Select Committee on Science and Technology Appendices to the Minutes of Evidence


APPENDIX 7

Memorandum submitted by the British Nuclear Energy Society

This submission responds to the terms of reference as issued by the Science and Technology Committee

  TOR 1—To evaluate the level of expenditure on RD&D in non-carbon energy technologies, by UK government, the Research Councils, the Carbon Trust and industry, and where it is being directed.

Response 1—

1.1  RD&D Investment by Nuclear Utilities via Government Levy

  The HSE on behalf of the HSC administers an Industry Management Committee (IMC) which is a coordinated Nuclear Safety Research programme. This if funded by contributions (levy) on generating companies with existing Nuclear Reactors. Approximately £8 million was raised and spent in 2000-01 on this programme. This covered safety related research which was commissioned across the contributing utilities and universities. This funding has been under severe pressure because the utilities have had to cut back their cost base to meet the fall in income under NETA, for their sales of electricity. As the Nuclear reactors are closed sequentially, this fund will inevitably decline.

1.2  RD&D Investment by the UK Government

  OECD Energy Technology Statistics—R&D Database indicates a significant decline in investment from £500 million in the last 25-49 years to practically zero, in year 2000 monetary values. Hence, the investment. Predominantly at Harwell, Winfrith etc laboratory sites on fission RD&D has been seriously eroded. This has had an adverse impact on the research in universities, careers in nuclear technology and the general nuclear experience for the future. There has also been a deleterious impact on the supply chain of many service companies over the years. The major privatisation/reorganisation of UKAEA/AEAT has also resulted in under investment in nuclear expertise and university funding.

1.3  RD&D Investment by UK Research Councils

  The EPSRC Energy Sector Review in April 2001 shows that the investment in nuclear technology from all the UK Research Councils lies well behind other energy forms and therefore provides little support to industry and future fission energy systems.

1.4  RD&D Investment by UK Nuclear Generators

  The privatisation of Nuclear Electric and Scottish Nuclear into British Energy, leaving Magnox stations to BNFL in the mid 1990's resulted in a "no new build" policy. With the cancellation of the PWR programme in Britain, following completion of Sizewell B, the nuclear infrastructure and Industry for future British build programme and export potential, took a severe blow. With nuclear generators competing in a hostile electricity market, the inevitable happened. There were consequential reductions in existing staffing numbers, new intakes (graduates) and also funding by the nuclear utilities in future nuclear systems.

  We will leave British Energy and BNFL to make their own comments on the changes to each company's focus which moved more to liabilities management, waste and decommissioning, rather than looking ahead to the next generation of reactor systems. This had had a major adverse impact throughout the whole supply chain—industry suppliers, university placements and the future capability to support a future British and global nuclear generation programme.

1.5  Summary and Conclusion

  Government policies have resulted in a run down of the nuclear industry in Great Britain and there is a need to revitalise the future reactor RD7D programme to ensure Britain regains its leading edge that it had in the 1960s-70s. This is essential if nuclear technology is to play a vital role in the non-carbon energy mix.

TOR 2—TO IDENTIFY WHICH TECHNOLOGIES ARE, OR SHOULD BE, RECEIVING SUPPORT, AND HOW MUCH INVESTMENT IS DIRECTED AT RESEARCH, DEVELOPMENT AND DEMONSTRATION RESPECTIVELY

Response 2—

  We consider Nuclear Power to be an essential ingredient in the future energy mix, along with renewable and hydrogen based energy systems.

  Without new build in Britain there will be a gradual, yet serious decline, in major non carbon based electricity production. This would mean a loss of 20-25% of the existing carbon-free electricity generation. This will also affect the potential of a "hydrogen economy" since it requires electricity for its production process.

  We believe that the current situation, where there is no government funding to the nuclear generation sector, has resulted in a serious decline in the future capability of this technology in Britain. There is no incentive for industry to invest in future nuclear systems unless there is a "new build" policy to replace the existing nuclear stations. We therefore believe that funding should be provided to reverse this declining situation.

  Unless there is a clearly defined future for nuclear generation as an option, there is unlikely to be a pro-active approach by industry suppliers and universities to invest resources which extend beyond their short term business planning cycles.

SUMMARY AND CONCLUSION

  Government should work closely with the industry and universities to ensure that there are strategic plans and adequate recourses to support the current nuclear generators' needs of RD&D. In addition, government needs to help to expand the skill base for the future replacement/new build programme.

TOR 3—TO ASSESS THE SKILLS BASE AND THE STATE OF RD&D FOR DIFFERENT TECHNOLOGIES

Response 3

  This has been partly covered earlier but to re confirm our position that we believe the UK nuclear skills base and RD&D infrastructure is now at its weakest point for many years and threatens the capability of reopening the nuclear option unless urgent measures are taken and government lead the revival through clear policies and investment programmes.

