House of Commons - Environmental Audit

Select Committee on Environmental Audit Written Evidence

Memorandum submitted by the British Nuclear Energy Society and the Institution of Nuclear Engineers

1. INTRODUCTION

The BNES is the leading "Learned Society" for Nuclear Energy. The Society functions almost completely by the contributions of volunteers who provide their experience and dedication to provide information to members UK, worldwide on Nuclear Energy issues, to provide opportunities for members to publish and present papers, meet and debate issues locally, nationally and internationally, to promote nuclear energy specific training in the UK and to promote increased public understanding of the issues surrounding the use of nuclear energy.

The Institution of Nuclear Engineers (INucE) is a professional body representing a broad cross-section of nuclear engineers engaged in various aspects of nuclear technology, predominantly in the UK, but also in the USA, South Africa and Asia. Our members are involved in many aspects of the fuel cycle from fabrication, through operation of nuclear power plants, to decommissioning and waste management, as well as regulation. Our mission is to promote the highest professional and safety standards for the nuclear industry.

The BNES and INucE collectively represent the largest body of nuclear professionals associated with the UK's nuclear industries and we welcome the opportunity to contribute to the Environmental Audit Committee's enquiry. While we fully support the need to include renewables in a balanced portfolio of energy options for the UK, our response is primarily focused on making the case for new nuclear build in order to enhance security of supply and reduce our carbon emissions in the medium to long term. We would be pleased to provide further evidence both orally and in writing should the Committee so wish.

BNES/INucE believe the Inquiry is timely in view of our long held concerns and those increasingly being expressed publicly by others regarding the realism and robustness of the current UK energy policy. The Energy Sector has long time horizons. Ensuring adequate short-medium term robustness in energy supply is vital for Government as should be long term strategies which are robust, flexible and provide executable options for them and future administrations. For some of the "big ticket" generation technologies such as nuclear, plant is expensive and designed for lifetimes of up to 60 years. Investors need confidence that policy will stand the test of time.

It is but 30 months since the BNES and INucE welcomed the publication of an Energy White Paper, which promised to set a pathway towards balancing the four "pillars" of:

₂

— maintaining reliability of energy supplies;

— promoting competitive markets; and

— ensuring adequate and affordable heating for homes.

However, there was major disappointment with the actual product which purported to keep the nuclear option open yet neither took, nor indicated plans to take, practical steps to do so.

Nuclear energy was acknowledged in the report as having an important role to play in carbon free electricity production. The White Paper indicated it MAY be needed in future if carbon targets couldn't be met by the other means to which priority was given. Investment in nuclear "new build" was clouded by two issues (perceptions on waste and economics) and the requirement was identified for a further White Paper before nuclear could be considered for a role in the UK's future energy mix.

The challenges being made now to the validity of the policy enshrined in the White Paper, from many respected quarters, indicate that in its formulation, too much weight was given to short term issues and too little to the risks attached to the policy in view of the scale of the challenges ahead in delivering the "4 pillars".

BNES and INucE welcome the focus brought to several of the key issues by the EAC Inquiry. We believe that it is now timely to raise these complex topics and assess them objectively.

It is our view that the EAC Inquiry can make a major contribution to Energy and Environmental planning. It is also our view that a way forward needs to be found to ensure nuclear energy can once again become an executable option for the future.

2. RESPONSE

A. THE EXTENT OF THE GENERATION GAP

1. What are the latest estimates of the likely shortfall in electricity generating capacity caused by the phase-out of existing nuclear power stations and some older coal plant? How do these relate to electricity demand forecasts and to the effectiveness of energy efficiency policies?

The fall off in electricity generation contributed by the UK's nuclear fleet is shown in the figure below. From its peak in the mid 1990's of just over 30%, the capacity attributable to nuclear will drop to just 3% early in the 2020's when the only remaining operating unit will be Sizewell B.

All the Magnox stations are scheduled to retire by 2010, Wylfa being the last one. It has been stated that there is no prospect of life extension for these units, with their lifetime being determined by the life of the Magnox reprocessing operations at Sellafield, scheduled to conclude in 2012.

The Magnox reactor retirements are due to be followed soon after by the AGR's of British Energy. Although Dungeness B has just been granted a 10yr life extension, being the least "worked" unit in the fleet, this is not the case for the other AGR's where life extensions are much less certain.

