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


APPENDIX 20

Memorandum submitted by British Nuclear Fuels Limited

TOR 1—TO EVALUATE THE LEVEL OF EXPENDITURE ON R,D&D IN NON-CARBON ENERGY TECHNOLOGIES, BY UK GOVERNMENT, THE RESEARCH COUNCILS, THE CARBON TRUST AND INDUSTRY, AND WHERE IT IS BEING DIRECTED

1.1  Summary of Key Points

    —  Nuclear Power is the only certain way to a low-carbon fuel economy.

    —  UK Government expenditure on nuclear fission R,D&D has declined significantly over the past 25 years, from £500m pa in the mid-1970s to close to zero today.

    —  There is over-reliance on industry to fund the R,D&D gap and maintain the national nuclear skills and infrastructure.

    —  UK Research Councils give little recognition and support to research into nuclear fission and reactor systems.

    —  The Carbon Trust gives nothing to the future development of nuclear systems, which are an important low-carbon energy source.

    —  The bulk of the UK's R,D&D expenditure is focused on wastes and liabilities. By comparison, long-term work on future nuclear systems receives much less attention.

    —  Without action there is an unprecedented discontinuity in funding for current and future nuclear fission systems.

  (Note: The impact of the nuclear R,D&D funding picture on the health of the UK's skill base is covered in the response below to TOR 3. Comparison with overseas competitors is covered in the response to TOR 7).

1.2  Commentary on Key Issues Above

1.2.1  R,D&D Expenditure by UK Government:

  According to data from the International Energy Agency, the UK Government's expenditure on nuclear fission R,D&D has fallen over the past 25 years, from around £500 million in 1974 (at year 2000 monetary values) to close to zero today. During the 1970's and 1980's, this expenditure helped support the UKAEA at Harwell and other sites, which functioned as the equivalent of the UK's national nuclear laboratories. When BNFL was set up in 1971, it was the intention at the time that the UKAEA would continue to underpin the UK's nuclear science base. However, in the intervening years with privatisations and industry reorganisations, that underpinning science base has been eroded. The UKAEA and Government at the time were also big supporters of nuclear expertise and facilities in the UK's universities. With this decline in funding, the expertise pool and facilities in universities has also significantly declined (this is covered in more detail in responses to TOR 3 and TOR 6 below).


1.2.2  R,D&D Expenditure via Government Levy on Nuclear Utilities

  The Health and Safety Executive (HSE), on behalf of the Health and Safety Commission (HSC), administers a co-ordinated nuclear safety research programme (called IMC—Industry Management Committee) under guidelines issued by the Secretary of State for Trade and Industry. This is all funded by a levy on the nuclear generating utilities associated with existing nuclear reactors. The aim of the programme is to maintain key capabilities, including in universities, and to commission safety related research of generic value across the contributing utilities. Around £8m was spent on this programme in 2000-01. This funding will inevitably decline as the closure programme of currently operating stations takes effect.

1.2.3  R,D&D Expenditure by UK Research Councils

  Although nuclear work is funded across all the UK Research Councils, it tends to be in specialised or niche areas of little relevance to industry and in particular to future fission systems. Figure 2, shows the lower importance placed by EPSRC on nuclear compared to other energy types. Even then, the nuclear figure is a false optimistic picture, as much of the older work cannot be aligned with the future priorities and opportunities facing the nuclear industry. EPSRC's investment is notably low given the scientific and engineering challenges in topics underpinning nuclear technology.


1.2.4  R,D&D Expenditure by the Nuclear Industry Sector

  In 2001-02, BNFL's reported expenditure on R,D&D was £113 million, which represented about five% of turnover. However, as in previous years, the bulk of this expenditure was directed into priority areas linked to wastes and liabilities, as well as improving manufacturing operations. British Energy (BE) ceased to fund investment into the development of future nuclear systems in the mid 1990s.

  BNFL's investments in future nuclear systems has been predominantly targeted outside the UK as part of international collaborations, with less than £1 million spent on UK programmes. There is little incentive for industry to invest in the UK in future generation systems in the absence of a commitment to new build. Without action, RD&D in this area will stall altogether. The UK will consequently lose its national capability to develop and benefit from future nuclear systems, and to play an important role in technologies where it traditionally was a world leader.

