This article was written by Mark Richards, Partner, Pinsent Masons and appeared in Power UK.
Problem: you are the British Government in about 2001. You believe that any suggestion of supporting a policy of new build nuclear in the UK is political suicide but you privately recognise the following dynamics:
(1) nuclear power is a reliable source of energy providing baseload of about 25% of UK electricity;
(2) it is not affected by price swings to the same extent as gas and oil;
(3) it does not emit carbon and without it, the UK would find it very difficult to meet its greenhouse emissions targets;
(4) all UK nuclear power stations bar Sizewell B will close by 2023;
(5) demand for energy is rising;
(6) British gas supplies are running down, gas prices are rising and Britain is becoming reliant on gas imports from countries like Russia and Algeria;
(7)without nuclear energy, security of supply would be threatened;
(8) renewables have a role to play, but they cannot replace nuclear as the single largest source of low carbon emitting energy available in UK in the foreseeable future;
(9) if the price of electricity from gas and coal had to include environmental costs, as nuclear has to, the economics of replacement nuclear build would improve significantly;
(10) uranium is in abundant supply: one tonne of uranium can produce as much energy as 17,000 tonnes of coal;
(11) the land requirement for a 1000 megawatt nuclear power station is significantly less than for the equivalent solar, wind or biomass energy;
(12) nuclear waste exists and has to be dealt with whether or not there is replacement nuclear plant and technical solutions are available, although research into public attitudes indicates that radioactive waste management is fundamentally a social and political issue;
(13) the nuclear industry contributes about £3.5 billion to UK GDP and is a major exporter,(more than £650 million per year) and directly provides 30,000 highly skilled jobs and about the same again indirectly.
What happened? There was an energy review and a White Paper in 2002 which concluded that the UK needed to keep the nuclear option open. To many on both sides of the nuclear debate, this was no decision at all. However hindsight may prove such criticism unjustified.
There is evidence that in fact the Government did listen to the industry when the British Nuclear Industry Forum (now the Nuclear Industries Association) said in submission to the Energy Review in 2001:
"A process of decision-making involving public information and involvement which is seen to be leading towards an acceptable solution for waste management is essential, but the physical existence of the preferred solution should not be seen as a pre-requisite for future nuclear development".
In the language of the politician it is reasonable to assume that this translated thus: that the issue of nuclear waste most shapes the views of the electorate.
Three steps were taken:
(1) to establish an open, consultative and transparent process leading to an Energy Act in 2003 and the enabling of the Liabilities Management Unit and subsequent launch of the Nuclear Decommissioning Authority (NDA) in April 2005. The NDA has now taken ownership and responsibility for cleaning up the legacy UKAEA and BNFL sites but in an environment where there has been no change in the rigours of the regulatory regime;
(2) to establish a process for addressing long term management of waste through the Committee on Radioactive Waste Management (CoRWM). Margaret Beckett said in July 2002:
“The Managing Radioactive Waste Safely consultation was the first stage in our programme. The appointment of the new body will signal the beginning of Stage 2, and the process of assessing options, and it will end when we publish and explain our decision. Stage 3, around 2006, will be a public debate on how the decision should be implemented, including any site selection criteria. Stage 4, around 2007, will be the start of the implementation process. " and
(3) to invest heavily in the development of renewable energy sources.
There is evidence that this sort of approach works. The new plant being built in Finland at Olkiluoto was only given the go ahead after much public consultation and a vote in parliament. Significant is that it was accompanied by a decision to undertake a characterisation exercise for a national waste repository at the same site.
So here we are, another Government energy review underway, CoRWM to report later this year, and the NDA draft strategy emphasising its contingent need for an early decision on the CoRWM recommendations. Throw into the mix that the UK is now a net importer of gas, the security of which is reliant on Russia, rising oil and gas prices, the increasingly more attractive economics of nuclear power ….and possibly some real evidence of climate change and perhaps the Government may have got its timing right if it was always the intent to opt for the new build nuclear solution.
Mark Richards
Partner
Pinsent Masons