As far as Sizewell B—a Westinghouse designed PWR—is concerned, there is no reason why it should not benefit from life extension to 60 years, beyond its original design life of 40 years, in line with accepted international norms for similar designs.

Set against the more recent projections as listed below, the decline in the UK's nuclear capacity will have a major negative impact on overall supply and carbon emissions from the electricity sector.

— The UK is now once again a net importer of gas, and is set to be importing around 80% of its gas requirements by 2020.

— By this time, current plans indicate that gas-fired power stations will provide two thirds or more of the UK's electricity.

— Substantial amounts of baseload coal and nuclear capacity are scheduled to close over the coming decade.

— Electricity demand is growing at around 1-2% annually.

— Carbon emissions have risen in each of the past two years, despite the need to put the UK on track for making substantial cuts.

— Focus on renewables brings new issues of intermittency which need to be managed.

— UK geography means that we have limited connections with other nations, so opportunities to import fuel supplies or power in times of shortage are limited.

B. FINANCIAL COSTS AND INVESTMENT CONSIDERATIONS

What are the main investment options for electricity generating capacity? What would be the likely costs and timescales of differing generating technologies?

Costs

Nuclear generating costs are dominated by the cost of capital and its financing.

We show illustratively the situation for AP1000 but the effect is indicative of any modern LWR technology. Many studies carried out worldwide indicate the cost/kW installed (or "overnight capital cost") lies within a consistent band. Currently competitive advanced systems can be delivered for US$2000/kW. This yields a generating cost of 3p/kWh at 8% but 4p/kWh at 15% rate of return on investment. Sensitivity of generating cost to a number of parameters is illustrated below, other factors such as load factor, economic life, construction period etc all impact on the generating cost.

Recent studies into the relative economics of nuclear and other alternatives have shown nuclear to be very competitive. One such international study from OECD[20]20 is summarised in the following chart. It shows that nuclear is extremely competitive with other generation options.

A corresponding UK study by the Royal Academy of Engineering[21]21 came to a similar conclusion (the darker elements shown for wind represent the costs of backup generation due to intermittency):

One point which is very important to note with respect to nuclear generating costs is the relative insensitivity to the price of the raw fuel. Costs of the raw material (uranium) only account for around 5% of the total generating cost and the overall fuel contribution (allowing for enrichment and fuel fabrication) is typically around 15-20%.

In this context it is helpful to consider the likely trends in fossil fuel prices. The following chart shows projected cost of gas, oil and hard coal in Europe over the coming decades. Recent increases in gas and oil prices are already impacting on the UK's economy and the projected increases in the EU will compound the effect oil and gas will have on economic stability.

Regarding timescales for introducing new nuclear stations, international experience with standard designs (France, Japan, Korea, China) indicates typical construction times of five years for the first unit with timescales for subsequent units in a series of the same design being 36-48 months depending on the design, local circumstances and whether built in pairs or as single units. The following charts illustrate the substantial improvements in capital cost and construction schedule achieved in South Korea through series build of near-identical stations.

As shown in the figure above, one important factor to take into account for nuclear generation compared with other forms in the UK is that nuclear has a unique hurdle to overcome prior to implementation being possible. Notwithstanding approvals through the "normal" planning process of approximately two years which would apply to large scale deployment of any generation technology, nuclear technology has to undergo regulatory assessment, or licensing, of the design for utilisation in the UK. This process would typically take three years (assuming that the design being assessed has already been approved elsewhere in the world). Arguably nuclear also has a second hurdle in that the 2003 White Paper indicated a further White Paper would be required before any consideration could be given to nuclear energy having any place in the UK's future generation mix.

The timescale impact of this second hurdle would be determined by Government but it is difficult to imagine a consultation, evaluation and White Paper production being completed in less than around nine months. Thus, even in the most optimistic circumstances, if a decision to proceed were taken now, it would be 2015 before electricity would be delivered to the grid. This means that preparatory steps such as licensing need to be taken now. This does not in any way imply a commitment to build new nuclear plants, but it does ensure that the timeline illustrated above could be achievable and that new plants could be built on a timescale to match closure of some of the retiring stations. This process is relatively low cost (around £10 million) but would have the added benefit of ensuring skills and capabilities within the UK's nuclear regulatory body were up to date with international best practice.

With regard to nuclear new build, how realistic and robust are cost estimates in the light of past experience?

With hindsight, UK past experience contains a number of case studies in how nuclear projects should not be delivered. International norms over the past 10-15 years are a much better guide and give confidence to any figures and timescales quoted.