RECOMMENDATION 1:

Incentivisation of industry to invest in nuclear R,D&D

  Government action is needed to change the climate in the UK nuclear energy sector to incentivise industry to invest in medium and long term R,D&D. Whilst investment in improved safety, reliability and competitiveness of existing technology is clearly the preserve of industry, future reactor R,D&D requires significant Government underpinning. The past reliance on industry to "backstop" the nation's nuclear capability isn't sustainable. Consequently, greater Government recognition and funding is needed to sustain the UK's underpinning science base and ensure, through a domestic programme, that the UK has something credible to contribute to international collaborations on future nuclear systems.

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

2.1  Summary of Key Points

    —  Nuclear generation is almost alone in the energy sector in receiving no Government funding. Yet nuclear power is vital in contributing to the meeting the UK's emission targets and ensuring security of supply. Currently operating nuclear plants have a published closure programme, and the existing national nuclear skill base is now insufficient to fully support a new station build programme. From being a world leader in nuclear power, the UK has allowed the nuclear option to become closed.

    —  The two priority areas for nuclear R,D&D are wastes/liabilities, and future nuclear systems. Whilst the LMA White Paper gave a commitment to Government funding of R,D&D of national importance associated with liabilities, there is no such commitment associated with developments of future nuclear systems. Through the creation of the LMA, responsibilities for wastes and liabilities will be established, along with identification of those organisations that will play key roles in commissioning R,D&D. Follow-through is needed, however, to ensure that the division of R,D&D accountabilities between these organisations is made clear, especially in respect of overseeing and maintaining the UK's national skill base.

    —  Investment in improved safety, reliability and competitiveness of existing technology is clearly the preserve of industry, supported by relevant collaborative programmes sponsored by the EU, IAEA etc. However there is currently no incentive for industry to invest in future nuclear systems, which are beyond its affordability and business planning timescales.

    —  The UK is losing the opportunity to gain from its 50 year history in gas-cooled systems, which are likely to re-emerge as High Temperature Gas Cooled Reactors in modular form (eg PBMR) as the future system for strengthening the link of nuclear generation with the hydrogen economy.

    —  Participation in EU programmes is not solely the answer, as around 80% of the Euratom budget goes on fusion R,D&D. Fusion technology is a long-term vision, but realistically it is at least a generation away. The UK, through its European Framework Programme five and six (FP5/FP6) subscriptions, is essentially paying to keep other countries' nuclear skills buoyant.

    —  Improvements to the UK's research and test facilities are required. However large-scale facilities such as research reactors and MTRs (Materials Test Reactors) are best pursued through international collaborations.

    —  The Government's targets for both the reduction in carbon emissions and the growth in renewable technologies for generating electricity are very ambitious. Hence all low-carbon technologies need to be pursued to provide flexibility or cover should problems arise during the development programmes or circumstances change.

    —  The current nuclear generating capacity is 24% of the UK electricity market. It is already in decline from a peak of 30% in the mid 1990s, and will reduce further to 5% by 2020 and zero by 2033. The station closure programme and uncertainty is discouraging UK industry from investing in medium-term R,D&D, and the Government has withdrawn from funding UK R,D&D programmes into nuclear fission. The result is undermining the nation's nuclear skill base and research infrastructure. Consequently the nuclear option is currently closed in the UK. The consequence of taking no action now is to remove the option of nuclear generation making a meaningful contribution to the non-carbon fuel economy in the medium term future.

    —  The EPRI (Electric Power Research Institute) Electricity Technology Roadmap on the Energy/Carbon Challenge, highlights particular "well-defined technology development opportunities" which could significantly address public concerns relating to nuclear generation. Examples are: "high-utilisation fuel cycles (on existing reactor designs) to improve generation economics, extend nuclear fuel resources by up to a factor of 80, significantly reduce residual waste toxicity, and alleviate proliferation concerns". Also "high-temperature gas-cooled reactors (next generation HTRs) for higher efficiency and process heat applications in addition to electricity generation". EPRI also further note, that pebble-bed designs (PBMR) such as proposed by Eskom in South Africa could, for example, allow modular construction down to 100MW size.

