House of Commons - Environmental Audit

Select Committee on Environmental Audit Written Evidence

Memorandum from the Open University Energy & Environment Research Unit, Part A:

NUCLEAR'S INHERENT INSECURITIES

1. SELECTION OF QUESTIONS AND ANSWERS

This section of our submission attempts to provide some answers to some of the questions posed in the range of issues that constitute the remit of the Inquiry. It will address two of the subset of questions in the bullet points under Q4:

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

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

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

We also provide some guidance on two sub-questions under Q3:

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

What is the attitude of financial institutions to the risks involved in nuclear new build and the scale of the investment required?

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

The first question addressed here is: Is nuclear new build compatible with the Government's aims on security and terrorism both within the UK and worldwide?

2. BACKGROUND

"The safety and security of nuclear activities around the globe remain a key factor for the future of nuclear technology. . . The IAEA [also] has strengthened its co-operation on nuclear security issues with other international organizations, including the UN and its specialized agencies, Interpol, Europol, the Universal Postal Union and the European Commission." Statement to the 58th Regular Session of the United Nations General Assembly by IAEA Director General Dr Mohamed ElBaradei, 3 November 2003.

2.1 Introduction

The importance credited to nuclear safety by Dr ElBaredei in the above quotation is unsurprising. What is new and important is the coupling of safety with security.

In his speech, he went on to emphasise:

"In light of the increasing threat of proliferation, both by States and by terrorists, one idea that may now be worth serious consideration is the advisability of limiting the processing of weapon-usable material (separated plutonium and high enriched uranium) in civilian nuclear programmes—as well as the production of new material through reprocessing and enrichment—by agreeing to restrict these operations exclusively to facilities under multinational control."

It is arguable that this is a remarkable statement coming from the director of the United Nations' agency charged with the promotion of the nuclear industry. But when we consider he made this comment barely two years after the terrorist attacks of 9/11 in the United States, it becomes more explicable.

Dr ElBaredei further pointed out that:

"One convention that has gained increased attention recently is the 1979 Convention on the Physical Protection of Nuclear Material (CPPNM). In the past two years, 20 additional States have become party to the Convention, reflecting the importance of the international nuclear security regime."

As a result of several terrorist events in Britain in 2005, thankfully none involving radioactive materials, along with both Government ministers producing anti-terrorist initiatives, and Parliament debating their pros and cons, such as the Anti-Terrorism Act, this year has seen terrorism rise to and remain at or near the top of the public and political agenda.

The context was set In Madrid on 10 March 2005 when UN Secretary-General Kofi Annan told an international conference of some 400 anti-terror experts—meeting to mark the first anniversary of Madrid's own major terror attack on its suburban rail system a year earlier—that terrorists must be denied the means to carry out a devastating nuclear attack.

In urging UN member states to adopt the international convention on nuclear terrorism, Mr Annan made this blunt statement:

"Nuclear terrorism is still often treated as science fiction—I wish it were." He added:

"But unfortunately we live in a world of excess hazardous materials and abundant technological know-how, in which some terrorists clearly state their intention to inflict catastrophic casualties." he said.

"Were such an attack to occur," he added "it would not only cause widespread death and destruction, but would stagger the world economy and thrust tens of millions of people into dire poverty."

In the same month of March 2005—but only made public six months later (see: "Pentagon Revises Nuclear Strike Plan: Strategy Includes Pre-emptive Use Against Banned Weapons", by Walter Pincus, Washington Post 11 September 2005)—an internal paper* prepared for the Pentagon's Joint Chiefs of Staff argued for consideration of the use of nuclear weapons against an enemy that is using, or "is about to use", nuclear or other WMD against US military forces or the civilian population of the United States. If put into practice, this strategy would significantly both raise the nuclear stakes, and lower the nuclear threshold.

[*US Doctrine for Joint Nuclear Operations:

http://www.globalsecurity.org/wmd/library/policy/dod/jp3_12fc2.pdf]

These high social stakes underline the importance of the need to ensure the best possible security applied to nuclear installations and materials.

