Examination of Witnesses (Questions 1-19)|
TUESDAY 13 NOVEMBER 2001
1. Good morning, gentlemen. I imagine that you
would like to start, Mr Ham, by introducing your colleagues.
(Mr Ham) My name is Adrian Ham and I
am Director General of the British Nuclear Industry Forum which
represents 66 companies in the nuclear industry in Britain. With
me I have on my left Richard Mayson who is Head of Safety and
Environmental Risk Management for BNFL. On my right, I have Mike
Kirwan who is Director of Strategy and Business Development for
2. You are our first witnesses and there is
no sign in the timing of your evidence but we are very grateful
for the memorandum. Perhaps I can start. Much has been made about
the fact that we have to import energy and the impact that it
will have on our balance of trade in due course. I suppose it
could be said that we have been importing nuclear generated electricity
for some years now but, notwithstanding the French connection,
does it really matter if we become net importers of energy? Do
you think that it is essential in an integrated Europe with a
single market that we really need to be independent or as near
as possible energy independent?
(Mr Ham) Firstly, historically Britain has for its
electricity always been secure in its own internal supplies of
fossil fuel to produce the power that its industry needs. We have
not been in a situation where we have substantially depended on
flows of either electricity or fossil fuel from overseas. Particularly
with the development of North Sea gas of course and the explosion
of gas generation inside Britain, we have seen things move still
using British sources/domestic sources of power but, as gas reserves
start to run outand we have already, as you suggest, Mr
Chairman, seen signs of that happening now and as the Government
forecast suggestswe are going to be very substantially
dependent on imported gas supplies through the European grid in
the future: within two decades, to something like 80 per cent
or so for our electricity from gas which will mainly, at that
point, be coming from overseas. I would argue that that is very
significant. I do remember around 28 years ago working in the
Chancellor of the Exchequer's private office when we faced the
OPEC crisis at that time in 1974 and it is extraordinary how such
a crisis can affect the whole of an economy. It would be very
unfortunate to see Britain go back into that situation as a result
of neglecting some potential domestic sources of electricity such
as nuclear power.
3. Could you perhaps go into the reasons why
the nuclear stations will be closing. If only for the record,
if you could explain the significance of the closure of Magnox
stations, the timing of the closures and when the other more modern
stations will begin to require replacement, if that is the road
that companies are set to go down.
(Mr Ham) I will ask my two colleagues to make particular
comments about the Magnox bid from Richard's point of view and
about the other nuclear fleet from Mike's point of view. I think
that the overall figure is well known and you have seen this in
the submission that, in about 22 years or so, all the nuclear
stations which currently provide around a quarter of the country's
electricity will close as they come to the end of the life times.
If I can ask firstly Richard to say something about Magnox.
(Mr Mayson) The Magnox stations, as you know, have
served us well over the last 40 years and indeed Calder Hall recently
celebrated its forty-fifth birthday. We have recently completed
technical studies which have confirmed that they are approaching
the end of their life and closing dates have been announced for
all the Magnox stations and we believe those are realistic closing
dates, so within this decade all the Magnox stations will be closed.
4. What percentage of nuclear power does that
account for and what percentage of the electricity generation?
(Mr Mayson) If we think of nuclear power as providing
about a quarter of the country's electricity, the Magnox fleet
comprises around seven to eight per cent.
5. So, seven to eight per cent out of 25 per
(Mr Mayson) Yes, in that order.
(Mr Kirwan) The remaining 18 per cent comes from British
Energy's fleet of seven AGRs, that is advanced gas cool reactors,
and one pressurised water reactor. The pressurised water reactor,
Sizewell B, was only commissioned in 1995. I think we can expect
to see that still generating in 50 years time. That is not the
issue. The issue is the seven AGRs which have very finite lines
because of technical characteristics of the reactor cores which
get increasingly brittle over time and there is a critical life
limiting factor there. We do not know precisely when those lives
will end. We continuously review that and, at the moment, our
belief is that four stations will have about 35 years life and
there may be a few more years that we can get out of those but,
beyond that, at this moment in time, we cannot see any likelihood
of being able to extend those lives. So, on the basis of those
current assumptions, we would see closures starting with two in
2011 and the last being between 2020 and 2025. So, by 2025, all
but one nuclear station will have closed in the UK.
6. If you were going to replace a station, what
sort of time would you require for anticipating planning inquiries
and then the build? What number of years would you have to allow
before a station could effectively be replaced?
(Mr Ham) In our submissions, we have pointed out that
streamlining the planning process is an important issue, to allow
timely build and indeed to make future potential build more financiable,
but I will ask Richard to make a few comments about the particular
points that BNFL make about improving and streamlining the planning
7. Apart from the merits or otherwise of streamlining
the planning process, let us work for the moment on the assumption
that you are faced with the law as it stands. How long would you
at a conservative estimate have to wait? The board takes a decision
and then switches it on; how many years would it have to be?
(Mr Mayson) Realistically, with the planning and public
inquiry process that we have seen, you could expect it to take
probably between three and five years including all the preparation,
the site preparation work and so on that would be needed, and
that would then be followed by early orders of equipment and the
construction period and commissioning period which is about another
five years, so you are talking of the order of 10 years from the
decision to electricity on the bars.