    —  As well as generating low-carbon electricity, nuclear can also play a key role in the hydrogen economy. Hydrogen is appearing highly attractive as the zero-emission fuel source for the future transport sector. But the question needs to be asked, where is all the hydrogen going to come from? The transport sector accounts for around a third of the UK's energy requirements. Around 95% of the current UK's hydrogen is produced from the decomposition and degassification of fossil fuels, a process that generates CO2 as waste. International research is looking at other processes for hydrogen production but, to be sustainable, the electrical energy that is needed will have to come from a clean, low-carbon source. The only viable options are nuclear and renewables. Renewables, by their nature, are intermittent and, in isolation, cannot service a full-scale hydrogen economy. Nuclear, linked to the hydrogen economy is, however, viable. Nuclear already offers the prospect of dual-use stations, generating low-carbon, baseload electricity for domestic and industrial use around the clock and then, during periods of low demand, switching some of the power over to the clean production of hydrogen. A near term new build programme could significantly increase the capability to generate hydrogen. Future nuclear systems offer improved potential for the hydrogen economy long term, but if the UK is not involved it will lose out to others who are more far-sighted, such as Japan, France, USA and South Africa.

    —  Future nuclear systems require significant Government underpinning, particularly in taking the technology from the initial R&D phase through to the demonstration phase. If a prototype reactor is required, overall expenditure would be around $1 billion. This level of funding is best achieved through international collaborations, backed by robust domestic programmes in the participating countries.

    —  The UK should improve its domestic research and test facilities, but where substantial expenditure is required, such as a research reactor, or a MTR (Materials Test Reactor), international collaboration in such programmes is the preferred way forward.

RECOMMENDATION 2:

Develop a "macro-strategy" for nuclear R,D&D by Government with industry that focuses on current generation activities, near term new build, and development of future nuclear systems

  Government with industry should develop the "macro-strategy" for UK nuclear R,D&D needed to address the three time frames of; support for current generation activities, support for near term new build, and long term participation in international programmes to yield future nuclear systems.

    —  For current generation, industry will continue to lead on R,D&D linked to improving operations. New Government action is needed, however, to stabilise and encourage the underpinning science base, particularly in universities, through the teaching of nuclear topics, and research in areas such as materials behaviour, nuclear physics and thermal hydraulics.

    —  For the option of new build in the near term, new Government action is needed to expand the current nuclear skill base to provide the expertise to regulate, build and operate such systems. The favoured design for UK new build is based on LWR technologies which necessitates broadening the underpinning science base.

    —  For future nuclear systems, Government support is needed to ensure that industry can represent the UK as an effective and credible participant in international collaborations. A domestic R,D&D programme is needed so that the UK has something it can contribute, which should be in the areas where historically the UK has held niche expertise, such as graphite technology, gas cooled systems, materials performance etc.

TOR 3: TO ASSESS THE SKILL BASE AND THE STATE OF R,D&D FOR DIFFERENT TECHNOLOGIES

3.1  Summary of Key Points

    —  The UK nuclear skills base and infrastructure have been in steep decline over past decades, with key centres of national expertise lost and facilities closed. The PIU Energy Review, commented on the state of the UK's nuclear expertise base and says Government (via its different agencies) needs to take action. However, allocation of specific responsibilities is still awaited, and further delay only makes the issues more serious.

    —  The size of the UK nuclear skills base and R,D&D infrastructure is now at such a low level it now threatens the capability to reopen the nuclear option.

    —  For a sustainable future, fresh graduates with knowledge of nuclear technology need to be brought into the industry to replenish the existing workforce and ensure "trans-generational" transfer of know-how and experience.

    —  The recent HSE Nuclear Skills Audit highlighted concern that a skill shortage is developing in the nuclear sector. It calls for a "national research strategy" and "strongly commended" BNFL in its steps with University Research Alliances (URAs) to revitalise nuclear skills in the university sector, but said that "reliance must not be placed on one company",

    —  In line with the decline of the UK's nuclear skill base, there has been a steady downward trend in R,D&D output measured in terms of patents and publications.

    —  The current uncertainty over the future role of nuclear energy in the UK is further damaging the skill base, discouraging those in the industry from remaining, and discouraging those who may wish to join.

3.2  Commentary on Key Issues Above

    —  The DTI audit on nuclear skills, has recently produced a draft report on its Nuclear and Radiological Skills Study. The following is an extract from the executive summary:

    "The ability to apply nuclear and radiological technology is essential for the continued operation of existing nuclear power stations (which currently supply approximately 23% of the UK's generating capacity). The recent PIU Energy Review also spoke of "good grounds for taking a positive stance to keeping the nuclear option open"; the availability of skills would also be key to such a policy.

    Concern exists, however, that a skill shortage is developing in this sector. A number of `hot spots' already exist: in the health sector, in postgraduate education and within the regulatory organisations. It is estimated that the sector will require around 57,000 recruits over the next 15 years, excluding potential demands for new build. The key issues are identified as Promotion of the Skill Sector, Underpinning of Essential Learning Pathways, and Underpinning Education Institutions".

    —  The DTI study goes on to make a number of observations and recommendations regarding the role of R,D&D:

      "Addressing the `root causes' of failure to supply skilled people to the sector and developing the skills to those already in the sector creates a series of challenges for those responsible for the supply of skilled people. Those challenges include increasing the capacity of further and higher education to generate the volumes of technicians and capable operators to sustain the nuclear and radiological workforce, and creating a research community on nuclear and radiological science and technology".

      "The sector requires a national strategy that balances the needs of employers, the requirements of academia and Government funding criteria. Collaboration is required between those organisations that fund research (Research Councils, Higher Education Funding Councils, Employers, Government, to balance potentially conflicting requirements".

    —  The UK needs to project nuclear technology as attractive to schools and universities if the required flow of talented people into industry is to be achieved. In commenting on the fragmentation of industry and its ability to support education, the Nuclear Skills Study noted that "apart from BNFL, the input from other industry members is small and fragmented". The Study recommends that the promotion of the nuclear sector be a priority. For a sustainable future, fresh graduates need to be brought into the industry to replenish the existing workforce and ensure "trans-generational" transfer of know-how and experience. Nuclear topics need to be put back on the schools, undergraduate and post-graduate syllabuses. However to attract bright young talent the industry needs to offer the prospect of a rewarding and exciting career which contributes to the global need for clean energy, as well as the remediation of past legacies. Far-sighted flagship development projects are needed, as few people want to work in an industry with a single-minded mission focused on decommissioning and remediation.

    —  Current reliance on industry-funded R,D&D to support nuclear skills and infrastructure with minimal government support is not sustainable and puts UK at a strong disadvantage compared to our international competitors. The Nuclear Skills Study notes that the collaboration between BNFL and a number of universities is "an example of best practice, but that while BNFL commendably uses its strength to very good effect, diversity is needed, including taking advantage of all sources of support in industry, academia and Government". BNFL strongly supports this view, particularly the Nuclear Skills Study observation that a National Nuclear Research Strategy is required.

    —  Skill retention and growth is best achieved through the UK's active participation in international programmes to develop future nuclear systems, linked to a closely aligned national programme concentrating on the UK's niche areas of historical expertise.

    —  The following diagram, shows the decline in UK nuclear R,D&D output, measured in terms of patents and refereed publications, as a result of the run down of the nation's skill base.


RECOMMENDATION 3:

Rejuvenation of the UK's nuclear skill base and attraction of new graduates into the industry

  Government needs to recognise the central importance of the nuclear skills issue as part of the "macro-strategy" for UK nuclear R,D&D. Specifically, new graduates and researchers need to be attracted into the industry to replenish and broaden the skill base. To achieve this, Government action is needed promote public understanding of nuclear power, to re-establish courses with a nuclear content in universities, and to help make a career in the nuclear industry appear challenging and rewarding. Far-sighted development projects which contribute to the global need for clean energy and a stated commitment to new build will be needed to attract new talent, as many people will not choose to join an industry that has a single-minded mission focused only on decommissioning and remediation. In addition to skills, extra Government support is needed to re-establish the specialist facilities needed for nuclear research, particularly in universities.

TOR 4: TO ESTABLISH HOW GOVERNMENT POLICY ON R,D&D IS FORMULATED, IMPLEMENTED AND EVALUATED, AND THE NATURE OF CO-ORDINATION BETWEEN DEPARTMENT, EXTERNAL AGENCIES AND INDUSTRY

4.1  Summary of Key Points

    —  The UK Government wants to keep the nuclear option open but there is no coherent strategy or central Government focus to achieve this aim.

    —  The UK is lacking clear short and medium term policies and strategies for nuclear power, and hence nuclear R,D&D.

    —  Better coordination is required between Government (DTI , OST etc) and industry to develop a "macro-strategy" for delivery of nuclear R,D&D, and accountability for funding routes within Government to be specified.

4.2  Commentary on Key Issues Above

    —  Government energy policy is a combination of "free market forces" and an aim to achieve 10% electricity from renewables by 2020. The likely outcome will be up to 80% electricity generation from gas (much of it imported), closure of the baseload nuclear power stations, and possibly 10% from renewables (and heavily subsidised). The UK will increasingly fail to benefit from a reliable, secure and sustainable energy supply.

    —  There is increasing evidence that whilst the government currently does not want to prompt a programme of building new nuclear power stations, it wants to see this option remain open. However at present there is no coherent strategy or central government support to achieving this aim.

    —  The UK is lacking clear short and medium term policies and strategies for nuclear power, and hence also nuclear R,D&D. There are industry-led programmes, and industry involvement in EU and international programmes, but no major UK domestic projects.

RECOMMENDATION

  No specific recommendation is made here as the above issues are adequately covered in the other recommendations, particularly Recommendation 2 calling for a "macro-strategy" that coordinates all the key players commissioning nuclear R,D&D including industry, universities, the Research Councils, and Government etc.

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

5.1  Summary of Key Points

    —  The development of future nuclear power systems needs a multi-national effort and is beyond the resources of any single country. The UK needs to ensure it has "a seat at the table" in international programmes to shape their direction as well as not to miss out on international know-how and developments. However, to participate effectively, the UK needs to have something "to take to the table", backed up by expertise and credibility from a national programme.

    —  The lack of a government strategy for participation in international nuclear fission R,D&D programmes is having the result that industry is participating on an ad-hoc basis. This limited involvement is also declining. Without action, the UK's influence in these programmes will continue to decline. Without a supporting national programme, the UK has no leverage, and we will slowly lose out in benefiting from international know-how and technology advances.

5.2  Commentary on Key Issues Above

    —  The electricity mix used in different countries, whether European or beyond, varies widely. This difference may arise from different energy policies and the different availability of energy resources. There is therefore a strong case for energy policy at a national level. However, because of the strong international component to energy supply, there is a role for international co-operation. The international arena is particularly important in the context of collaborative energy R,D&D. Major generic projects to examine and develop new energy technology options are often beyond the financial or expertise capabilities of a single country.

    —  There is no government strategy or support for international collaborative nuclear R,D&D projects. The UK therefore relies on industry participation in these programmes. This inevitably limits the UK profile, contribution, and influence compared with our international competitors, who enjoy significant government support.

    —  The absence of any national programmes means that the UK has very little to offer in participation in international collaborative projects. Because of the lack of a coherent strategy and Government support, it is left entirely to industry to decide, on behalf of the UK, whether to participate and, more crucially, to ensure that the funding and resources are found. Frequently, because of the strategic importance of these international projects, the UK nuclear industry decides to participate, but because of finite resources and competing priorities it is rarely, if ever, at the scale afforded by our competitors.

    —  On the international stage, there are a number of collaborative programmes aimed at developing promising concepts and carrying out R,D&D on next generation and advanced nuclear energy systems. The three key international programmes are:

      International Near Term Deployment (INTD). This initiative has been launched this year by the nations partaking in the Generation 4 initiative. INTD is intended to bridge the gap between systems which are ready for deployment now and Generation 4 systems, which may be ready in two decades time. INTD is targeted at systems which are deployable by 2015. Currently, no research programmes for INTD have been defined.

      Generation IV. This programme was launched in late 2000 by the US Department of Energy to identify, assess and develop new nuclear energy systems which could make significant advances in sustainable energy development, safety, reliability, waste management, proliferation resistance, and economics. The programme is supported by the main nuclear countries (nine in total including France, Canada and Japan). Funding of US participants is provided by the US DoE with a budget of £9m. The EC has decided to fund JRC personnel, and personnel from non-participative EU countries. The other participating countries are also receiving support from their governments, on the basis that the programme is of long-term strategic importance. The UK's DTI has supported the Generation IV initiative from the beginning, but has left it to the UK's participating companies (BNFL, BE and NNC) to fund their own involvement and find the resources. Because of conflicting commercial priorities BE have already taken the decision to withdraw and NNC may be following. Generation IV is highly important to the UK to assure access to future energy options, whilst sharing the costs with the international nuclear community.

      EU Framework 5 and 6. The EU is funding work on advanced reactor designs and NNC and BNFL have significant roles in these programmes. It is important to note that 80% of the EU programmes are fusion based, and that they maintain the nuclear skill base outside the UK. EU politics have prevented the European Commission from direct involvement in Generation IV, but as a leading nuclear nation France has adopted a strong position and already begun collaborative research work.

RECOMMENDATION 4:

Effective participation in international collaborations on future nuclear systems.

  The development of future systems needs a multi-national approach and is beyond the resources of any single country, particularly when it comes to the deployment of demonstration units or systems. Here, the overall expenditure is of the order of one billion dollars. This is best achieved through international collaboration backed by robust domestic programmes in the participating countries. The UK therefore needs a credible domestic programme to contribute effectively.

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

6.1  Summary of Key Points

    —  The privatisation of the electricity generation industry and the liberalisation of the electricity trading market have coincided with a complete collapse of nuclear (fission) power R,D&D in the UK. For reasons noted above, industry has not fully stepped into the funding gap as government withdrew from funding national programmes. The remnants of the UK's nuclear skill base and infrastructure are mainly held by BNFL.

    —  The LMA White Paper says it is appropriate that the `initiative for bringing forward (new nuclear build) proposals lies with the market and generating companies'. However, only government funds can ensure the health and existence of a viable underpinning nuclear R,D&D base in the UK, and hence reopen the nuclear option.

Commentary on Key Issues Above

    —  Successive privatisation programmes have removed the provision of energy from government control and market forces now lead strategic planning. Industry has not been able to maintain the historical levels of R,D&D spend, due to commercial pressures of the liberalised electricity trading market, and lack of incentive due to the absence of any commitment to build new nuclear power stations. The result has been that key centres of expertise have dwindled and important national facilities have closed. The most notable examples are the CEGB's laboratory at Berkeley, the UKAEA's laboratories at Harwell and other sites, plus research reactors associated with universities.

    —  The following diagram shows how the UK's domestic nuclear R,D&D base in industry and academia has consolidated and declined over the past couple of decades, through successive privatisations and reorganisations of industry and underfunding in the university sector. This reinforces the case that the last vestiges of nuclear R,D&D capability in the UK reside with BNFL, and action needs to be taken to ensure that it isn't lost during the forthcoming critical period with the setting up of the LMA and possible PPP of BNFL.


    —  Historically the UK had a large number of major players, both industry and government, who commissioned nuclear RD&D. Also there was extensive support for nuclear R,D&D in universities, and at that time the UK was a world leader in areas such as materials science, reactor engineering, nuclear physics, radiochemistry etc. As part of this the UKAEA sustained the equivalent of the UK's national laboratories on nuclear matters at Harwell and other sites. When BNFL was formed, it was clearly understood that the UKAEA would continue to provide the science base for the whole industry, that is the fuel cycle and also reactor development. This arrangement worked well throughout the '70s and '80s and, indeed, until AEAT was privatised. Thereafter, in response to market forces, the company moved progressively away from nuclear science until it finally became a non-nuclear company. Thus as priorities changed and the industry consolidated and contracted important skills and facilities began to be lost.

    —  In the absence of direct funding from central government the nuclear industry looks to the Research Councils for funding of nuclear research. However as noted above, EPSRC only provides approximately £580k per year and the specific projects are not particularly related to the current priorities of the nuclear industry.

    —  The UK's nuclear skill base has declined to its current state as a consequence of successive privatisations and restructuring in the industry. Steps need to be taken during the critical period of the setting up of the LMA and possible PPP of BNFL, to ensure that this reduced skill base is not further undermined, and is enabled to support new build in the future.