The UK (for what appeared to be very good reasons at the time) chose to concentrate on the gas cooled Magnox system. All the 11 reactors built were different. There was almost no benefit in learning from experience or series build. Different consortia were used to design and construct the different units. A similar path was followed for the AGR's where again there the temptation to "improve" the design after each round of building proved to be irresistible.

Historical cost overruns for both systems can be attributed inter alia to:

— "design as you go" approach;

— delays in approvals processes;

— "preference engineering" (the regulators asking for systems to be made similar to what they were familiar with, rather than simply assessing whether a system met the safety criteria or not);

— little prospect of modularisation of major components and a very high degree of on site build;

— a "cost plus" culture in regulated markets, which drove suppliers towards overruns and overspends;

— changing political/legislative/regulatory requirements.

This contrasts heavily with international best practice which is to adopt a proven international design, to resist the temptation to make it "better", and to build a number of identical units as a series.

Both the Magnox and AGR systems have however in general worked well, with good safety records, delivering reliable carbon free baseload electricity for the UK. Also Sizewell B which turned into a one-off imported design with significant redesign during the licensing approval was completed within budget and schedule.

Now however, there is an increasing body of international evidence to give confidence that construction and operating costs for future nuclear plant are predictable. This includes:

— In countries such as France, China, Japan and South Korea, the nuclear industry has demonstrated a good track record of delivering modern designs on time and within budget.

— Nuclear plants around the world show very good operational performance. (There has been significant improvement in nuclear plant reliability over the past 10-15 years, with typical load factors in the 80-90% range. Sizewell "B", which is the nearest equivalent UK plant, has delivered similar levels of reliably over its first 10 years of operation).

— Consolidation of nuclear reactor vendors through the 1990s has led to the development of "standardised" internationally recognised advanced designs. As these designs incorporate many years construction and operating experience, utilise proven technology, and robustly address the regulatory issues that were previously of concern, there is much more confidence in construction times and operational performance than hitherto.

— Development of improved materials for construction, and better operational management, allow more reliable operation at high levels of output.

— Reactors are now designed for improved maintainability which reduces operating costs and increases overall output.

— Modern reactors make very efficient use of the fuel, and so produce much less waste than earlier designs.

— Modern designs incorporate fewer components than older reactor concepts which, together with modern construction techniques such as modular construction, makes today's plants more straightforward to build.

— Modern reactors are designed for safe, cost-effective decommissioning.

What are the hidden costs (eg waste, insurance, security) associated with nuclear?

There are no "hidden" costs in any of these areas.

Calculations of generating costs include allowances for waste management, decommissioning and waste disposal. From the earlier breakdown of total generating cost, it can be seen that such costs are a relatively small proportion of the overall generating cost—typically less than 5% of the overall cost in total.

As far as insurance is concerned cover is provided on a commercial basis against a requirement set according to the international Paris Convention. In the UK this is set out in the Nuclear Installations Act. The current limit of liability is £140 million, but this figure is shortly set to rise to

700 million.

Security measures are set by the Office of Civil Nuclear Security (OCNS) under the Nuclear Industry Security regulations (2003) and follow international guidance. All security costs are covered by the generating costs as part of operations and maintenance and currently amount to around 1.5% of the operating budget. For new stations, where robustness of design ensures that security issues are satisfactorily addressed, costs would be similar to those for existing stations.

How do the waste and decommissioning costs of nuclear new build relate to the costs of dealing with the current nuclear waste legacy?

They do not. Future waste management costs are a very different consideration from the costs of dealing with the historic legacy which was in the main generated under a very different nuclear industry and energy market framework. The existing UK legacy should not be used to deny future generations the benefits of reliable carbon free baseload electricity from new nuclear power plant.

The Magnox system is very fuel intensive. This, together with the extensive prototypic radiochemical plants constructed at Sellafield and Dounreay in the period from the late 1940's to the early 1980's in support of a reprocessing and fast reactor fuel cycle, is largely responsible for the UK extensive legacy waste and its high cost. The figure below shows the differences between wastes arising from a modern LWR like the AP1000 compared with a Magnox unit of equivalent output.

Overall it is vital to put potential waste arising from new build into context both in terms of volume and in the difficulty of dealing with it compared with the existing inventory.

