This is SONE's tenth anniversary year. It was founded in June 1998 to
keep the nuclear flame alive and we have at last been rewarded by the
Government putting an increasingly warmer welcome on the mat for the
development of nuclear power, to judge from Industry Secretary, John
Hutton's remarks.
Last year SONE's AGM took the view that even if the Government delivered in its White Paper, published in January – and it was more forthright than we expected – an independent SONE would be necessary to argue the case for nuclear, given the extent of the opposition. This posed a problem because the dismantling of the traditional nuclear industry and notably BNFL was reducing support and your officers were growing no younger. Both your founding secretary and treasurer, Sir Bernard Ingham and Jim Corner, indicated that they felt it necessary to retire for health reasons.
Accordingly, separate talks were started with the Nuclear Industry Association (NIA) and the British Nuclear Energy Society/Institution of Nuclear Engineers (which are amalgamating to form the Energy Institute) with a view to working out an association with one or other of them.
Unfortunately, the NIA has no provision for individual, as distinct from corporate, membership.
BNES/InstNucE looked to offer a better fit but, since they are both charitable institutions, their charitable status could be compromised by taking under their wing an organisation like SONE that was deliberately established as an independent, campaigning voice.
Talks are continuing with the BNES/InstNucE to see if some mutually helpful arrangements can be made, and we will keep you posted about them. In the meantime, your committee approved in February substantial changes in SONE's management and operations from October, subject to confirmation by the AGM on October 21.
The new secretary-elect is Robert Freer, a member of SONE's committee and a member of the Council of the Institution of Civil Engineers. He is this year's chairman of the Institution's London Region and has worked on the design and construction of all types of power stations. The treasurerelect is Terry Westmoreland, a former member of the Council of the Institute of Chartered Accountants in England and Wales, who has joined the committee.
Your existing secretary will continue to produce the SONE Newsletter and Simon Rippon and Geoffrey Greenhalgh will continue jointly to edit Nuclear Issues. Both journals are to be printed by the Mullet Press, owned by a member, John Assheton, in Banbury.
From October it is intended that Messrs Freer and Westmoreland should become directors of SONE as a limited company along with the chairman, Sir William McAlpine, in place of Sir Bernard and Mr Corner. But it is also intended that Sir Bernard and Mr Corner will remain members of the committee and that Messrs Rippon and Greenhalgh and Gerald Clark, former director of the Uranium Institute, should join it.
In this way, the committee believes SONE's continuation as an independent and revitalised body will be assured.
THE PACE QUICKENS
After our impatience in the February Newsletter following the Government's go-ahead for nuclear, the long drive for a new generation of nuclear power stations has gathered steam. We can encouragingly cite five positive developments in recent weeks and set them out below.
1 - Hutton's nuclear optimism In an interview with the Financial Times on March 6, John Hutton, the Business Secretary, said: "We need the maximum contribution from nuclear sources in the next 10 to 15 years", going beyond the current 18-19 per cent. The Times has mentioned figures of 30-35 per cent, though that is not particularly ambitious since at its post-war peak nuclear power generated roughly that proportion of total supply.
"I'd be very disappointed if it's not significantly above the current level", said Mr Hutton, suggesting that the first new plant could be operational by 2017, a year ahead of the target set in the White Paper. "If we can accelerate the timetable, we should", he said. "We've got to be completely serious about this…we should keep our foot down on the pedal".
He added that investors are queuing up for a slice of the nuclear action, provided that the Government meets its commitment to clear the decks of regulatory obstacles. "I've been very encouraged by the reaction from investors", he said. "It's completely confounded all those who said ‘it's not going to happen'. It's going to happen and in a shorter timescale than our critics predicted".
2 - British Energy in the market In the same interview Mr Hutton dropped the Government's previous commitment to maintain a minimum 29.9 per cent stake in British Energy, now 35.2 per cent. Then on March 17 BE revealed that among the range of options being considered were "a business combination" or an offer for the company, although there could be no certainty that an offer would be made. BE shares promptly soared at a time when the stock market was slumping.
BE began talking to companies interested in the development of nuclear power last year well in advance of the Government's January White Paper. It owns candidate sites for new nuclear power stations, has an established presence in the neighbouring communities and a skilled workforce and believes all this puts it in "a strong position to be at the heart of this process".
