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2006 Nuclear Issues v28 10 |
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Written by Nuclear Issues
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Sunday, 01 October 2006 |
Nuclear Issues is also available as a pdf download
Now its BNFL to go
British Nuclear Fuels plc (BNFL) which is now mainly British Nuclear
Group is to be disposed in bits and pieces. This is virtually the end
of the British nuclear industry and one of our proudest and most
successful companies. The main part of the business up for sale is the
Nuclear Decommissioning Authority – the pulling down business – which
is charged with running and clean up of the Sellafield site and the
Thermal Oxide Reprocessing Plant (THORP). The BNG’s Reactor Sites
business comprising all of our first generation of highly successful
Magnox nuclear power plants will be sold as a whole. Earlier the
US-based Fluor corporation offered to buy the whole of BNG for £400
million.
Although we have nothing against them, this would be a shameful amount
to pay for THORP and its mixed oxide fuel fabrication business and the
Magnox reactors, which although nearing retirement, have still got
several years of earning power left.
Reprocessing in the US
Slowly, with encouragement from the French and technical support from
Areva, the US is starting to consider reprocessing of spent fuel to
recover the extra 25% of energy and to reduce high level waste volumes
by four or five times.
A report carried out by the Boston Consulting Group for Areva Inc (the
French company trying to enter the large US market for new reactors)
shows that recycling of fuel in the US using the reprocessing
technology developed in France, the UK, and Russia (and now also in
Japan) would be competitive with direct disposal of used fuel. There
have of course been a few enthusiasts in the US who have said this for
a long time, but the majority of the nuclear industry was persuaded by
phoney arguments about proliferation risk and economics to adopt the
alternative of storing high level waste in the form of spent fuel
(direct disposal). It was said that the price of uranium would have to
double to make the mixed oxide fuel separated by reprocessing
competitive with new enriched uranium fuel. Well the price of uranium
is near to doubling and everybody is rushing around to find new
suppliers.
The study considered a 2500 t/yr plant in the US involving a capital
expenditure of $16 billion. This could be comfortable met from the
accumulated funds of electric utilities set aside for waste disposal.
As well as providing 25% more energy from the uranium dug out of the
ground, it would reduce the volume of the waste to be disposed of in
the Yucca Mountain Repository which is being built. The study estimates
a four or five times reduction in the volume of waste – Nuclear Issues
normally claims more like eight times, but we will go along with their
estimate for now.
Another feature when all the world is getting anxious about increasing
the efficiency of our industries because of global warming, is the 25%
increase in efficiency of fuel recycle. It could be a lot more, first
by the recycle of reprocessed uranium and then by a massive sixty times
by use in fast reactors.
So what of the UK response to all this? Sell the group with technical
expertise in the field and decommission THORP as soon as possible.
Energy security
Speaking at the ceremony for the official opening of the Langeled gas
pipeline from Norway Tony Blair declared that “energy security will be
almost as important as defence”. There is however a fundamental
difference in the Government attitude towards the two sectors. For
defence the finance of the armed forces and the initiative for the
development and procurement of military weapons systems are firmly
under the control of the Ministry of Defence. It is inconceivable that
the army would be (entirely?) replaced by privately run mercenaries or
that our air defence (and offence) be passed to British Airways, Virgin
or EasyJet. Yet, despite The Prime Minister’s assertion, the equally
vital sector of our energy supply is left entirely in the hands of
commercial companies. The Government, which seems prepared in the name
of defence to undertake the development of new nuclear weapons systems
to replace Trident, is content, even makes a virtue of the fact, that
the responsibility for a new nuclear power programme is left entirely
in the hands of the power companies, now largely foreign owned, who
must always place their own profitability above the national interest
of the UK. This is at a time when it is becoming increasingly plain
that our energy security can only be assured through a large and
continuing expansion of nuclear power.
The Government arguement is that its role is only to set the framework
for energy policy and leave it to private industry to implement any
programmes. Setting the framework includes limiting planning inquiries
for new stations to matters of local concern so that they do not drag
on interminably as at Sizewell; prelicensing of new station designs;
resolving responsibilites for the decommissioning of stations and
disposal of radioactive waste; and implementing a workable carbon
trading agreement.
But if these measures do not provide a sufficient incentive for the
power companies to build a sufficient nuclear capacity without any
further delay – which could put our energy security at risk – what more
can or should the Government do, knowing that they will surely be held
responsible for any shortages or interruptions in the supply of
electricity? This is not a question of subsidies. Nuclear power is
already competitive with other fuels. The missing element is confidence
that Government policies and attitudes will not change. This has yet to
be established.
