The UK’s Department of Energy and Climate Change has already made up its mind about a new fleet of Nuclear Power plants. However, they had the good grace to publish an open online consultation on the overall National Policy Statements, to which I have just contributed. It’s not a real democratic, deliberative process, but I still contributed, because I believe we do need to make use of the channels opened for us to express ourselves, even if few people with decision-making authority pay attention to our points of view and analysis.
Please note : if you want to add your halfpennyworth you have until the close of business today to do so, 22 February 2010.
RISK FACTORS – TRENDS
I think it will not be possible to launch a successful new fleet of Nuclear fission plants, due to several trends which are changing conditions :-
(1) Economic Contraction
Since the collapse of the property market and the financial products market, there is no real engine of economic growth (not even the trade in the virtual commodity, Carbon). Plus with the bailout of the banking sector, the economy has probably shrunk by around 20% (my own very rough estimate) in real terms. It’s always possible to print more money to create more incentives, but appetite for exposure to risk has been quashed. I think Nuclear Power is unsustainable, that is, unsupportable, owing to the inevitable contraction of the global economy, a potentially enduring regime in which such expensive liabilities may not be tolerated.
(2) Carbon Contraction
The critical build phase of any new Nuclear plant will be coincident with a serious global effort to get Carbon emissions under control. This will have the impact of pitting Nuclear build against other kinds of energy infrastructure build. Nuclear build is energy-hungry and may well become the overriding liability, and projects may well not get completed. To build new Nuclear will require a huge investment in terms of Carbon Emissions used in construction, so new Nuclear projects may get halted, owing to the inevitable contraction of Carbon energy permits under any kind of Cap-and-Trade or Carbon Permit Auction pricing structure.
(3) Fossil Fuel Contraction
Peak Oil and Peak Natural Gas are serious risks within the timeframe for the completion of a new Nuclear Energy fleet. This is a combination of stress on actual physical supply, but also the question of rising relative costs within Fossil Fuel supply systems in the context of an imploded economy. Since building reactors and plant are Energy-intensive it may well be that Nuclear projects are seen to be competing for access to Energy, and may well get mothballed owing to other national need for Energy. It will become a question of priorities as Peak Fossil Fuels begins to bite.
(4) Long Payback Period
With the global economy having been seriously constricted by recent financial flow events, many investors are sceptical of long-term investments. This is affecting positions about Renewable Energy, but even more so for long lead-time projects such as new Nuclear Power. Analysis by investors shows the risks of non-completion of Nuclear projects which would entirely wipe out the value of their investment. Also, the actual payback period for many Renewable Energies can be estimated in the region of a decade, whereas the payback for Nuclear, not considering sweeteners, “consumer price fixing” or interim subsidies, could be in the range of 30 to 40 years, or even longer given an inclement economic climate. This will automatically create a preference for Renewables. With Nuclear Power, capital is locked up for long time periods in the construction phase, with no certainty of return. This is viewed as “unhealthy” investment for an increasing number of people.
RISK FACTORS : POLITICAL
New Nuclear Energy is politically contentious, for the following reasons :-
(1) Replacement Programme
The British proposals for a new fleet of 10 to 12 Nuclear Power plants has been promoted to combat Climate Change. This is not an accurate claim, as the new Nuclear plants would merely be replacement for Nuclear plant going out of service due to end of life. It has seriously to be considered if money would be better spent on capacity that replaces current Nuclear Energy supply in a timelier, cheaper way than sinking it into constructing new Nuclear reactors which would not be supplying power for 10 or more years.
(2) Costly To Build, Costly To Run
Recent European Union figures still rate Nuclear Fission power highly expensive in both capital and operational investment (Zero Carbon Britain 2010), and it has to be questioned whether the resulting power supply is worth the heavy commitment. A decision for Nuclear Power is a permanent commitment in many ways, because of the nature of the systems, and there is a risk of costs rising over time. Many people now recognise that in order to do the weighty investment in new Energy infrastructure required after decades of under-investment, public funds should be used and that the cost of electricity will inevitably rise for consumers. Yet, it is not justifiable to use this acceptance to launch new Nuclear projects, as the finance could be better used to support other technologies.
(3) Acceptability of Subsidies
Despite Vincent de Rivaz of EdF continuing to claim that he does not want UK Government financial support in order to build new Nuclear Power capacity, there are ongoing discussions in many fora about how the State can support new Nuclear through direct and indirect subsidies and guarantees : including the State paying for indemnity and insurance, the customers paying a higher rate for their power, and the State taking on the costs of the waste disposal and/or decommissioning of the plant at end of life. It is not clear whether these subsidies would be acceptable to future governments, and clearly they are not acceptable to a wide range of groups in Civil Society, which could block their continuation. There may well arise the public view that subsidising a fleet of new Nuclear plants is a waste of money and resources, compared to the success of the deployment of Wind Energy.