In its statement it rehearsed its strategic options in the context of the scale of interest in new nuclear build and the significant investment required. All the major nuclear players and Centrica, owners of British Gas, have been mentioned as possible BE suitors – more evidence of the positive gearing up for eventual action. Reports suggest that offers of up to nearly $4bn (£2bn) are being made for the Government's share.
Any company which bought the Government's whole stake would, under takeover rules, have to make a full takeover bid. This may suggest a more piecemeal approach with companies buying their way into sites for power stations. UBS is advising the Government on investment in new nuclear power plants.
3 – NDA joins the game The Nuclear Decommissioning Agency caught up with the sites game on March 6 when it called for proposals for the use of NDA land, including the building of new reactors, subject to a strategic siting assessment, starting this Spring. It said it wanted to "gauge interest". The deadline for responses is April 3, after which the NDA will work out procedures for competitive tendering.
John Hutton, reiterating that the interest is "strong", said: "Planning applications for new plants are likely to focus on areas in the vicinity of existing sites and so it's welcome that the NDA is making its significant land and other assets available to the market".
The NDA was established in 2005 to clean up the UK's first generation of civil nuclear facilities and owns 19 sites, including Dounreay and Sellafield and those of Magnox reactors. Perhaps one outcome of this process will be a much more realistic assessment of the cost of decommissioning than the £72bn last floated, if only because there is not much point in restoring greenfield status to sites being recycled for nuclear use.
4 – Reactor designs clearance Four reactor designs submitted to the HSE and the Environment Agency by Areva (EPR), Westinghouse (AP1000), GE-Hitachi (ESBWR) and Atomic Energy of Canada (ACR-1000) have passed the preliminary review leading to what is called generic design assessment (GDA). The full GDA for the four will take well over three years in total, but the next stage is likely to require "prioritising" on the basis of which designs "are most likely to be progressed for licensing and construction".
5 – Future waste management Last month the Government set out its scheme for managing and disposing of future nuclear wastes. Operators will need to demonstrate detailed and costed plans for decommissioning and waste management and disposal before constructing a reactor. They will then progressively set aside cash in a secure and independent fund as is the practice in other countries on the basis of a fixed unit price for intermediate and high level wastes to be set at the earliest by the middle of next year.
The Government will take title to the wastes and accept liability for disposing of them, being reimbursed from the fund. It will be advised on fees in each case by a new Nuclear Liabilities Financing Assurance Board. Operators will have to make their own arrangements for handling low-level wastes and fund their disposal as they go along.
MORE INITIATIVES
We could have added another two developments to that list of positives for nuclear power – our belated membership of the Global Nuclear Energy Partnership (GNEP) and a post-Easter deal between Britain and France to construct a new generation of nuclear power stations and export the technology around the world to combat global warming. The latter was one of a number of initiatives forecast to come out of the Anglo-French summit in London between Gordon Brown and Nicolas Sarkozy, the French president.
The UK became the 21st member of the GNEP in February, confirming the Government's new approach to nuclear power. Its absence had been a matter of comment. Now it includes all the countries that pioneered nuclear power in the 1950s, all permanent members of the UN Security Council, all the major uranium exporters apart from India and all the countries with reprocessing facilities.
GREENPEACE: WE CONCUR
We never thought it would come to this, but we have to say that we agree with Greenpeace. With carbon capture and storage technology at best many years away from operation, Government approval for the proposed new Kingsnorth coalfired power station would undermine the UK's chances of cutting CO2 emissions. At the same time, we can understand John Hutton's support for the project and why the Cabinet is reported to be split on it.
More than 10 years' neglect or procrastination over future power supplies – and ridiculously idealistic "Green" notions of "alternatives" to nuclear which still have their adherents in Cabinet – have left the UK at risk. Coal at least generates reliable if dirty electricity and the Government's timetable for nuclear development (which Mr Hutton hopes to beat) leaves few other routes to salvation without walking into Mr Putin's gas trap.
Greenpeace's problem is that, in its irrational objection to nuclear, it holds to impractical, unproven or unreliable (and so relatively dirty) sources of supply that would bring about exactly the opposite of its intentions – unless one of them is to starve us into holy cleanliness.
THE DEVIL'S DISCIPLES
Last year's AGM view that the world still needs a SONE considering the opposition to nuclear has been heavily underlined by The Independent on Sunday and London's Mayor, Ken Livingstone.
