Memorandum from British Nuclear Fuel Limited
1. We welcome this opportunity to contribute
to the Environmental Audit Committee's study of a sustainable
energy strategy, particularly in light of the publication of the
Performance and Innovation Unit's Energy Report. We support the
PIU's recommendation that there should be a debate into future
energy policy, including the contribution to be made by nuclear
2. It is essential that we move to a sustainable
energy strategy. Nuclear energy can help contribute to that strategy
by supplying electricity from a source that has almost no greenhouse
gas emissions, its waste is safely managed and the cost of this
is paid for in its generation price. Nuclear power plants supply
electricity reliably and affordably whilst promoting security
of supply by reducing our dependence on fossil fuels.
3. To ensure that nuclear energy can continue
to contribute to a diverse and sustainable energy supply we recommend
Nuclear energy is recognised by the
Government as an important component of a sustainable energy strategy.
Economic mechanisms addressing climate
change, such as carbon taxes and emissions trading, should be
structured to give credit to nuclear generation as it emits almost
no greenhouse gases.
Government should continue to promote
new renewables, but as part of an overall energy strategy to meet
sustainable development goals.
The planning and regulatory approval
process should be improved to allow decisions to be taken more
efficiently on nationally important infrastructure projects, such
as new nuclear power stations.
Government should encourage nuclear
education, training and R&D to maintain the skills necessary
to maintain a vibrant nuclear industry.
Government should develop a clear
policy and strategy for nuclear waste as quickly as practicable.
4. The way in which electricity is generated
in the UK is currently incompatible with the long-term objectives
of sustainable development. The greenhouse gas emissions from
fossil fuel generation form a major part of the UK's contribution
to climate change, potentially the most serious threat to the
environment in the 21st century.
5. Nuclear energy and renewable energy sources
can generate electricity with almost no greenhouse gas emissions.
However, it is unlikely that either nuclear power or renewables
will be able to supply all the UK's future electricity demand.
Nuclear power is best suited to meeting baseload electricity demand
whilst many renewables provide electricity intermittently. Therefore
both nuclear energy and renewables will be needed to make the
necessary reductions in greenhouse gas emissions. The current
share of electricity supplied by nuclear generation should, at
least, be maintained and the expanding share of electricity generated
from renewable sources should be used to displace fossil fuel
generation, to maximise the greenhouse gas emissions reductions.
6. The provision of reliable and affordable
supplies of electricity from sources that will not harm the environment
is an essential element of sustainable development. Interruptions
to electricity supplies seriously inconvenience domestic users
and harm the competitiveness of business.
7. Nuclear generation can make a positive
contribution to sustainable development. One of its key characteristics
is that it supplies electricity with almost no greenhouse gas
emissions. Globally, nuclear energy helps avoid the emissions
of nearly two billion tonnes of carbon dioxide each year. In the
UK the emissions avoided through the use of nuclear energy are
equivalent to more than half of the emissions from road transport.
8. The environmental impacts of nuclear
energy are very low. The waste products that are produced in the
nuclear fuel cycle are of a relatively small volume. They are
captured, thereby isolating them from the environment and are
being safely treated and stored for eventual final disposal. A
study carried out by ExternE concluded that the level of environmental
externalities associated with nuclear generation were comparable
to those of generation from wind turbines, and very much lower
than those associated with fossil fuels.
9. Technical solutions to the treatment
and disposal of nuclear wastes exist. The challenge now is to
implement those solutions. In Europe and the US progress is being
made. We would encourage the Government to develop a clear strategy
for nuclear waste disposal.
10. New reactor designs would produce much
less waste, only around 10 per cent of that produced by the UK's
existing nuclear power stations.
11. BNFL is investing in new reactor designs
that are bringing down the cost of new nuclear build, whilst incorporating
improved safety features. The projected generation cost of between
2.2 p/kWh and 3 p/kWh includes provisions for the treatment and
eventual disposal of waste and the decommissioning of plant. These
generation costs are amongst the most affordable of the low-carbon
generation options and could be competitive with fossil fuel options
if those technologies were required to internalise the cost of
their greenhouse gas emissions.
12. Nuclear generation also helps promote
security of supply by reducing our reliance on imports of fossil
fuels. By maintaining a vibrant nuclear industry in the UK we
will have more options open should we need to adapt our energy
strategy in the longer term, should fossil fuels become more expensive
or less easily accessible.
13. The price charged for nuclear generation
in the UK include the costs of treating and storing waste arising
from the nuclear fuel cycle, as well as making provisions to pay
for final disposal waste. Nuclear generation costs also include
provisions for the decommissioning of nuclear plant. In sharp
contrast fossil fuel generators are allowed to emit greenhouse
gases freely into the atmosphere without penalty. The impact of
those greenhouse gases on the environment is an example of an
external cost which at present is not included in the generation
costs of fossil fuels.
14. Giving credit for the contribution made
by nuclear power in avoiding greenhouse gas emissions by fully
recognising their contribution in climate change policies such
as carbon taxes and emissions trading will allow all generation
types to compete on a more equal basis.
15. The Government has recognised the need
to reduce greenhouse gas emissions and has introduced policies
to achieve this goal. However, policies introduced so far, such
as the climate change levy and the UK emissions trading scheme,
do not give due credit to nuclear generation.
16. The climate change levy is, in essence,
an energy tax on the business sector. The levy makes no distinction
between fossil fuel generation and nuclear generation. There are
exemptions from the levy for renewables and some CHP. These exemptions
are welcome as part of a climate change strategy but further highlight
how credit is not being given to nuclear generation.