2.2 Responses to Q4

2.2.1 Context: Nuclear Security Worldwide

Six months ago (16-18 March 2005), the World's nuclear watchdog, the United Nations' International Atomic Energy Agency (IAEA) held a timely international conference in London, co-hosted by the UK government, on "Nuclear Security: Global Directions for the Future."

It was the culmination of over three years planning, as immediately after the terrorist events of "9/11" in the United States in September 2001, the IAEA General Conference—which always meets annually in Vienna in September—requested a review of the Agency's activities relevant to preventing nuclear terrorism.

The first day of the Nuclear Security Conference reviewed the achievements and shortcomings of international efforts to strengthen nuclear security; the second day explored how the international nuclear security regime is adapting to new measures—and the IAEA role in underpinning them; the third day focused upon how the international community can reach a common understanding to better respond to the global threat of nuclear terror, detect and prevent it.

Richard Wright, the UK representative on the IAEA Board of Governors, summed the perceived situation after three days of intensive exploration by technical experts and decision-makers with words "Nuclear terrorism is one of the greatest threats to society".

The full findings of the conference are available on the IAEA web site

(www.iaea.org/NewsCenter/News/PDF/conffindings0305.pdf); here we highlight some of the more pertinent of them.

"Priorities for strengthening nuclear security include continued efforts to enhance the prevention of terrorist acts; the physical protection and accountability of nuclear and other radioactive material in nuclear and non-nuclear use, in storage and transport, throughout the life cycle, in a comprehensive and coherent manner. A graded approach should continue to be used under which more stringent controls are applied for material or activities that pose the highest risk; for example, particular attention should be given to high-enriched uranium or plutonium."

It added:

"The fundamental principles of nuclear security include embedding a nuclear security culture throughout the organizations involved. By the coherent implementation of a nuclear security culture, staff remain vigilant of the need to maintain a high level of security. The long-term sustainability of nuclear security efforts is a primary concern. The investments made in States, through their own efforts and through assistance programmes, must be sustained in order to continue to upgrade or maintain an adequate level of security. While the level of threat may change from time to time, an effective level of nuclear security must be appropriately maintained."

This is clearly true. Later in this submission we demonstrate how, in certain respects, these principles are not being adequately met in UK practice.

A few months after the March meeting, hundreds of delegates from some 80 countries attended an IAEA conference in Vienna 4-8 July to consider and adopt amendments to the international Convention on the Physical Protection of Nuclear Material, which is a complementary regime to that controlloing nuclear terrorist threats.

The international nuclear watchdog is determined to keep vigilant, because its leadership and membership are all too aware of the negative implications for the nuclear generation industry were either a terrorist (or less likely , a wartime) attack to take place anywhere in the world against a nuclear power plant or nuclear installation, or illicitly obtained nuclear material be used in a so-called "dirty radiological bomb" in a dense urban area.

Here is a horrifying scenario painted recently by the sober finance sector magazine, Business Week, to mark the fourth anniversary of "9/11"

"At 8.30 am on a Tuesday morning, as commuters converge on Manhattan, an al Qaeda operative explodes a dirty bomb outside the New York Stock Exchange. The device, while not especially powerful, contains a radioactive payload—in this case, caesium extracted from radiological equipment that was stolen from a New Jersey hospital by a sleeper working there as a lab tech.

The initial blast kills only a few dozen people, but radiation is quickly dispersed by the prevailing winds. Minutes after the explosion, New York City Police officers arrive—still unaware of the real nature of the blast. But when a radiation detector in one officer's car goes wild, it becomes clear that a dirty bomb has detonated in the financial center of America's biggest city.

Word of the explosion reverberates throughout New York. Many residents panic—despite assurances from the mayor and police chief that contamination levels would exceed government limits only in about 40 city blocks. And by 3 pm, half of Manhattan has tried to leave, clogging trains, highways, and bridges.