The newspaper, bemoaning our place near the bottom of the European league for exploiting renewables, discharged this burst of venom: "…the nuclear industry – and, more particularly, a treacle layer of atavistic atomophiliacs in the civil service which seems to persist and reproduce despite changes in departments dealing with energy – is largely responsible for this scandalous situation. There is plenty of evidence that the proper development of renewables in Britain has been stifled lest it pose the slightest threat to the nuclear dream".
Then Mr Livingstone, furious because he feels blocked by civil servants from moving London to local power generation and CHP, told the Observer: "The people in the Department of Energy have done everything possible to block decentralised power. All these civil servants know that when they retire there'll be a job for them on the board of BNFL. They know Greenpeace isn't going to give them £40,000 a year for doing two days a week on the bloody board, and so they're covering their arse for the future, and advising Ministers accordingly".
Hell hath no fury like the deluded scorned.
ADOPT A POLAR BEAR
The Mayor might feel better if he adopted a polar bear or an orang-utan, elephant, tiger, dolphin, rhino or a panda. According to an e-mail we have received, the World Wildlife Fund offers the whole range. It's £2.50 a month to adopt a Svalbard polar bear.
SOUTH AFRICAN EXAMPLE
A member, Dr P E Hodgson, of Corpus Christi College, Oxford, spends some months every year in South Africa. He has experienced first hand its random power cuts. "The consequences", he writes, " are that universities are paralysed and shops forced to close, Refrigerators in supermarkets fail and meat and fish have to be thrown away. The fruit crop is threatened because of the failure of refrigerators in storage depots.
Many of the larger mines have closed as it is too dangerous to continue when power cuts are likely.
"The nuclear accelerator at Faure, used to treat cancer patients and for experiments in nuclear physics, has been shut down because of the likelihood of power failures. Traffic lights also fail, delaying traffic and greatly increasing the chance of accidents.
"About 10 years ago it was proposed to build more nuclear power stations in South Africa but this was defeated by the Greens. About that time, I gave an invited lecture on the energy crisis and I was vehemently opposed by those who maintained that all South Africa's needs could be met by building windmills and solar panels in the Karoo desert. Already those who oppose nuclear power have the deaths of thousands on their consciences, quite apart from the devastating effects of climate change. Do we want the same to happen in our own country?"
NEW BUILD REPORT
SONE patrons who attended a lunch last September hosted by one of their number, Damon de Laszlo, were given a preview of the outcome of research into new nuclear build conducted for SONE by Nigel Hawkins, an investment analyst. Now his study, "New Nuclear Build in the UK – the criteria for delivery", has been published by the Economic Research Council of which Mr de Laszlo is chairman.
Mr Hawkins concludes that new nuclear build can probably be delivered only by France's EdF or by the German-based E.On or RWE. While BE owns the key sites, it modest size and low market valuation mean that its role may be limited. To enhance the prospects for new build, by minimising the cost of capital, he says the Government may need to issue a financial indemnity for the accruing debt on Network Rail lines and require electricity suppliers to sign up to a long-term nuclear purchasing obligation, especially if the EdF decides not to participate.
By incorporating the projected costs of the four plant types that have cleared the first licensing hurdle, Mr Hawkins has constructed a "virtual model" based on four units, with an allowance for first-of-a-kind costs. The overnight capital costs works out at £1.5bn per 1,250MW unit. On the basis of operating costs of 1.16p per kWh – including front end and all back-end fuel expenses, O&M and plant decommissioning – and a weighted average cost of capital of 7.5 per cent (70 per cent debt and 30 per cent equity funding), he estimates unit costs at 3-3.4p per kWh on a 40 year-lifespan.
In a foreword your Secretary says that Mr Hawkins' assumptions are not generous but they put in perspective the telephone-number figures bandied about for waste disposal and decommissioning.
Members wishing to have their own copy of the report should telephone the Secretary on 020- 8660-8970 or e-mail
STILL PLACES
There are still places available for the visit by up to 30 SONE members to the HQ of the National Grid near Reading on Thursday, June 5. The visit will begin at 11am and include a briefing on the work of the National Grid, a tour of the control room and a period for questions, followed by lunch. This will give members an opportunity to assess the problems of balancing supply and demand inherent in some renewable sources of energy and the likely adequacy of future supplies.
Directions and security arrangements will be given later. Those wishing to attend who have not already informed the Secretary should get in touch with him on the number/address given in the previous paragraph.
Because of successive changes, much of SONE's literature gives incorrect information about contacting us. The Acting Secretary is Sir Bernard Ingham at:
