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2008 Nuclear Issues v30 5 |
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Written by Nuclear Issues
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Thursday, 01 May 2008 |
Nuclear Issues is also available as a pdf download
Energy and the economy
The continued growth of the economy of the industrialised countries
since the time of the industrial revolution has been made possible by a
continued expansion of energy consumption. The dire predictions of
Malthus were, at that time, for a restricted economy limited by the
availability of wood fuel and human and animal power. These limitations
were removed when the industrial mining of coal broke the restriction
on energy supply and fuelled a continuing expansion of economic and
population growth. In meeting the everincreasing demand for energy,
coal has been supplemented with oil and gas, while an ever greater
share of delivered energy comes as electricity including hydro power,
and now nuclear power with a minor contribution from the renewable
energies. There is a direct correlation between the economic growth of
the world’s industrial countries and their electricity consumption
which has enabled an ever-increasing world population to enjoy
ever-higher standards of life and a greater life expectancy.
Confidence in this continued economic expansion, which has been taken as a natural progression – our right – is now threatened by the realisation that the hitherto continuous increase in the supply of a major energy source, oil and gas, is now approaching a peak.
What oil remains, left in known deposits, or expected to be found in possible deep ocean fields, the arctic or as unconventional tar sands, will be ever more costly to extract and may not be available in a timely manner to replace the declining output of conventional oil.
For the first time since Malthus there are fears that the continuous economic growth based on an ever increasing energy supply may be stuttering.
The effects of this could be devastating. The major world economies are based on mountains of debt. Everincreasing amounts of money have been lent by the financial institutions, mortgage companies etc on the assumption that they will be repaid at some future date with interest. Personal debt in the UK alone is said to be over £1.3 trillion. It is then not surprising that the present fears of a world recession were triggered by and blamed on the notorious American ‘sub-prime’ mortgages, packaged and sold on, which it is now feared may never be repaid. The underlying cause however is not the dubious mortgages themselves but the growing realisation that the continued expansion of the American economy depends on increasing imports of oil and gas which are likely to become more of an economic burden if they are to be paid for in a harder currency (the euro?) rather than by printing dollars. A wealthy, socially responsible nation with a healthy economy should be able to make credit available to lower paid workers and even to the small number of denigrated Ninjas (no income, no job, no assets) who should not be left in poverty. The repayments may take longer but they would eventually be made.
The contagion of these fears was spread to most of the Western world as large amounts of these poor quality American loans were packaged into sophisticated tradeable securities with funny names SIV’s , CDO’s etc and sold on to greedy banks who saw risky debt as potentially more profitable than good debt: the latter is more expensive to acquire and will never be worth more than par while the subprime packages were heavily discounted and optimism about repayment prospects led to high resale prices. But this optimism failed to be realised as doubts over the future of energy supply and a consequent slowing of economic growth spread.
The response of governments and financial authorities by making ever more credit available to failing banks may buy a temporary alleviation but in the longer term is only likely to make matters worse unless the world’s energy supply is increased accordingly. The root cause of the problem is not a lack of credit but fears of a lack of energy and in particular of electricity. The governments of the industrialised countries must restore confidence that the supply of electricity will always be available at an affordable price to fuel the economic expansion that is required to carry the mountain of debt.
There is a causal relationship between energy usage and economic growth. There is little that can be done to increase oil and gas supply. The large increases in price have not been matched by an increase in output; appeals to Saudi Arabia and other oil producers to pump more oil are unlikely to meet with a positive response; and as Opec and the other oil producers see their oil receipts expanding and become more wealthy they are consuming more themselves and exporting less. Although China, India and other rapidly developing countries are burning more coal to generate electricity fears of climate change and global warming will limit the future consumption of coal; limitations which the high costs and doubts over permanent safe storage of carbon dioxide will not remove. Renewable energies may only make a minor contribution; with the uncertainty of delivery and low load factors of around 25% they are unsuitable for the electricity supply of an industrial country. Biofuels are now seen as in competition with food. The underlying cause of the fears that the growth of the economy is faltering is not a shortage of capital but of energy. The slow decline of oil supply from a peak is seen as a severe shortage as the potential demand for energy continues to increase to fuel the expansion of the economy driven by the need to finance debt. The world has no alternative but to turn to the new energy source, nuclear power if the recession now facing us is to be overcome.