If 10 new reactors were built to replace the UK's retired and retiring fleet of 11 Magnox and 7 AGR stations, less than 10% would be added to the existing inventory of high and intermediate level waste. Less than 3% would be added to the low level waste inventory. Furthermore the type of waste produced by modern reactors is much easier to deal with and there are internationally accepted, well engineered norms for its containment, handling and storage. The reactors themselves are also much easier to decommission, having been designed with this in mind.

How confident can we be that the nuclear industry would invest adequately in funds ring-fenced for future waste disposal?

With or without any further reactors, the UK will need a long term management route to be identified for the baseline high and intermediate level waste inventory of 478,000 m3. The Committee on Radioactive Waste Management (CoRWM) will recommend the long term management route(s) for UK waste and spent fuel to Government next July. The work they have published to date suggests that deep disposal or interim surface storage will be the preferred route.

The latest cost estimate from the NDA for management of the legacy is around £56 billion (undiscounted total costs)[22]. A large proportion of this cost relates to the safe and effective retrieval of wastes from their current storage, rather than directly to the treatment and management of the wastes.

International experience shows that waste management costs from current power generation are a relatively small part of total nuclear fuel cycle costs.[23] There are well-established approaches to funding it in most countries. Funds set aside now, and in the future, would be expected to earn reasonable rates of interest for many years before significant draw-downs are required (eg for a geological repository, which may not need to be in operation for decades). As a result, the contributions required today can be modest. As examples, the USA levies 0.001 USD /kWh (

0.0008) on nuclear electricity production. This has led to a fund of $26 billion paid to the US Treasury. Sweden levies 0.01 SEK (0.001), Japan 0.13 Yen (0.001) and the Czech Republic 0.05 CZK (0.002). The size of the payments are generally kept under review and increased or decreased if necessary, based on best estimates of future costs. The money that accumulates is available to pay for the packaging, transport and disposal of spent fuel and Intermediate Level Waste.

Some countries without such levies require the waste producers to set funding aside. For example, Switzerland has a government controlled trust fund. Germany, where the funds already total approx. Euro 25-30 billion, leaves the fund with the power utilities.

In Sweden a fund established in 1982 covers spent fuel encapsulation and disposal, nuclear power station decommissioning and waste disposal, along with the R&D necessary to implement all these activities.[24] The fund is invested in the National Debt Office and overseen by a board appointed by the government. The amount of money that each contributor pays from year to year varies, depending on the most recent estimates of future costs and how well the investments made by the fund have performed. Cost estimates are produced by the implementer, SKB, and submitted to the regulatory authority, SKI, for review. Utilities must provide guarantees to compensate for any fees which might not be paid into the fund if reactors are shut down early (as is present Swedish government policy) and if the costs of waste management prove higher, or are needed earlier, than currently expected.

A similar model in the UK might be to require the operators of new nuclear power stations to pay into a central fund, administered (directly or indirectly) by the government. For a single reactor of 1,000MW output and a life of 60 years, the total fee paid, if the levy was set at 0.1p/kWh, would amount to about £500 million, before accumulation of interest over the life of the fund.

For comparison, the estimated cost of the Finnish spent fuel storage and disposal programme, to accommodate the fuel and waste from four nuclear power stations is about £850 million. Sweden estimates[25] that its spent fuel encapsulation plant will cost about £600 million and the spent fuel repository about £1,100 million. This assumes that the 11 operational reactors operate for 40 years. Together with the two reactors that have already closed, Sweden's total nuclear installed capacity amounts to about 10GW, a very similar value to that of the UK which totals almost 14GW for historic stations and those that continue to operate.

What is the attitude of financial institutions to investment in different forms of generation?

In terms of scale, investment in new nuclear plant is not unique in the energy infrastructure sector. Gas pipelines and oil platforms and LNG facilities can actually cost more depending on the installation and location.

Financial institution appetite and requirement for rate of return is therefore highly dependent on the perceived risks. Where there are unresolved policy, planning and regulatory issues, as is the case in the UK currently, then it is difficult to begin to argue the case for progressing any investment at all. If however, as for example in Finland, Parliament has decided as a matter of policy that a country will have nuclear in its forward energy mix, an international design has been chosen and has regulatory approval, a price has been agreed, the public have volunteered to host the reactor in their community, waste policy has been determined and the liabilities for the utility are clear, financing can and has been secured from commercial sources.

If waste policy is clear and the utilities' obligations determined at the outset; if a design has generic approval; if the planning process is well defined and appropriately streamlined, then risk becomes easier to assess and accept.

For nuclear energy in the UK clarity in waste policy is essential as it is currently a significant deterrent (without a statement of policy the owner's liability is potentially uncapped). Recognition of the fact that nuclear is carbon free would have a further significant impact if due credit were given.

Recent analysis by PricewaterhouseCoopers[26] concluded that new UK nuclear plants would be readily financeable in principle on a "project finance" basis, but that a somewhat higher cover ratio would be required than for a conventional project due to the risks of construction overrun and regulatory issues. PWC further concluded that once the project was underway, it would show resilience to price fluctuation risks, because of the low variable cost component. This in turn would enable attractive offtake contracts to be developed.

How much Government financial support would be required to facilitate private sector investment in nuclear new build?

Provided the right market framework is in place then it will not be necessary for Government to provide direct financial support. Clarity in the previously mentioned waste policy is essential as is a declaration of nuclear's acceptability as a component of the UK's future energy mix.

Credit as a non carbon contributor and clarity of the long term market for carbon dioxide allowances would increase the chances of nuclear energy being successfully delivered within the private sector.

What impact would a major programme of investment in nuclear have on investment in renewables and energy efficiency?

Nuclear is an energy dense, reliable baseload technology. The whole of the UK's wind energy fleet—both on and offshore—last year generated 1.9TWh of electricity.[27] This is slightly over half the annual output from a small Magnox station such as Sizewell A. This is not intended to be a negative comment with respect to wind, but rather an attempt to put into context the extent of the challenge in dealing with the generation gap if new nuclear stations do not replace the retiring ones.

So important are the challenges before us to have cost effective, carbon free, secure, affordable energy that we need to ensure all such technologies can contribute to their full potential. It is also important to ensure that a balanced portfolio is available. Furthermore it is wrong to treat generation (of any form) as an "either/or" with energy efficiency. Energy efficiency is important in its own right, irrespective of the means selected to deliver the electricity which is needed by the nation. Appropriate incentives and mechanisms should be put in place to improve prospects to deliver energy efficiency insofar as this is cost effective. Equally it is wrong to treat nuclear and renewables as an "either/or" choice. Both are needed. If it wished, Government could set minimum amounts for each technology as it has done by setting the current 2010 target of 10% via the renewables obligation (RO). A similar obligation approach for nuclear—alongside the RO—could ensure both had a firm place in the generation mix, without the technologies necessarily having to compete.

C. STRATEGIC BENEFITS

If nuclear new build requires Government financial support, on what basis would such support be justified? What public good(s) would it deliver?

The following aspects of nuclear generation contribute to the overall public good:

— reliable secure baseload electricity over an operating life of typically 60 years;

— provision of very substantial quantities of virtually carbon-free electricity;

— easy maintenance of strategic fuel stocks (it is possible to store a year's fuel requirements for a fleet of 10 modern reactors in a building no larger than a small house);

— major improvement to the UK's balance of payments as a result of significant reduction in the volume of gas needing to be imported.

To what extent and over what timeframe would nuclear new build reduce carbon emissions?

The significant contribution nuclear power makes to reduced carbon emissions can be seen from the French data (see charts below). This shows a major reduction in French carbon dioxide emissions, which maps exactly onto the increasing usage of nuclear energy in France. If new nuclear plants were to replace retiring nuclear stations in the UK, which would otherwise be replaced by gas-fired stations, then it is estimated that carbon emissions will be reduced by 3 million tonnes of carbon dioxide per year over the next 20 years. However, in the short term carbon dioxide emissions are likely to increase as coal and gas plants take up the demand previously met by nuclear plants which are closing.

The contribution made by nuclear new build in the UK would depend on the scale and timeframe of any new build programme. The contribution would also depend on what assumptions are made regarding what type of generation is being displaced by the nuclear generation.

An illustration of what could be achieved is shown in the graph below. This assumes 10 new 1GWe nuclear power stations are built on a timetable of one new power station per year, with each station operating for 60 years. It has been assumed that the nuclear power stations will displace gas-fired generation, with emissions of 0.4 MtCO₂/TWh.

At their peak, for 50 years, these plant would generate 79 TWh annually, avoiding the emission of over 31 MtCO₂ each year. Over the entire 70 years period shown in the chart, these nuclear stations would avoid the emission of nearly 1.9 billion tonnes of carbon dioxide.

