has been underlined by three events this winter, leave aside the phenomenon of Islamic militancy:
1 – The willingness of Mr Putin to use Russia’s gas for political purposes
2 - The failure of the monopolistic gas market on the European mainland to supply the UK at heavy cost to British consumers
3 – The activities of rebels in Nigeria in forcing oil and gas workers out of the Niger Delta.
We consider a policy which relies for up to 90% of its energy on imported gas is irresponsible. It becomes culpably reckless in the light of the geo-political and market manipulation warnings set out above.
Naivete piled on irresponsibility
The 2003 White Paper contributed to a widely-shared naivete about the potential of renewables and energy conservation to help close an electricity supply gap opening up with the closure of coal and nuclear power stations.
Roughly three-quarters of the 4% of electricity currently supplied by renewables comes from hydro-electricity, landfill gas and waste incineration. Hydro is effectively fully developed and there is no clamour to sink more valleys under dams. For the rest solar (not much good at night), geothermal, bio-mass, bio-fuels and photo-voltaics are currently highly marginal and mostly likely to remain so because of the demands of some of them for vast areas of land. CHP is of severely limited application in existing buildings and its growth has also been handicapped by the electricity pricing system. Wave and tidal power have not so far been exploited. On a large scale, they are still little more than concepts.
The result is what some regard as an unhealthy concentration on wind power which, even after 15 years’ development, generates only about 0.5% of our electricity. Attempts to develop it are pretty systematically fought in the countryside because of its environmental damage and effect on property prices and health. In any case, wind is unreliable, making for serious difficulties in managing the grid the more it generates, and because of its intermittency reduces greenhouse gas emissions far less than it is supposed to do because coal, oil or gas power stations have to cover on calm or stormy days. Yet the sole justification for wind power is its supposed contribution to global warming. Wind power is thus green tokenism – or political electricity, as it is described in Denmark.
There seems little chance of the Government getting anywhere near its targets or aspirations for electricity supply from renewables of 10% by 2010, 15% by 2015 and 20% by 2020.
This leaves energy conservation. Every year scientists, engineers and technologists improve the efficiency with which we use energy in plant, appliances, vehicles and buildings. Very substantial improvements in energy efficiency have been achieved since the last energy crisis in 1974. But this has not cut the use of electricity, partly because new ways of using it are continually invented. Demand continues to rise by 1-1.5% a year, making the looming gap in electricity supply all the more difficult to close. It is hgihly unlikely that energy conservation will avoid the replacement of a single power station.
The role of nuclear
First, we have to be clear what nuclear can and cannot do. Because of political procrastination, it cannot do much to make for greater security of supply or avoid more greenhouse gas emissions in the short-term. But longer-term it can contribute substantially to greater security of supply and carbon avoidance. That is the case for an early start on developing nuclear power.
Below we briefly meet often ill-informed criticisms of nuclear power.
Economics
The new generation of even safer, slimmer nuclear power stations is now the cheapest generating option since the surge in gas prices. Studies by the Royal Academy of Engineering and the OECD, backed up by other research, demonstrate this. Incidentally, according to the Government’s Energy Technology Support Unit, wind is twice as carbon-dirty as nuclear, taking into account full life-cycle costs of the different systems. Moreover, the price charged to the consumer for nuclear power has uniquely included 4% to cover the cost of decommissioning and waste management. No other source of electricity provides for its environmental costs in its current price.
The future costs of decommissioning and waste management of nuclear waste can no more be related to current reactors than can the future economics of nuclear power stations be related to our earliest Magnox stations, each effectively a prototype, which are now closing. New generations of reactor, unlike the old, have been designed with decommissioning and waste management in mind and will generate about 10% of the remarkably small amounts of high-level waste produced by existing reactors.
Safety
We have just experienced a rush of blood over the 20th anniversary of the Chernobyl nuclear disaster during which the consequences have, as usual, been grossly exaggerated. Since they do not serve their purpose, anti-nuclear campaigners are not inclined the accept the findings of the Chernobyl Forum made up of eight UN bodies, the governments of Russia, Belarus and the Ukraine and some 100 scientists and physicians. The Forum has shown that the death toll so far from radiation is 56; and that there have been some 2,000 cases of mostly treatable thyroid cancer but no observed excess of leukaemia. It is possible that 4,000 more will die from radiation causes, though these mortalities may well scarcely be detectable as a Chernobyl excess in the death statistics across the populations affected. Those of us who have visited the exclusion zone at Chernobyl know that it is neither a blasted heath nor devoid of wildlife. People are also living within the exclusion zone and have been to our certain knowledge since 1994.
This was possibly the worst nuclear accident imaginable. But it is manifestly no guide to the safety of reactors in the West since the disaster occurred in a form of reactor that would never have been licensed in the West and was the result of an irresponsible experiment. It is, in fact, the only disaster anti-nuclear campaigners have to run with and, as such, demonstrates the remarkable safety record of properly designed nuclear power stations. In the UK there has not been a single death from a radiation accident in 50 years generation by nuclear power. It is the safest form of electricity generation yet devised by man.
Decommissioning and waste management
We do not regard the designation of a long-term store for long-term nuclear waste as necessary or vital before a new nuclear building programme is started, though it would make a decision presentationally easier. The nuclear industry has been managing its waste for 50 years. It could manage it better if the Government were to designate a site for a long-term store. The problem is the procrastination of politicians, not the industry’s ability to copy with it safely.
As for decommissioning and waste management costs, we do not intend to permit the loading of the costs of decommissioning and waste management for military, industrial, medical and research operations on to civil nuclear power. The figures currently quoted by the Nuclear Decommissioning Agency (which incidentally rise every time it opens its mouth even though it is supposed to be securing economies through competition) are inevitably gold plated and totally unrealistic. As we have made clear, they are based on the false assumption that all nuclear activity in Britain is to cease, thereby enabling it to return existing nuclear sites to greenfield status. It is a ludicrous notion that military, industrial, medical and research activity in the nuclear field is coming to an end as well as electricity generation when the world is moving to develop the peaceful use of nuclear materials.
Security of supply
After 50 years of generating reliable, competitive electricity without a single loss of life through a radiation accident, nuclear should have no need to make its case in the UK as a means of securing supply. Rather, we consider the onus rests on proponents of renewables, energy conservation and gas to convince us, if they can, that their route will serve the national interest.
There is no shortage of uranium which is about as prevalent as tin in the earth’s crust and in ample supply before any extensive exploration programme is under way. Moreover, 96-97% of uranium and some plutonium can be recovered by reprocessing spent fuel for burning again in reactors. Longer term there is the prospect of fast reactors capable of getting sixty times more energy out of uranium fuel than present reactors.
The way forward
Any responsible party which seeks to secure the national economic and social interest and maintain quality of life must aim for security of energy and especially electricity supply at competitive cost. That requires a new nuclear power station building programme. To facilitate that it needs to:
1 – create a licensing, planning and market access framework within which the private sector can secure long-term contracts to supply clean electricity; this means dealing with the currently damaging regulatory regime which is inhibiting the building of any form of power station;
2 – facilitate the coming together of consortia for new nuclear build
3 – find means of reflecting the environmental costs of different fuels in their prices
4 – resolve the long delay over designating a site for a long-term nuclear waste store
5 – institute vigorous R&D programmes into renewables which offer the prospect, unlike wind, of reliable and economic supplies of electricity; and sustain a vigorous and highly visible energy conservation campaign, recognising the politically uncomfortable fact that if pressure is to be maintained on consumers to reduce their use of energy prices will have to remain high.
6 – develop policies in closest consultation with expert engineers working in the fields: at present the limitations of renewables, energy conservation, CHP and micro-generation and the serious implications for managing the national grid of substantial but unknown quantities of power flowing on to it are simply ignored.
The business case for nuclear
If politicians are serious about securing greater security of supply at affordable cost, they must exploit all the economic technology at their disposal, especially where it reduces carbon emissions. Nuclear fulfils all these functions yet is the one technology that has so far been put on the back burner. British politicians dither over it even though it is clear that the world, and especially the USA, Russia and the Far East, is going nuclear and some European countries, apart from France which is 83% nuclear, are considering doing so.
Procrastination has already damaged Britain’s ability to compete in the civil nuclear sector it once led through loss of skills and by contracting out of a leading-edge technology. The sale of BNFL’s Westinghouse nuclear power station arm to the Japanese just when the nuclear action is getting under way underlines the current anti-business approach. It ignores the prospect of nuclear power providing a secure base for the development of new technology – eg hydrogen. Instead, the current stance seeks to set the clock back, to return to local and certainly disaggregated generation in spite of the massive economies of scale achieved by the creation of a national grid just before World War II.
By any standard of rationality, nuclear should not have to convince politicians of its relevance to a modern economy after proving itself over 50 years. Instead, the onus should be on advocates of renewables, energy conservation and gas to prove they can meet the nation’s needs with the same reliability at no extra cost and more cleanly than nuclear. We consider this to be an impossible task.
It is clear that British business shares our view because of its preoccupation with security of supply. Businessmen know that the most costly, damaging and disruptive power is that which is not available when required. The exclusion of nuclear from any future energy policy puts the economy at unacceptable risk of longer-term brownouts and blackouts.
Summary
The task before the Conservative Party is to decide whether it wishes to serve or run away from the national and global interest. On the evidence available, renewables, energy conservation and excessive reliance on gas present a serious risk to the security of the nation’s economy, quality of life and social well-being. Longer term, nuclear offers greater security of electricity supply at affordable cost while at the same time helping to combat global warming.
We do not consider it is for political parties to despair of going against the grain of public opinion. Their job is to lead public opinion in ways that serve the national interest. In any case, the evidence from opinion polls is that there is a growing realisation that nuclear is necessary.
There is also a compelling moral case for Britain to go the nuclear route. It is surely up to advanced nations to make use of all the economic technology available when it serves a wider global interest in avoiding climate change. The widespread use of nuclear power in developed countries would also help to reduce price pressure across the world on other forms of energy and so ease the growth of developing countries. It may well be that disparities in wealth in the age of televisual communication are a greater threat to global stability than global warming.
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