For the UK the government should now facilitate an immediate rapid expansion of nuclear output; require that existing nuclear stations are kept in operation for as long as possible consistent with safety; seek acceptance from the EU in delaying the shut down of older coal-fired stations until the new nuclear capacity becomes available; and require that generating companies carry sufficient spare capacity to meet any interruptions in supply and variations in demand.
It is however plain that economic growth cannot continue indefinitely. Much of the opposition to nuclear power arises from fears that it would lead to an over-populated world devoid of natural resources.
While the immediate need is to avert the chaos that would ensue if the world economies collapse under the burden of debt there must thereafter be some restraint on the desire of an ever-growing world population for an ever-higher standard of life. A solution could be to use the causal relationship between electricity consumption and economic growth as a means of regulating the expansion of money supply.
Hinkley Point
The news that EDF has bought a site adjacent to the present Hinkley Point A (Magnox) and B (AGR) nuclear stations should revive interest in the Hinkley Point C inquiry, when in 1990 the inspector Michael Barnes QC recommended that “the Secretary of State for Energy and the Environment should grant consent …” for the extension of the Hinkley Point nuclear power by the construction of an additional pressurised water reactor generating station.” This permission was never taken up but even now some 18 years later the main issues on which the Inspector came to this conclusion – the need for new capacity; diversity and security in the event of rising prices or an interruption in supply of fossil fuels supplies; a reduction in emissions of carbon dioxide with fears of global warming, and improvement of air quality and reduction of acid rain from emission of sulphur dioxide – are still valid. It is these same issues, with fears of an over-reliance on uncertain supplies of imported gas rather than coal and an ever increasing concern about the effects of climate change which has led the Government to indicate that it would approve the construction of new nuclear stations.
The main issue is now not in question; new nuclear construction is now Government policy. But it is worth dusting off old copies of the report to confirm that Hinkley Point is still an acceptable site for a new station. There is much in the report and the Inspector’s recommendations relating to the local issues which is still valid and could now be accepted without the need to reopen the whole question, should EDF seek to build a new station on their site. These include matters such as the construction of a temporary workers hostel and new 400kV substation: the realignment of transmission lines; construction of a new sea wall with indemnities to those affected; consultation with the local authorities on the limitation of noise, fume and dust and transport routes during construction; as well as an archaeological assessment of the site, landscaping, etc. These may be minor matters in themselves but they will be of considerable concern for the local community. Much time could be saved and problems dissolved if all of the inspector’s recommendation were re-examined and adopted where still appropriate, eliminating the need for any further examination. The time, effort and costs of the inquiry almost 20 years ago should not be wasted.
Costs of decommissioning
Another ridiculous story about the high cost of decommissioning. So what does the BBC do about it? ‘Oh we’ve got some pictures of that. Run them.’ So we get the pictures of blowing up a couple of cooling towers of the Calder Hall reactors. These have absolutely nothing to do with the cost of nuclear decommissioning. The cooling towers would be the same if it were a coal fired, oil fired or gas fired power station.
The impression that somebody is trying to give is that the cost of pulling down a new nuclear reactor would also be horrendously high. They would not. As we have mentioned several times recently the cost of decommissioning first generation gas cooled reactors, which were designed back in the early 1950’s, was found by the International Atomic Energy Authority to be at least ten times higher than a current generation light water reactor. New third generation nuclear plants are said to be even lower and all the waste management and decommissioning charges are included in the normal operating costs during the life of the station.
The Calder Hall reactors have in fact generated a wealth of money over their 50 year life. First they were part of the military programme and produced plutonium for British bombs. It may be possible for some of those who walked on the first Aldermaston march to say in the post cold-war era that these where not needed. But democratically elected governments of both political persuasions have decided that they were and still are needed. What ever you believe that is the case and Calder Hall in its early years was optimised to produce plutonium. This involved leaving the fuel in the reactor for only a short time to obtain the best isotopic mix for bomb making.
But way back in the sixties we had enough plutonium and the reactors were optimised for electricity production. This involved leaving the fuel in the reactor for as long as possible. Over the years the reactors have generated million and millions of pounds worth of electricity. The accountants manage to set that against escalating capital charges but in actual fact they generated some real money for British Nuclear Fuels plc (BNFL) which was no doubt put to good use.