  A number of skills audits have been carried out such as the HSE Nuclear Skills Audit and Nuclear and Radiological skills and Study by the DTI and These provide a good insight into the required future feed stock of human resources into this sector.

  The BNES will continue to promote nuclear energy as a valuable contributor to environmentally friendly electricity production and a serious option for the future of mankind and that careers in the sector are a vital contribution to society and rewarding. The Young Generation Network is a vibrant group seeking to promote the benefits of nuclear energy in schools and universities. However, government leadership is an essential backcloth.

TOR 4—TO ESTABLISH HOW GOVERNMENT POLICY ON ENERGY RD&D IS FORMULATED, IMPLEMENTED AND EVALUATED, AND THE NATURE OF COORDINATION BETWEEN DEPARTMENT, EXTERNAL AGENCIES AND INDUSTRY

Response 4

  There appears to be no coherent strategy from Central Government to enable the nuclear option to be kept open. It is crucial that better co-ordination between government departments is achieved and that there is a clearly defined set of responsibilities and resources made available to enable a cohesive business plan to be produced and acted upon. This will require strong leadership from the Government to make it happen.

TOR 5—TO ESTABLISH THE LEVEL OF RATIONALE FOR INTERNATIONAL COLLABORATION IN ENERGY RD&D AND HOW PRIORITIES ARE DETERMINED

Response 5

  There is already much international collaboration in the whole spectrum of operations and safety of nuclear power plants. The International Atomic Energy Agency, the World Association of Nuclear Operators and the Institute of Nuclear Power Operators in the USA provide considerable transfer of best practice and learning to promote improvements in safety and performance of the 440 or so nuclear reactors in the world. Great Britain makes a major input into this and is seen as a valuable contributor Likewise there is much more collaboration between the nuclear regulators.

  Needless to say, there should be global collaboration on RD&D, as major generic projects to develop new technology are often beyond the expertise or indeed the funding capability, of individual countries.

  There does not appear to be any current UK government strategy for nuclear fission RD&D projects. Most collaboration is done on a piece meal basis. Whereas there should be a solid input from the UK expertise in order to develop international win/win situations and added value.

TOR 6—TO EXAMINE THE EFFECT ON ENERGY RD&D OF PRIVATISATION, LIBERALISATION, REGULATION AND CHANGES IN OWNERSHIP IN THE SECTOR

Response 6

  The effect on energy RD&D as a result of privatisation has been dramatic for the reasons quoted earlier. It should be noted that AEA Technology indeed withdrew from all nuclear RD&D to concentrate on non nuclear core business. In addition industry and the academia has consolidated and declined over the last 20 years through reorganisations of the industry and privatisations, as well as under-funding in universities.

  Liberalisation of the electricity market has brought severe cost reduction measures into the nuclear generators with the inevitable knock on effects of staff reductions and lack of investments in order to achieve short term survival.

  The UK nuclear generators operate under stringent regulatory control and so they should. They have to fully fund their total cost base (including regulatory costs) and also their total impact on society (externalities). This is not so with other fossil generators and results in unfair competition.

  Mergers and acquisitions, vertical integration and flexible plant has put extreme pressures on the nuclear generators which were in many cases prevented from doing likewise because of regulatory constraints and the five year delay in privatising nuclear utilities after the fossil generators. There is very little room for profitability in base load wholesale electricity markets as the recent roubles with British Energy has shown. There is a general view now in other countries that if you are to make money in electricity, it will not come from generation but transmitting and distributing it!

TOR 7—TO MAKE COMPARISONS WITH OVERSEAS COMPETITORS

Response 7

  The US Department of Energy have recently proposed an increase in funding for nuclear RD&D technologies to $46.5 million for 2003-04. The US Nuclear Waste Fund exceeds $200 million.

  The UK Lags well behind other countries in the investment on RD&D and this is well demonstrated in the R&D data base of the OECD Energy Technology statistics. Japan (£1000 million), France (£500 million), Belgium (£75 million) and Netherlands (£10 million) compared to UK of less than £5 million.

OVERALL CONCLUSIONS

  The UK were amongst the world leaders in nuclear technology and have now fallen well behind through lack of investment in RD&D and the lack of a clear energy policy which includes nuclear as a valuable environmentally friendly contributor. The Science and Technology Committee have established a strong set of Terms of Reference and the BNES has welcomed the opportunity to respond with this submission. We hope that it provides the Committee with useful information and helps them to advise the Government on a recovery strategy for the British nuclear industry.

20 September 2002



 
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