Six months later, the financial district remains largely off-limits, and the local economy is limping along amid a cratering of business confidence, the collapse of the tourism industry, and a property market in free fall. Economists put the eventual economic losses at an astronomical $1 trillion . . ."

["New York Takes Another Hit—It has been readying itself for a dirty bomb since 9/11, but . . ." Business Week. 19 September 2005

http://www.businessweek.com/magazine/content/05—38/b3951012.htm]

For New York, read Paris, Tokyo, Moscow, London, Manchester, Glasgow Birmingham or any other major urban centre.

The Business Week "dirty bomb" scenario uses nuclear material stolen from a hospital, but there is real concern that such material could be illicitly obtained from commercial nuclear power installations, as UN Secretary General Kofi Annan highlighted before the Clinton Global Initiative, which ran contemporaneously (14-16 September 2005) with the UN World Summit. He stressed the dangers posed by proliferation, in giving terrorists opportunities to steal nuclear products that they could use to make so-called "dirty" bombs, which would combine radioactive material with conventional explosives in order to make bombs that could spread harmful radioactivity over a wide area.

He reinforced these concerns in his address to open the 60th General Assembly of the United Nations on 17 September 2005, when he insisted: "we face growing risks of proliferation and catastrophic terrorism . . ."

www.un.org/webcast/ga/60/statements/sg050917eng.pdf)

We observe with some consternation that there is an apparent disconnect between the justifiable international concern over security threats posed by the insecurities of commercial nuclear energy sector, and the promotion of an expanded nuclear sector by the very authorities warning of the risk. It is indeed peculiar that just as policy makers were starting to face up to the real insecurities posed by existing nuclear plants and fuel cycle installations—and the transports between them—at the London and Madrid conferences, the IAEA announced at the start of March 2005 that there were: "Rising Expectations for Nuclear Electricity Production". In an official IAEA statement, issued in conjunction with publication of its Nuclear Technology Review—Update 2005, the Agency said:

"The IAEA forecasts stronger growth in countries relying on nuclear power, projecting at least 60 more plants will come online over the next 15 years to help meet global electricity demands."

But the "Faustian bargain" infamously spoken of by former Oak Ridge National Laboratory Director Dr Alvin Weinberg in 1972 still exists. The spread of nuclear energy leads to the greater potential for the spread of nuclear weapons.

The international spread of nuclear power technology, and its concomitant spread of nuclear materials, was no accident: it was heavily promoted under the US export technology transfer initiative for "Atoms for Peace", set out in a path-breaking address to the UN General Assembly by President Dwight D Eisenhower on 8 December 1953.

In his address, in which he presaged the IAEA, Eisenhower commented:

"My recital of atomic danger and power is necessarily stated in United States terms, for these are the only in controvertible facts that I know. I need hardly point out to this Assembly, however, that this subject is global, not merely national in character.

. . . So my country's purpose is to help us move out of the dark chamber of horrors into the light, to find a way by which the minds of men, the hopes of men, the souls of men everywhere, can move forward toward peace and happiness and well being.

Who can doubt, if the entire body of the world's scientists and engineers had adequate amounts of fissionable material with which to test and develop their ideas, that this capability would rapidly be transformed into universal, efficient, and economic usage."

(http://www.eisenhower.utexas.edu/atoms.htm Part of the Milestone Document Series published by the National Archives & Records Administration)

Nearly 50 years later we witnessed the near inevitable outcome of this policy of nuclear promotion: a country whose director of nuclear affairs deliberately and covertly proliferated nuclear technology. This is the notorious story of Abdul Qadeer "AQ" Khan, of Pakistan.