The point of escalating the capital charges is to allow for the fact that they might have invested in some cheaper alternative. Well they did. Some years ago BNFL invested in a gas fired generating plant. And how much is that costing today? We hardly dare think.
The Calder Hall, and the Chapplecross reactors, should have been given a really grand send off in recognition of their great service to this country. Instead they were quietly shut down and are now being used by the BBC to try to show that the cost of future nuclear power will be astronomic.
Spilt Milk
The 2007 annual report and accounts for Bruce Power show that at the end of that year it had total assets of 5 154 million Canadian dollars (£2 643m) with a profit before tax of C.$487 million. The average capacity factor of its nuclear stations was 86%. This is the failing Ontario nuclear power company in which British Energy had acquired an 82.4% interest through a rental agreement and which it had been forced to sell by the DTI under the terms of the notorious ‘reconstruction’ for £275 million in February 2003. The purchasers were a consortium of private companies including a Canadian uranium producer and employees organisations. This sale price, which represented a net loss to BE which had already invested in renovating the plant, has been dramatically turned around. Bruce Power has increased the value of its purchase almost tenfold in less than five years. It is even more galling that this result has been achieved under the leadership of a former director of British Energy, Duncan Hawthorne, who left the company at the time of the reconstruction.
This continued growth can be expected to continue. The original lease to BE was for 18 years with a possible extension for a further 25 years. Six of the original Bruce reactors are now in operation with plans to restart two more to bring the total capacity up to 6 200 MWe.
Bruce Power is now looking to expand expand beyond Ontario. It has bought the assets of Energy Alberta and will be able to bring nuclear power to western Canada.
It is no use crying over spilt milk but we should at least try to learn the lessons from this ruinous disposal of the UK’s nuclear assets by the Government. It seems that this, and other decisions by the former DTI (such as the sale of BNFL’s Westinghouse division) were motivated primarily by fears and suspicion of nuclear power under the influence of the anti-nuclear lobby. Is there no way in which former ministers, their special advisers, and their civil servants can be held responsible for the losses they incur? And Toshiba Toshiba of Japan to whom we sold the Westinghouse company is also showing great progress. The company expects orders for 33 large nuclear power plants by 2015. Its nuclear division says that it already has orders for four Westinghouse AP-1000 units in China and another eight units close to firm orders in the US. And where else is it hoping to sell. Right here in the UK.
The annual sales target of the nuclear division is 1 trillion Japanese yen ($ 9.6 billion) in 2020.
Italian job
There was a brief period when Italy was third in the world for exploitation of nuclear energy – after Britain and France and ahead of the US, Japan and Russia.
Recognising that the country was uniquely placed for using this new source of energy, Italy built three early plants: the Latina plant using a British design of gas cooled reactor; Garigliano using a small US boiling water reactor; and Trino with a pressurized water reactor which played an important role in proving US designs of fuel for future reactors. Later they built and put into operation a larger second generation boiling water reactor at Caorso and they had started construction of the first of a string of standardized pressurized water reactors at Montalto di Castro. They also participated actively in the building of the Superphenix fast reactor in France and were expecting to take a third of the 1200 MWe of electricity before that plant was halted by a brief period of balmy French politics. The Italians were also lively participants in international conferences having encountered and solved many technical problems.
Then came Chernobyl and the Italian people reacted badly. They voted in a referendum on two seemingly unrelated questions one of which brought the whole nuclear industry to a standstill.
Now once again there is a glimmer of hope under the new government of Silvio Berlusconi. The new minister of economic development, Claudio Scajola, told a recent meeting of the Italian employers’ association that the government is planning a new generation of nuclear power plants. Let us hope that the government remains in power long enough to keep its promise because Italy certainly needs some new source of energy.
THORP running again
Its taken an agonising two years to repair a leak at the Thermal Oxide Reprocessing Plant (THORP) at Sellafied but it is now reported to be reprocessing spent fuel again. So why are we not selling this service to the nuclear industry world wide. We used to be so proud of it but now it sounds like a nasty word.
A few years ago it was predicted that oil and gas prices and the prices of uranium and enrichment services would have to rise by four or five times before it became economical to recycle reprocessed fuel in mixed uranium-plutonium oxide (MOX) fuel. Well they have increased by at least ten times so why are we waiting.