17. The Government's emissions trading scheme
does not include the direct participation of generators. There
are good reasons why generators have not been involved at this
early stage. However, in the longer term emissions trading schemes
should involve generators, especially when cap and trade schemes
are established on a European or global scale. The generation
sector is a major source of greenhouse gas emissions and the reductions
in emissions in the UK from generators over the last 10 years
shows there is a great potential for further reductions.
18. However, the carbon reductions gained
through nuclear generation in the UK will be lost as most of the
existing reactors close over the next 20 years. Unless those reactors
are replaced with low-carbon electricity greenhouse gas emissions
will rise. The direct involvement of the electricity generation
section in an emissions trading scheme would encourage the construction
of low-carbon generation, whether nuclear, renewables or fossil
fuels with carbon sequestration.
19. In responding to the PIU Energy Review
the Chairman of the Environmental Audit Committee stated that:
"The PIU report was intended to respond
to the Royal Commission on Environmental Pollution, which called
last year for a 60 per cent cut in emissions by 2050 to avoid
irreversible Climate Change. It was meant to set out where the
UK should be in 2050 and how we should get there. I find it disappointing
that the PIU have stepped back from this strategic aim and fail
to set out how aims and targets are to be achieved."
20. We support the Chairman's comments on
the need for a long-term view on how the UK will achieve the full
reduction in greenhouse gas emissions required to stabilise atmospheric
greenhouse gas concentrations. We hope the forthcoming Energy
White Paper will address these issues. In the electricity generation
sector plant and infrastructure can have an operating lifetime
of many decades. New plant built over the next 20 years may still
be operating in 2050. Therefore policies and instruments introduced
to address the electricity sector over the next two decades will
have an influence on the generation mix for a much longer period.
21. At present the renewables obligation
and the CHP target are focused on the shorter term. The objectives
of these mechanisms to help establish renewable energy and CHP
as significant contributors to the UK's electricity generation
is, in principle, welcome as it is intended to enhance diversity
of supply and help reduce greenhouse gas emissions.
22. However, energy policy will be more
able to ensure environmental protection and economic efficiency
if it addresses all generation options. As the current generation
of nuclear and other power plant is retired there will be a growing
demand for new generation capacity coupled with the need to further
reduce greenhouse gas emissions.
23. In order to meet the needs of sustainable
development electricity supplies must protect the environment
and be affordable and reliable. BNFL is confident that new nuclear
power stations are amongst the most cost-effective options for
new build, especially when all externalities are considered. There
should be an on-going review of options to reduce greenhouse gas
emissions to ascertain what generation technologies will be most
effective in delivering greenhouse gas emissions affordably.
24. The PIU report records that there have
been no new nuclear plants built in liberalised electricity markets.
In fact in the liberalised UK market there has been no construction
of any new baseload generation plant. The Trade and Industry Select
Committee study into Security of Supply notes that:
"We have not yet heard any evidence that
leads us to believe that the market is sufficiently far-sighted
to guarantee enough reserve generating capacity."
25. To ensure secure and reliable supplies
of electricity new baseload generation will be needed. There should
be a review how long-term supply contractswhich are required
by any baseload generationcan be put in place.
26. A significant proportion of that baseload
generation should be based on nuclear power to minimise greenhouse
gas emissions and increase security of supply. The House of Lords
Select Committee on the European Union's report on Energy: Security
of Supply recommended that:
". . . the Government should maintain the
United Kingdom's present ability to produce no less than 20 per
cent of United Kingdom electricity demand from nuclear power Generation."
27. Such a target should operate in tandem
with efforts to increase generation from renewables. The PIU Review's
target of increasing renewable generation to 20 per cent by 2020
would be matched by a similar reduction in generation from nuclear
energy as Magnox and AGR reactors are retired. Without replacement
nuclear build this would result in no net reduction in greenhouse
gas emissions. New renewable generation should be used to displace
fossil generation, thereby reducing greenhouse gas emissions whilst
the contribution made to UK electricity supply from nuclear energy
should, at least, be maintained.
28. The Government is reviewing the planning
process having recognised that the current planning process for
large infrastructure projects is leading to unnecessary delays
and uncertainty, which damage competitiveness. To be competitive
the lead time before a new nuclear reactor enters operation should
be as short as practicable.
29. The planning and regulatory approval
process should provide an opportunity for a relevant and focused
debate with the elimination of repetitious arguments. It should
not hinder the right decision being taken.
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30. The PIU report recommended keeping the
nuclear option open. It is important to understand what this entails
and how it can contribute positively to sustainable development.
If the UK is going to be able to benefit from a new generation
of nuclear reactors decisions on how to provide the skills for
such an industry need to be taken in the immediate future.
31. It is important that the UK nuclear
industry can continue to draw upon well trained graduates. This
includes graduates with specialist training in nuclear disciplines.
There is also a need to maintain an R&D capability both within
the industry and also in partnership with universities.
32. By maintaining and developing a skill
base for the future the nuclear industry can continue to provide
valuable employment opportunities to thousands of people in the
33. As previously described, wastes from
the UK's nuclear industry are safely stored and managed. Furthermore
technical solutions for the long-term management and final disposal
of nuclear wastes exist. However, the UK currently lacks a clear
policy and strategy for nuclear wastes.
34. A clear policy and strategy are needed
to confirm that nuclear wastes can be safely dealt with. A clear
direction on the long-term management of nuclear wastes will also
help the nuclear industry more effectively manage its waste in
the short- to medium-term.
35. The Government has launched a debate
on the future strategy for nuclear waste with a consultation paper
"Managing Nuclear Waste Safely". This is an important
debate and, to be effective, it should lead to the development
of a clear policy for nuclear waste.