Looking at the rest of Europe it is obvious that it is only in France,
EDF as the national electricity authority is assured of the continued
support of the French government that nuclear output has expanded to
the point where it provides almost 80 percent of French electricity.
This is not necessarily an argument for renationalising our own nuclear
industry but all experience shows that without full government backing
privately owned nuclear stations are always at risk of changing
policies and attitudes, particularly where coalition governments
attempt to gain the favour of extreme environmentalist parties. In the
light of the planned phase-out of nuclear power in Germany (that this
may shortly be rescinded only underlines the uncertainty under which
the private industries operate) it is not surprising that RWE and EoN
should be wary of commiting themselves to build nuclear stations here.
In Switzerland the continuation of the nuclear programme has faced the
hazard of repeated attempts in public referenda to shut it down (so far
without success). In Sweden it is the privately owned Barsebäck station
that has been closed under the policy adopted after a public referendum
carried out as a response to the Three Mile Island accident in the USA.
And had British Energy still remained in government ownership it is
most unlikley that the DTI would have been able to oversee its collapse
and the forced disposal of its very profitable North American
investments. The Government haste in selling off BNFL, in particular
its Westinghouse division, at a time when a growing world expansion of
nuclear construction is about to take place, only emphasies its
hostility to any association with the nuclear industry.
As long as the Government continues to pander to the heavily subsidised
renewables lobby and to make improbable claims for energy efficiency as
a means of reducing energy consumption, it is unlikley that any private
company will be eager to commit the large initial expenditure of a
nuclear plant which can only be recovered over 40 or more years of
operation. The Government must somehow make plain a whole hearted and
continued commitment to nuclear power.
As the DTI has to approve all applications to build new power plant it
should be possible for it to ensure that a sufficient capacity of
non-fossil fuel base load plant (nuclear) is put forward. If necessary
the National Grid could step in and call for tenders, as it is required
to do under its responsiblity for holding a short-term reserve to meet
unexpected events (a disruption of gas supply?) or short-term
imbalances. This may require some guarantees to the companies of
financial compensation should a future administration at any time, over
the long life of a nuclear station, change the rules under which they
operate. A framework is not enough, someone must be encouraged to plant
the seeds with the confidence of knowing that they will be allowed to
grow.
Gas security
The National Grid forecasts an average increase in annual gas demand of
2.2% per annum through to 2014, with an import dependency of 46% by the
end of the decade, rising to around 80% by 2014-15. This explains the
importance of the Langeled gas pipeline which is intended to provide
about 20% of the UK gas requirement for the next 30 years, carrying
some 20-25 billion cubic metres/year of gas from the Ormen Lange field
in Norway.
With this development Norway, with gas exports of 100 billion cubic
metres/year, becomes the world’s second largest exporter of gas after
Russia. While Norway is seen as a reliable European trading partner,
exporting at this level raises questions of how long supplies of gas
will continue to become available. The oil companies participating in
the project presumably have no doubts on the viability of the project,
although some estimates suggest that there may only be sufficient gas
at this rate of export for some 25 years. Another uncertainty is
whether Norway, a small country, will wish to continue as a major oil
and gas supplier at a time of threatened oil shortages. Norway has
already built up an oil fund said to be about $200 billion.
Rather than continue to add to this fund, whose value may decrease if,
after peak oil, a world-wide recession sets in, the Norwegians may wish
to keep more of their oil and gas for their own use. In addition
increasing Norwegian exports of LPG to the USA and other rich markets
may have a bearing on the price of gas supplied to the UK.
Langeled will certainly increase the security of gas supply in the
short term but uncertainties could later emerge. It will in any case
only account for 20% of requirements. There could be doubt about the
reliability of the remaining 60% of gas that will be imported by 2015.
The UK is at the end of pipelines passing through Europe and it would
be optimisitic to assume that at times of a general European shortage
much would be left to deliver to the UK.
The DTI somewhat naively believes in the price mechanism as a means of
regulating the balance between supply and demand and argues in a
consultation paper on security of gas supply (http://
www.dti.gov.uk/consultations/page34643.html) that if suppliers do not
have sufficient gas to deliver on their contracts they must pay an
imbalance charge amounting to the marginal cost of buying gas on the
system that day, thus exposing themselves to potentially very high
costs. This is intended to provide shippers with an incentive to
acquire a portfolio of contracts and assets which will enable them to
provide a sufficient, flexible, competitively-priced source of gas when
needed, even when demand is high. But in the event of world gas
shortages, competitively-priced gas is unlikley to be available.