There should be dozens of nuclear operators sitting on casks of spent fuel with nowhere to send it. Why should they not recycle it? Not only do we have the reprocessing plant but we also have an integrated MOX fabrication plant.
Even in the US they are starting to produce MOX from unwanted military plutonium in a French designed plant. So why not the rest of their spent fuel for which no other repository is going to be available for some years yet. Why should they not be interested in earning a few bucks rather than paying the government 1 mill per kWh year after year?
Finland’s sixth getting closer
Fennovoima, the Finish company formed to build the country’s sixth nuclear reactor is showing itself to be very serious. It has selected sites and carried out the environmental impact study required by government before it will consider and application. Now they have nominated three reactor designs from which they will choose the plants. They are the Areva design of European Pressurised Water Reactor (EPR) similar to the 1600 MWe plant under construction in Finland, the SWR-1000 advanced boiling water reactor which was originally developed by Sweden and an Advanced Boiling Water Reactor offered by Toshiba though based an American General Electric design. It is interesting that they have chosen large evolutionary designs and apparently rejected the smaller Westinghouse AP-1000 passive design of pressurized water reactor.
Another EPC contract
Two more AP-1000 reactors have been awarded a $9.8 billion engineering design, procurement and construction contract in the US. Although this for some reason is not yet classed as a new power plant order it certainly looks like one to us. Last month it was two AP-1000 units for Southern Nuclear Operators Vogtle power station in Georgia and now we have another from South Carolina Electric & Gas company (SCE&G) for two more for their Summer power plant. There is a 970 MWe pressurized water reactor in operation at Summer.
This is also an achievement for Westinghouse – now a Toshiba company – and its AP-1000 design of passive pressurised water reactor which should have the added advantage of a short construction period.
The Evolutionary Pressurized Water Reactor of Frances Areva is also a strong contender for US orders although it is at present loosing out to the passive design.
European utilities look at UK
Six major European utilities are reported to be looking at the UK market with plans for the AP-1000 passive pressurised water reactor. This is the design being offered by Westinghouse – now a Toshiba company sold for a song by the British.
The main competition is from Areva of France with its larger European Pressurized Water Reactor similar to that under construction in Finland and France. With a shorter construction time for the simplified AP-1000 we are faced with a lively competition. Of course if you take into account the size of our demand we could have both plants in parallel but that sounds a bit bold for the present situation in the UK.
US going for MOX
The US has in the past turned up its nose at the use of Mixed Uranium-Plutonium Oxide (MOX) fuel for use in its power reactor even though it originally invented the concept. But when it came to reuse of military plutonium in civil reactors there was only one choice.
Now they have finally placed a contract worth $2.7 billion for the construction and operation of a French designed MOX fabrication plant to be operated by Areva in combination with the US Shaw group.
They want to dispose of 50 tonnes of weapons grade plutonium in civil reactors in parallel with the megatons to megawatts programme for highly enriched military uranium. The Russians have a similar programme though they think that it is best to use surplus plutonium to fuel their fast reactors. There are some in the US who hope that this programme will make it respectable for other power plant operators to start recycling civil produced plutonium which in theory is now OK by the government.
There is of course another group that had the technology the US needed. The UK has a fully developed MOX plant but it was not even offered.
Australia thinks big
Although it has no nuclear power programme Australia thinks that it could play an important role in combating global warming by supplying a large part of the uranium for other countries. At the moment Australia has the largest reserves of uranium but due to political restrictions on production it has been pushed into second place by Canada. Now a report by the Australian Uranium Association undertaken by Deloite–Insight Economics looks at two possible scenarios for 2030 assuming that present constraints disappear.
The first scenario, which is in line with the Intergovernmental Panel on Climate (IPCC) fourth assessment report, is called Climate Action. It assumes CO2 emissions priced at $50 per tonne and a target of 550 ppm concentration by 2050. It would require 960 GWe of nuclear capacity by 2030 compared with the present total of 372 GWe. The second scenario called Climate Crisis calls for $100 per tonne of CO2 and limiting temperature at rise to 2oC by stabilizing CO2 levels at 450 ppm by 2050. This would require 1634 GWe of nuclear capacity by 2030.
With Australia supplying a modest proportion of world demand for uranium it is projected that scenario one would require export levels of 31 400 tonnes of uranium and scenario two would need 64 500 tonnes. |
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