In comparison total UK carbon dioxide emissions for 2004 were around 580 million tonnes.

To put the scale of the challenge into context in percentage terms—the UK has a target of cutting carbon dioxide levels to 20% below 1990 levels by 2010. Yet—with just six years to go, in 2004 the reduction in emissions had only reached 4.2%, so more than three quarters of the savings still need to be made. Indeed emission have risen in each of the last two years, and are now higher than at any time since 1996, as illustrated in the following chart[28].

Looking to the longer term, it is important to think beyond purely the electricity sector, when looking at carbon emissions. The following chart shows a breakdown of total UK energy usage:

It can be clearly seen that, even if all the carbon emissions associated with electricity production were removed, more must be done if the UK is to get close to the target of a 60% overall reduction by 2050. Transport is one of the biggest contributors to emissions, and if a 60% cut is to be realistic, then major changes in the way we look at transport have to take place. The most credible approach is a move to hydrogen-powered vehicles, where the hydrogen itself is produced from a much larger electricity sector—fuelled by nuclear, renewables and fossil plants with carbon capture technology. This allows both the maintenance of viable transport systems and the achievement of major cuts in CO₂ emissions.

To what extent would nuclear new build contribute to security of supply (ie keeping the lights on)

Reliable baseload generation is a key feature of nuclear energy—nuclear stations operate round the clock, day in and day out, irrespective of weather conditions. Apart from a periodic and predictable maintenance shutdown, the stations operate continuously at full power, providing the kind of baseload power a leading 21st century economy demands.

Modern nuclear power stations need to be re-fuelled only at infrequent intervals, typically every 12 to 18 months. Even if a refuelling could not take place as scheduled, the reactor could continue to operate for several months, albeit that the maximum power output would slowly decline. Considerations of fuel availability are therefore very different for a nuclear station than for a coal or gas-fired station, where a continuous supply of new fuel is required in order to generate electricity.

Furthermore, it is highly credible to retain strategic long-term stocks of nuclear fuel, just in case there ever were to be any sustained disruption to supply. The fabricated fuel to supply a fleet of ten new reactors (enough to supply 20% of UK electricity needs) for a year would occupy only around 100 cubic metres. This fuel could therefore be stored in a building no larger than a very modestly-sized house.

Nevertheless it is still sensible to consider the availability of uranium supplies and to ask whether this represents a realistic risk of interruption that might lead to loss of power production.

Uranium is ubiquitous on the Earth, indeed it is approximately as common as tin or zinc.[29] Uranium ores are found in plentiful quantities in many countries. In particular, Australia and Canada are both major exporters, as well as both having long histories of political stability. Additional reserves are known to exist in Kazakhstan, South Africa, Namibia and Russia.

World Uranium Resources (RAR)
[t U] Reasonably Assured Resources as of 1/1/2001, Cost range US$80/kg U or less (OECD 2002)

(1) In situ resources t=metric tonne NA= Data not available

KNOWN WORLD URANIUM RESOURCES[30] [1000 tU]

Cost Category

Resource Category	$0-40/kgU	$40-80/kgU	$0-80/kgU	$80-130/kgU	$0-130/kgU
Reasonably Assured Resources (RAR)	>666	>555	2,340	718	3,220
Estimated Additional Resources— Cat.I (EAR-I)	>257	158	745	244	1,079
TOTAL	>923	>713	3,085	962	4,299

Independent assessment[31] puts the total scale of conventional uranium resources at around 11 million tonnes, enough to last for around 170 years at current consumption rates (much longer than the corresponding figures for oil and gas). This would be enough to provide a lifetime's fuel for all of today's nuclear reactors worldwide, plus all those which might be built as far ahead as 2050, even in a scenario where world nuclear capacity were to triple to 1,200GW by that date.

Uranium ore is imported to the UK, and other countries where nuclear fuel assemblies are manufactured, where it is refined, enriched and converted into finished fuel. The transport of uranium ore does not require specialised ships or import facilities.

The diversity of source countries, the fact that several of these nations have long and stable political histories, the excellent track record of supply reliability, and the fact that there are few infrastructure considerations means that sufficient supplies of uranium to the UK can be considered to be assured.