Bankrupting the gas supply companies will not solve the problem.
Construction of additional on-land gas storage facilities would
increase security against short-term (cold winter) supply problems, as
would an increasing reliance on LNG, with the construction of new
import terminals. But with an ever-greater world competition for LNG
this could be costly. The energy losses in liquifying and regasifying
as well as in transport should also be considered. Production from the
UK sector of the North Sea could also fall off more rapidly than is
assumed. Even the DTI believes that there could be problems with gas
supply after 2015.
Electricity security
According to the 2005 Energy Review 37% of UK electricity comes from gas, 34% from coal, 20% from nuclear, 5% from renewables.
The analysis above shows that there could be problems with gas supply
and higher prices, particularly after 2015. Gas prices for forward
delivery have risen from around 30p/therm in 2004 to 70p/therm in 2006.
The cost of gas is the main factor (60 percent) in the cost of gas
fired electrcity. Already last winter, because of the high gas price,
electricity generation was in part switched from CCGT stations to coal
stations, reversing the positions of coal then 37% and gas 33% in their
share of electricity supply – with a consequent rise in carbon dioxide
emissions.
Restrictions on gas supply would have an impact on electricity
generation as about 30% of CCGT stations are on interruptable
contracts. The DTI consultation paper on the security of gas supply
anticipating this problem looks to the use of distillate oil as a back
up or short term substitute for gas. It notes that now CCGT has oil
back-up fuel and storage capacity for only about 5.7 GWe of the
existing 25 GWe total CCGT and urges that this should be increased. But
the cost a back-up fuel capability for 75 days for a 400 MWe CCGT
station is put at £44 million – costs that are likely to be passed on
to cosumers in higher prices. Interruptions in gas supply and/or steep
increases in price however could well be expected with increasing
competition for fossil fuels after world oil production has peaked, in
which case the price and supply for distillate oil would also be
affected, leaving the UK open to the severe economic disruption that
would occurr. The DTI paper estimates that the cost to industry of a
one day interruption in gas supply could be £235 million, while a
6-week interruption to gas supplies could be of the order of 1% of GDP.
For coal-fired generation the problems stem not only from the high
carbon dioxide emissions – up to about 800-1000 g/kWh – but also from
emissions of sulphur and nitrogen oxides. Under EU regulations to
reduce these acid emissions 8.2 GWe of coal plant (28.5%) of present
coal capacity) will have to close after 20 000 hours of operation or by
end of 2015, which ever comes first. How or by what will this plant be
replaced? There is much talk of carbon capture and storage but this has
yet to be demonstrated for a commercial plant. This could be difficult
as some estimates suggest that it will at least double the cost of
electricity. As with new nuclear build the Government leaves the
initiative to implement this technology entirely to the private sector.
It is said the EoN is contemplating the construction of a state-of-
the-art coal fired station that would include carbon capture and
storage, but as yet no firm plans have been announced.
Closures of the present nuclear stations are also planned. All the
remaining four Magnox stations totalling 2.284 GWe are due to close by
2010. These will be followed by four AGR stations, totalling 4.770 GWe
to be clossed by 2014 with a further three AGRs by 2023. The last
remaining station, Sizewell B PWR 1.188 GWe is due to close by 2035.
While the risk of early closure of one or more of the AGR stations
cannot be excluded the recent 10 year life extension approved for
Dungeness B by the Nuclear Inspectorate, if applied to other stations
would provide valuable time in which to bring new nuclear plant into
operation. Sizewell B on a fifty year life could be operating until
2045.
This does not however lessen the urgency of acting without further
delay. With the certain closure of 8.2 GWe of coal plant and 2.284 GWe
of old Magnox stations a minimum of 10.5 GWe of new plant will be
required to be in operation before 2015 – in only nearly 8 years. This
is a much more urgent problem than outlined in the Energy Review which
puts the need for new plant at 25 GWe by 2026, with the implication
that we have a relaxed 20 years to find a solution. As it is we might,
if immediate steps were taken, just have time to complete perhaps one
or even two 1.6 GWe nuclear plants with more to follow without too long
a delay.
The more probable and more depressing outcome is that with its
hands-off approach the Government will continue to dither for a few
more years before, faced with immediate shortages and higher prices for
gas, it suddenly awakes to the seriousness of the situation and
authorises the panic building of coal-fired plants.
There will by that time be no full scale demonstration of the
feasibility of carbon capture and storage so goodbye to all pretence to
reduce carbon emissions.