Sir Robert Smith
8. Before I ask questions, I do not have any
registerable interests for this inquiry, but for the record of
the Committee, I would like to give notice that I have a financial
interest in Centrica and Shell Transport and Trading, and I am
Vice-Chair of the All Party Off-shore Oil and Gas Group which
is supported by UKOOA. I just want to follow up the question about
the importing of energy and clarify where the uranium fuel for
the nuclear industry comes from. Is it an imported fuel?
(Mr Ham) Firstly, there are a number of global sources
of uranium in different continents and I think that is a very
good question, if I can pass it on to my colleague here from BNFL
to enumerate those sources.
(Mr Mayson) The principle sources are Canada and Australia;
they account for about half the supply. There are about a dozen
countries throughout the world that provide the uranium that we
need. I think it is also important to recognise that the volumes
of uranium needed for nuclear fuel are very much lower than fossil
fuel volumes for example, and we could probably fit the entire
fuel load required for a number of reactors for a year in this
room. Relatively small volume is needed.
9. Does that suggest less security or more?
(Mr Mayson) I would not believe this represents a
great deal more and I believe it is also the case that, should
our sea routes be suddenly cut off, the amount of fuel that exists
in Britain at the moment would provide between two years and four
years of continued operation of the existing fleet, so I would
say that this compact storage, relatively speaking, of uranium
is a massive plus for the security of supply offered by nuclear
10. Despite the fact that the total supply required
for a considerable time could be enclosed just in this room?
(Mr Ham) Could be but is not in practice.
11. I have been listening to what you have had
to say with interest. We talk about nuclear power and it adds
diversity to supply and security of supply, but why do we need
British nuclear power? We have been very successful using the
interconnector and using French nuclear power, so why do we really
need to expand this nuclear industry?
(Mr Ham) I do not think that the industry is talking
about expanding, we are talking about replacement of the existing
capacity and the existing nuclear capacity is vastly greater than
anything that could come from France on the interconnector and,
if we are talking about reliability and security of supply, I
believe that even France has been known to have industrial action
which even affects its electricity power stations, so we are talking
about a much greater dimension of energy security that is offered
by the domestic nuclear industry.
12. The other point you mentioned was about
planning permissions. If you decommission, which you have done
already because some of the Magnox stations have gone, one in
particular in Wales, and you are looking for replacement, do you
believe that you will need planning permission as you will be
replacing a like or similar generator on the existing site?
(Mr Ham) If I can just answer firstly in broad terms
and there may be some technical follow-up that Richard may wish
to go through, but there is also the issue of course of future
funding which I know that my colleague on my right will probably
like to make some comment on, so there are a number of hurdles
that need to be overcome. In broad terms, because of the very
strict regulation of the nuclear industry, there are issues of
licensing new plant that have to be gone through with the independent
nuclear inspectoratethat has to be gone throughand
planning process has to be gone through very thoroughly and very
exhaustively. So, if you like, there are several hurdles and of
course because we manage in a fundamentally market based system,
there is also the issue of finance, then the financing process
will also have to be gone through. In terms of the technicalities
that you mentioned in respect of individual sites, perhaps Richard
could make a few other comments. I am sorry, are we going the
13. Is this a shortcut to planning permission
if you were to use the existing site?
(Mr Mayson) Obviously the planning process would have
to be gone through at all the sites and there are sufficient sites
in the UK to replace our fleet. I do not believe that it will
be a shortcut, but clearly the local communities around the existing
sites are well used to having nuclear power "on their doorstep".
14. Just to take this a little further, for
instance, if you were to take down a petrol station and put another
petrol station or an oil refinery back on the site, you would
not need planning permission because you were replacing something
that was already there. I am just wondering whether you have looked
at that. The other thing is, if you now see nuclear as very important,
why did you allow the planning permission to run out on that building?
(Mr Ham) Are you referring to . . .?
15. Sizewell C.
(Mr Ham) There was not a permission for Sizewell C;
there was a permission of course at a different site but, at that
stage, I think you will recall that there were major changes going
on inside the electricity market and there was also the privatisation
process which was taking place for British Energy, so there were
some other major factors which intervened in the period in which
there was a live planning permission for one more PWR.
16. So why do you think you have it right now
if you did not in the past?
(Mr Ham) I am not sure if I see what you mean by the
"it". What we are talking about is broadly a requirement
for the replacement of existing nuclear capacity in Britain in
a strategic period that overcomes the big loss that there would
be if this very large chunk of completely CO2 free generation
is allowed to disappear, so we are talking about 25 per cent of
the power potentially going over a period of two decades. If there
is not replacement of nuclear, how is Britain going to meet its
CO2 targets in the future? How is it going to make sure that it
is energy secure in the future? Those seem to me to be the two
big questions that, at strategic level, we should be asking.
17. Am I right in thinking that Sizewell B is
a follow-up to Sizewell A for which planning permission would
have been obtained before? Is that correct?
(Mr Ham) Sizewell A was Magnox and Sizewell B is PWR.
18. There was a nuclear power station on the
site of Sizewell B and it took an eternity to get
(Mr Kirwan) Chairman, just to correct you, both Sizewell
A and Sizewell B operated in parallel. Sizewell B was not a replacement
for Sizewell A.
19. On the other hand, it still had to go through
a very lengthy planning process. The fact that there was a nuclear
power station on site did not necessarily make the planning process
any more speedy.
(Mr Ham) That is exactly right, Mr Chairman.