RISK FACTORS – OPERATIONS
From my understanding there are a number of risk factors associated with the operations of fission Nuclear Power plants :-
(1) Risk-prone Engineering
The translation of theory into engineering. A common problem with Nuclear Power is that it’s fine on paper, but complex in reality. I cannot think of a Nuclear Power installation where things have run entirely smoothly. There are various problems ranging from engineer inattention, through to inappropriate use of equipment, safety systems failure, materials fatigue, undetected leaks, and essential support systems and long-term radioactive waste storage being shaved by budget control. Technology is only ever as good as the engineering. Nuclear Power has been consistently unreliable, and in some cases dangerous.
A simple review of the past ten years of Nuclear Power shows that increasing privatised ownership of Atomic Energy installations has not removed the probability of poor engineering control and malfunctioning plant, and the subsequent necessary unplanned outages. In fact, privatisation has shown up the general inability of Nuclear Power to make a profit (example : British Energy bailouts, arguably paid for by the money set aside for decommissioning under the old CEGB arrangements). There is a great risk to grid capacity from Nuclear Power outage, as witnessed particularly in France, in December 2009, where during the coldest Winter for several decades, customers were not guaranteed electricity supply. Although many economists see Nuclear Power as “baseload”, it has to be admitted that to rely on Nuclear electricity for any proportion of baseload would be unwise, as planned or accidental, total or even partial outages are a major step-change on the grid. The number of new Nuclear plants on the grid must be limited as high numbers in the matrix would make it progressively less stable. More Nuclear electricity would not necessarily plug the “Energy Gap”, and may well trip up the goal for “Keeping the Lights On”. Nuclear Power is always at risk of sudden failure of a random duration, and since the electricity grid is facing increased stress in balancing load, there may be less willingness to use Nuclear Power on the national grid service.
(3) New Designs
New designs of Nuclear reactors have not increased reliability – surely a case of sales and marketing over-reaching technical expertise. Can we trust the new design proposals ?
RISK FACTORS – CONSTRUCTION
There are a number of risk factors associated with the construction phase of a new fleet of fission Nuclear Reactors, that I think will severely negatively impact the attraction of starting these projects to those companies that would tender for the contracts :-
(1) Global Construction Downturn
There are several good reasons why construction has entered a downturn around the world, including financing organisations pulling their horns in. Very few Energy companies are in a positon to promote Nuclear construction as a priority for their own internal capital expenditure budgets, so would be relying on venture arrangements or firm government commitment. Besides which, companies willing to start building new Nuclear plant would not go ahead without guarantees that low cost loan facilities would be generously available (this is the direction that the Federal American administration has unwisely taken). The risk from the British Government’s proposal to go ahead with new Nuclear is that some of the projects get stalled at very early stages, and that machinations about financing drag on for years. If companies unwisely start construction before the supply chain for all the raw materials, labour and finance has been locked in, then projects could stall indefinitely. There is also the matter of the risk of “spiralling costs” as construction contractors find their supply chain and project budgets pinched because of the state of the wider economy.
(2) The American Economy Implosion
Some talk has centred on the notion that the new Nuclear Power fleet proposed in the UK is merely a “copycat” reaction to American policy on Energy – in fact – several American Nuclear engineering companies are showing a keen interest in contracts that may come their way from European companies. Some people will question if the new Nuclear Power fleet proposed for the UK is in fact just the UK Government doing the crashed American economy a favour. This could be politically very divisive and unhelpful.
(3) Global Civil Nuclear Ambition
It seems likely that the drive for new Nuclear in North America and Europe will have a knock-on effect amongst various other regions of the world – causing such countries as Iran to continue to demand their rights to Nuclear Power. This has caused political tension in the past and will continue to do so, because of the inevitable link between civilian and military uses of Nuclear reactors. To avoid escalation it may well be advisable to reject the development of Nuclear power (and educate the Iranians about its true costs).
(4) Over-Time and Over-Budget
It cannot be expected that recent experience with Nuclear projects can easily be avoided – the two most common being delays in construction and financial budgets being too quickly exhausted.
RISK FACTORS – WASTE
(1) Discrete Radioactive Waste
The still largely unresolved problem of permanent and safe disposal of radioactive waste from Nuclear Power is the major block to public acceptance of a “renaissance” in Nuclear Energy. If this cannot be resolved, even with large amounts of public money being allocated to the task, then the situation is clearly untractable and should prohibit any further atomic energy development.
(2) Decommissioned Reactors
Land that is used for Nuclear Power plants is effectively taken out of use permanently in many cases; where there has been significant contamination, for example at Chernobyl, but also at other decommissioned sites. Like radioactive waste, this remains a burden on society for many generations to come, to protect the site from inadvertent or inappropriate use, and to make sure that nothing from the site spreads beyond its encapsulation.
A number of high profile projects to re-process radioactive waste have been dogged by problems, and sending waste back to the senders leads to another level of complication, besides not being a final solution.