The current US President, George W. Bush, was forced to admit the danger in a chilling speech he made on nuclear proliferation and materials controls at Fort Lesley J McNair—National Defense University, Washington, DC in February 2004:

"In recent years, another path of proliferation has become clear, as well" said the President. "America and other nations are learning more about black-market operatives who deal in equipment and expertise related to weapons of mass destruction. These dealers are motivated by greed, or fanaticism, or both," Mr Bush warned. "They find eager customers in outlaw regimes, which pay millions for the parts and plans they need to speed up their weapons programs. And with deadly technology and expertise going on the market, there's the terrible possibility that terrorists groups could obtain the ultimate weapons they desire most."

After detailing Khan's relations with his business partner in proliferation, B S A Tahir, based in Dubai, Bush explained his new Proliferation Security Initiative (PSI), developed together with Australia, France and Germany, Italy and Japan, the Netherlands, Poland, Portugal, Spain and the UK, designed to intercept and interdict lethal nuclear (and other dangerous) materials in transit.

He then proposed that the work of the PSI be expanded to address more than shipments and transfers: to "take direct action against proliferation networks."

He announced the US would:

". . . help nations end the use of weapons-grade uranium in research reactors," and urged "more nations to contribute to these efforts."

He then pronounced:

"The nations of the world must do all we can to secure and eliminate nuclear and chemical and biological and radiological materials."

Some may regard that as an admirable aspiration; we regard it as both practical and necessary.

The President finished by asserting:

"Enrichment and reprocessing are not necessary for nations seeking to harness nuclear energy for peaceful purposes."

On security grounds alone, many would concur, as we do.

A few months later, (on 21 June 2004) in a Keynote Address, the IAEA Director Dr ElBaradei told a Carnegie Peace Foundation International Non-Proliferation Conference held in Washington DC that:

"Nuclear components designed in one country could be manufactured in another, shipped through a third (which may have appeared to be a legitimate user), assembled in a fourth, and designated for eventual turnkey use in a fifth. The fact that so many companies and individuals could be involved is extremely worrying. And the fact that, in most cases, this could occur apparently without the knowledge of their own governments, clearly points to the inadequacy of national systems of oversight for sensitive equipment and technology."

He concluded: "The present system of nuclear export controls is clearly deficient."

He then argued: "First, we must tighten controls over the export of sensitive nuclear material and technology. . . Second, it is time that we revisit the availability and adequacy of controls provided over sensitive portions of the nuclear fuel cycle under the current non-proliferation regime . . . We should consider limitations on the production of new nuclear material through reprocessing and enrichment . . . considerable advantages—in safety, security and non-proliferation—would be gained from international cooperation in the front and the back end of the nuclear fuel cycle. Third, we should work to help countries stop using weapon-usable material (separated plutonium and high-enriched uranium (HEU)) in their civilian nuclear programmes . . ."

And he ended:

"Fourth, we should eliminate the weapon-usable nuclear material now in existence."

Within a week (on 30 June 2004) Dr Hans Blix, Dr ElBaredei's predecessor as IAEA director-General, called for agreement on an international treaty to ban the production of weapons-grade nuclear material and prevent the spread of weapons of mass destruction (WMD). Commenting on the 15-nation WMD Commission in Vienna, which he chairs, Dr Blix said:

"But there's also a very widespread and strong feeling on my commission that one must move on with a treaty that will prohibit all states involved from producing highly enriched uranium or plutonium, both substances that can be used in nuclear weapons."

In a Financial Times Op-Ed article on 2 February this year—titled "Curbing the Nuclear Threat"—Dr ElBaredei said that nations should now seriously consider a five-year moratorium on building new facilities for uranium enrichment and plutonium separation.

"There is no compelling reason for building more of these proliferation-sensitive facilities, the nuclear industry already has more than enough capacity to fuel its power plants and research facilities," he said.