The quantities of fuel involved for a nuclear plant are much lower than for fossil-fuelled stations. Whilst a coal-fired power station might consume several million tonnes of coal in a year, a modern 1 GW nuclear station will typically require a few tens of tonnes of fabricated fuel for each re-fuelling operation. As noted earlier, this might take place only every 12 or 18 months. Finally, again as noted earlier, nuclear energy also provides valuable cost stability, as well as supply reliability. This is because the cost of raw uranium ore accounts for only 5-10% of the overall generating cost of electricity from nuclear stations, whereas the cost of gas-fired generation is dominated by the cost of the gas (which accounts for 60% or more of the full generating cost). Increases in global market prices for fuel therefore have a much greater impact on the costs of gas-fired generation than they do on the costs of power from nuclear.

Is nuclear new build compatible with the Government's aims on security and terrorism both within the UK and worldwide?

In today's society there is a wide range of potential terrorist targets and it is important that the Government and organisations alike consider the possible threats, consequences and contingency plans that may prove necessary. The potential targets include many aspects of the nation's activities on which we depend for everyday life to proceed as normal. These therefore include—amongst others—public transport systems, iconic and political targets, and components of the infrastructure that provide important services to the public and industry. This includes the energy and utility industries, in the form of fuel import facilities, pipelines, storage facilities, power stations and transmission systems and in this context, it is appropriate to consider the physical security of nuclear power stations, as one component of the national security assessment.

Government aims to ensure the security of nuclear material, nuclear licensed sites, sensitive nuclear information and those working in the industry. These objectives are overseen by the government's security regulator Office for Civil Nuclear Security. The Director makes an annual report to the Minister on these matters. In his 2005 report[32], the Director continues to affirm confidence in the security provisions of the nuclear industry and that the security measures applied are proportionate to the threats faced.

Nuclear power stations are amongst the most robust civil structures in the world and have a multi-layered defence against possible terrorist attacks. They are also subject to rigorous security arrangements that include security vetting of all staff and contractors, identity management and access control. As a result, their potential vulnerability to terrorist or other malicious threats is minimised.

Modern reactors are built with massive reinforced concrete shields and are designed to safely withstand extreme events, both natural and manmade. Their structural resilience to earthquakes and the thickness of the shielding make them extremely robust against possible attack, for instance by hijacked passenger aircraft. Detailed analysis has shown that penetration of the radioactive core by an aircraft under such circumstances would not take place.

In addition to their physical robustness, modern nuclear reactors are protected by extensive safety systems. The extent and number of these systems is such that several systems would need to be damaged, and no action taken by operators or emergency responders, before a significant release of radioactivity to the environment might occur. The design is such that it is difficult to defeat or damage enough of the systems to bring about a major release of radioactivity. Emergency arrangements are in place to immediately shut down reactors in the event of a heightened terrorist threat against them. These arrangements are regularly tested.

D. OTHER ISSUES

How carbon-free is nuclear energy? What level of carbon emissions would be associated with (a) construction and (b) operation of a new nuclear power station? How carbon-intensive is the mining and processing of uranium ore?

Nuclear energy is a very low carbon form of generation. Its lifecycle emissions per kilowatt-hour are similar to those from renewable generation. This is the case even when emissions across the full lifecycle of the nuclear industry are considered.

A comprehensive IAEA study[33] shows both direct and indirect emissions for different generation sources. This concluded that even the "high" end of the range of emissions for nuclear energy is still almost a factor of twenty lower than the best fossil fuelled plant (latest gas-fired technology) and a factor of over 60 lower than older, coal-fired technology. The "low" end of the nuclear range (representative of more modern technology) shows a further improvement by more than a factor of two on even this performance. This assessment takes account of the emissions associated with all aspects of the nuclear cycle—including the construction, operation and decommissioning of nuclear power stations, as well as the uranium mining and enrichment, and the manufacture and spent fuel treatment of nuclear fuel.

A significant contribution to the emissions from nuclear power generation is in the carbon content of the energy used in the different processes of the fuel cycle. This is one reason why emissions vary from site to site. For example, the enrichment process is energy intensive. In the US electricity from coal-fired stations is used to power the enrichment plant, whereas in France the electricity used comes from nuclear power plants. Consequently, the lifecycle emissions of nuclear power plants using uranium enriched in France are lower than those from plants using fuel enriched in the US.

The results of this study and two others into the lifecycle emissions of different forms of generation are summarised below. These results show that emissions for nuclear, wind and hydropower are much lower than those of fossil fuels.