RECOMMENDATION 5:

Protection of the UK's remaining R,D&D skill base during the forthcoming creation of the LMA and possible PPP of BNFL

  The UK's nuclear skill base has declined to its current state as a consequence of successive privatisations and restructuring in the industry. Steps need to be taken during the critical period of the setting up of the LMA and possible PPP of BNFL, to ensure that this reduced skill base is not further undermined, and is enabled to support new build in the future.

TOR 7: TO MAKE COMPARISONS WITH OVERSEAS COMPETITORS

Summary of Key Points

    —  UK expenditure on nuclear fission R,D&D needs to be raised to bring more in line with that of our nearest competitors. By comparison, the UK spends around 1000 times less than Japan and 100 times less than France.

Commentary on Key Issue Above

    —  The following diagram, shows the disparity between UK investment in nuclear R,D&D compared to our nearest competitors. It shows that the UK spends less than countries such as Belgium, Canada, Netherlands, Norway and Spain. The situation puts the UK domestic nuclear sector at a serious competitive disadvantage. Government support in France is channelled via the CEA, in Japan via JAERI and JNC, and the US has recently improved its network of National Laboratories.


    —  The Chief Scientific Adviser's Energy Research Review noted the UK's spending on RD&D should be raised to bring it more in line with that of its nearest EU competitors. The group laid particular emphasis on the importance of building a strong base of fundamental research activity, but confined its recommendations to waste and legacy remediation, not future nuclear systems. It felt that energy was still an insufficiently high priority for academic research and that the leading edge science was now going on elsewhere in the world.

    —  50 years ago, the UK pioneered the use of nuclear power to generate electricity. It subsequently developed a range of gas-cooled reactors, with the AGRs evolving from the earlier Magnox designs. The rest of the world developed radically different reactor designs, using water-cooled technologies. With benefit of hindsight, it is easy to say the UK should have switched earlier and benefited from standardising on a reactor design used uniformly across the rest of the world. However the UK's UKAEA saw great potential in gas-cooled designs, and they may yet be proved right, as countries such as Japan, France and the USA develop the next generation of High Temperature gas-cooled reactors (HTRs).

    —  Having invested so much, the UK has now slipped from world class to simply a strategy of closing its existing nuclear power stations. One scenario is that the UK can readily buy the technology and skills from our overseas competitors if our free market arrangements become more of a level playing field and nuclear power is commercially competitive. Yet nuclear reactors are high technology, they require an indigenous skill base and infrastructure to regulate, build and operate. The UK's regulatory and licensing arrangements uniquely recognise this, by insisting the operator or utility must be an informed customer of technical services. It is the utility that "owns" the safety case, not the vendor or the design authority.

    —  It is right to acknowledge that few nuclear power stations were built in the West during the 1980s and 1990s. Yet the investment over the last 50 years have produced reactor designs that now produce over 20% of the UK's electricity. The tide has turned with countries such as Japan, France and the USA now investing heavily to ensure that nuclear power can make a substantial contribution to a non-carbon fuel economy, and generate electricity that is secure, sustainable and economic. A future successful strategy must be based on a combination of strong national programmes, and international collaborations. The UK can benefit from buying proven technology, but it must have the skill base to construct and operate the reactors. An important lesson to learn from the UK's historic reactor programmes is that any new build must be based on a tranche programme of a standard single design to achieve the commercial benefits of scale. The UK can also benefit from co-operating in international programmes to improve fuel performance and plant reliability and develop future nuclear designs.

    —  Nuclear reactor technology is a mature industry and is still the fastest growing sector of the electricity market on a global basis. Yet much greater advances are envisaged with technical innovations currently under development. Nuclear power can have a marvellous future in the UK if supported, and make a substantial contribution to a low-carbon fuel economy.

RECOMMENDATION 6:

Closure of the gap on nuclear R,D&D compared between the UK and other leading nuclear nations

  Government should ensure that support to nuclear R,D&D is increased and maintained to comparable levels enjoyed by our competitors, to enable the UK to restore its leading role in maintaining nuclear energy as a core option for the non-carbon fuel economy.

18 September 2002



 
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