Russia still needs nuclear
While happily accepting reliance for security of our gas supply on
Russia we ignore the fact that that country still has a large nuclear
programme planned. Why do they need nuclear energy if they have got gas
enough to export? Does it not suggest that they perceive a time when
they won’t have a surplus and then the first to be cut short will be
the UK at the end of their pipeline.
The Russian government has formerly adopted a 1471.4 billion rouble
($54.7 billion) two stage nuclear energy development programme. The
main aim of this programme is to ensure energy security. The programme
also aims to promote Russian nuclear fuel cycle enterprises in the in
international markets (The UK has sold, or is selling, nuclear fuel
cycle capability as fast as it can).
The first stage of the programme from 2007 to 2010 includes: two new
VVER-1000 units at Rostov-2 and Kalinin-4 starting up in 2009 and 2011;
commissioning of the BN-800 fast reactor at Beloyarsk-4 by 2012; and
standard VVER units at the Lenningrad station and at Novovoronezh-6.
Two of the three units for Lenningrad will be the first of the phase
two programme which aims to build at least 2000 MWe of nuclear capacity
per year in Russia from 2009. By 2015 there are expected to be ten new
reactors totalling at least 9.8 GWe operating and another ten will be
under construction.
This hardly sounds like the programme of a country that will be
supporting security in the UK by exporting surplus gas. It may be that
they will be making enough money from exports of gas to finance the
nuclear programme though this sounds a little devious even for Russia.
Tied by politics
Angela Merkel, Chancellor of Germany, is clearly in favour of a
reversal of the silly phase out plan for nuclear plant which would call
for all capacity to be closed over the next 14 years. This she says
would be a mistake. But the agreement made when a tenuous coalition was
formed between her Christian Democrats and the Social Democrats was
that if they faced disagreement on a policy it would stay as it was for
the time being. Speaking at a party rally in Wisebaden she said: “ I
consider it to be wrong that we’re turning off our nuclear plants only
because that is what agreed.” She indicated that although the Social
Democrat still maintain this to be an important issue the conservative
members could still push for a review of the phase-out policy.
Finland going for six
The country that is building the largest reactor in the world is
thinking about another. A Suomen Gallup poll has found that 91% of the
population believe wisely that the country should not increase its
electricity imports from Russia and 59% say instead they should build
what would be the country’s sixth nuclear reactor.
Assuming it is another of the same 1600 MWe European Pressurized Water
Reactor (EPR) as number five, Finland will have 5700 MWe of nuclear
capacity and if they continue to get the first class performance from
the new reactors – which there is no reason to believe they will not –
they should more than double the 25% of electricity presently generated
from nuclear. Thank goodness for some right minded people.
Brazil thinks about six
If President Luiz Inacio Lula da Silva wins a second term of office on
29th October then plans for nuclear expansion may go ahead. There is
talk of six new nuclear reactors including Angra-3 and five more units
at a possible cost of $18 billion. Brazil currently generates about
2.5% of electricity from nuclear power.
The expansion could more than double that share to 5.6%.
Choice of three in Japan
The third contender for nuclear power plant business in Japan,
Misubishi Heavy Industries (MHI), is talking to France’s Areva about
cooperation in building of advanced pressurized pressurized water
reactors.
Previously they had tended towards partnership with Westinghouse. But
the recent acquisition of Westinghouse from BNFL by Toshiba means that
their main competition is now the AP-600 and 1000. The other Japanese
participant, Hitachi, is clearly tied up with General Electric and the
Advanced Boiling Water Reactor (ABWR). The alliance with Areva could
help MHI to develop an alternative evolutionary PWR as a third
competitor and give Japan access to all three of the leading third
generation reactors. MHI could also strengthen the French companies
efforts to get the European Pressurized Water Reactor (EPR) accepted as
a third choice in the US market where electric utilities are lining up
to place orders in the next one to two years time.
MPs in favour
Construction of new nuclear power plants is supported by 61% of Members
of Parliament according to a Ipsos MORI poll conducted on behalf of the
Nuclear Industry Association (NIA). Only 22% were directly opposed.
The big change is among Labour MPs where there is 60% support compared
with only 35% in 2005 and opposition is down from 45% in 2005 to only
23%.
The reasons given by MPs for their changed attitude are security of
energy supplies, 37%; realisation that renewables will not fill the
gap, 18%; reducing dependence on fossil fuels, 15%; safety, 15%; and
the need for a balanced energy policy, 12%. A massive 81% consider that
nuclear will be a major contributor to the energy future in the UK.
Almost inevitably 78% believe that the implementation of effective
policies on nuclear waste would be necessary before proceeding with new
nuclear build. |
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