Lifecycle Emissions gCO₂/kWh

	Nuclear	Wind	Hydro	Gas	Coal
IAEA[34]	9-21	10-48	4-236	439-688	866-1,306
International Journal of Risk Assessment & Management[35]	8.9	15	16	Fossil fuels:	500-1,200
Vattenfall[36]	3	10	5	409	696

The Vattenfall study includes a typical breakdown of emissions for the different stages of the nuclear fuel cycle, shown below.

Stage of Nuclear Fuel Cycle Emissions
gCO₂/kWh

Extraction/leaching (mining) 1.1

Conversion 0.2

Enrichment 0.1

Fuel Fabrication 0.2

Operation of Nuclear Power Plant (NPP) 0.2

Building & Decommissioning of NPP 0.6

Waste Facility Operation 0.4

Build/Decommissioning of Waste Plant 0.1

Should nuclear new build be conditional on the development of scientifically and publicly acceptable solutions to the problems of managing nuclear waste as recommended in 2000 by RCEP?

As mentioned earlier, the answer to this point is a clear "No". This is because so much has changed internationally since the RCEP report. The UK's legacy is a result of historic choices of system and an extensive prototypic programme pursued 40-50 years ago. Wastes from potential new build are nothing like as challenging or problematic. Safe disposal is being routinely demonstrated in other countries. However BNES and INucE recognise the very important challenges ahead in gaining political and public acceptability. Early implementation of the outcome of CoRWM's study and conclusions will be essential as will be good progress towards satisfactorily treating and packaging the legacy wastes in readiness for final disposal.

CoRWM's interim conclusions were published recently, indicating the direction in which their thinking is going:

3. CONCLUSIONS

The BNES and INucE strongly support the inclusion of nuclear power in a balanced future portfolio of energy generating options for the UK. In summary:

The Generation Gap

Financial Costs and Investment Decisions

Strategic Benefits

— Provision of vast quantities of electricity with virtually no associated carbon emissions;

— A substantial contribution to diversity and supply security in the generation portfolio;

— Valuable price stability in the generation mix, at a time of highly volatile and uncertain fossil fuel prices;

— A major impact on UK balance of payments as a result of the reduced dependence on imported gas;

— Valuable, highly skilled long-term jobs in a crucial sector of the UK skillbase, and in communities which often have few comparable employment opportunities.

Other Issues

— Work on pre-licensing of established international designs should begin as soon as possible. This will help to maintain key skills and will cut the lead time for delivery of any new nuclear plant, without in any way implying a commitment to build.

— The current lack of a formal waste policy should not be seen as an obstacle to taking steps immediately to encourage nuclear build. There is a process in place to deliver such a policy and the solution will be the same irrespective of whether or not new build takes place.

The BNES and INucE are grateful for the opportunity to contribute to the Environmental Audit Committee's enquiry and strongly recommend that measures are taken urgently by Government to allow nuclear power to contribute within a balanced energy mix (including fossil and renewable technologies) that ensures future security of supply for the UK and contributes to a significant reduction in carbon emissions for the benefit of future generations.

26 September 2005

20 20 "Projected Costs of Generating Electricity"; OECD/NEA/IEA; 2005. Back

21 "The Cost of Generating Electricity"; Royal Academy of Engineering; 2004. Back

22 "NDA Draft Strategy-Appendix 4"; Nuclear Decommissioning Authority; 11 August 2005. Back

23 Typically, the back-end costs of nuclear electricity generation are only about 5 to 10% of the total costs-about half the fuel costs, for example "Nuclear Electricity Generation: What Are the External Costs?", NEA, 2003 ISBN 92-64-02153-1, OECD/NEA, Paris http://www.nea.fr/html/ndd/reports/2003/nea4372-generation.pdf Back

24 "Plan 2003. Costs for management of the radioactive waste products from nuclear power production". Svensk Karnbranslehantering AB, July 2003. SKB Report TR-03-11. http://www/skb.se Back

25 http://www/skb.se Back

26 "Financing New Nuclear Power Stations"-Paper presented at BNES "Fuel for Thought" Congress, Newport, July 2005. Back

27 Digest of UK Energy Statistics -DUKES-Table 7.4. Back

28 "Second Annual Report on the Implementation of the Energy White Paper"; DTI/DEFRA; July 2005. Back

29 "Supply of Uranium"; World Nuclear Association Information and Issue Brief; August 2004 (http://world-nuclear.org/info/inf75.htm) Back

30 "World Uranium Deposits", www.antenna.nl/wise/uranium) Back