[http://www.iaea.org/NewsCenter/News/2005/npt_2005.html]

One of the key events at the United nations Global summit, on 14-16 September this year, was to open for signature the Convention for the Suppression of Acts of Nuclear Terrorism, which emerged form the first Millennium Summit in 2000, and was adopted by the UN General Assembly on 13 April 2005. The nuclear terrorism treaty, which strengthens the global legal framework to combat the scourge, requires the extradition or prosecution of those implicated and encourages the exchange of information and inter-state cooperation. It gained its first signatories in Russian President Vladimir Putin, US President George W Bush, and French Prime Minister Dominique de Villepin. It enters into force 30 days after it is signed and ratified by at least 22 states.

In a related development at the United Nations, the UK submitted a resolution, Number 1624, to the Security Council on 14 September this year, calling for tougher controls on terrorism, including nuclear threats. It stressed that the Security Council should "call upon all States to become party, as a matter of urgency, to the international counter-terrorism Conventions and Protocols whether or not they are party to regional Conventions on the matter, and (to) give priority consideration to signing the International Convention for the Suppression of Nuclear Terrorism."

US President Bush pressed for the Security Council to approve the resolution, which called upon all nations to take steps to end the incitement of terrorist acts, and to commit countries to prosecute, and extradite, anyone seeking fissile materials or the technology for nuclear devices.

In February 2005, the UK Prime Minister's Strategy Unit advised him, in a report Investing in Prevention—An International Strategy to Manage Risks of Instability and Improve Crisis Response, in a section on the threats from WMDs, that:

(www.strategy.gov.uk/downloads/work_areas/countries_at_risk/report/index.htm)

In a later section (6.8.3) on the "Proliferation of Nuclear Technology", the Strategy Unit authors point out:

"On the one hand, developing or expanding civil nuclear energy programmes is one option to meet increasing demands for energy, diversify national energy portfolios, increase energy security and reduce greenhouse gas emissions. On the other hand, such technology can be used for weapons creation . . ."

And they add:

"The tension embodied in the verification and peaceful use provisions of the Nuclear Non- Proliferation Treaty (NPT) does not make for easy enforcement of its aims."

This problem was highlighted at the United Nations Global Summit in September 2005 by Mr Blair, when he bluntly stated, in presenting the UK counter-terrorism resolution, that:

"The United Nations must strengthen its policy against non-proliferation; in particular, how to allow nations to develop civil nuclear power but not nuclear weapons."

Aside from the grammatical infelicity, by which the Prime Minister inadvertently appears to oppose non-proliferation, in advocating a strengthened policy "against" it , his support for the development of civil nuclear technology again demonstrates a long standing disconnect, which at once backs commercial exploitation of nuclear energy while seeking to control or indeed halt nuclear weapons proliferation.

These then are the current concerns in the international community over nuclear terrorism and security threats. This memorandum now turns to how these specifically apply to the UK.

3. NUCLEAR SECURITY IN THE UNITED KINGDOM

For a very helpful recent analysis of the nuclear security situation in the UK, we would direct the EAC to two reports of the BNFL Stakeholder Dialogue (SHD), of which one of this memorandum's authors was a participating member, firstly on the Plutonium Working Group (PWG) and thereafter the Security Working Group (SWG), over the past five years. The final reports of both Working Groups may be accessed via the web site of the SHD coordinators, The Environment Council, at:

PWG: www.envcouncil.org.uk/docs/SWG%20Final%20Report.pdf (196 pages, published 31 March 2003)

SWG: www.envcouncil.org.uk/docs/SWG%20Final%20Report.pdf (145 pages, Published 10 December 2004)

The report of the Security Working Group summarised its

". . . purpose and hope [as] to contribute to the improvement of the security of BNFL's plant and activities, including in particular the transport of nuclear material, by the production of a quality review, using stakeholder dialogue, unique in this security context. The report is the fruit of rare collaborative effort on the part of a number of individuals from a variety of backgrounds with many differences in outlook. Notwithstanding that such differences in view were so divergent that in some instances they appeared to fully contradict each other, the group has produced what it considers to be a constructive and forward looking contribution to the manner in which security is provided for BNFL's activities."

The 60 recommendations generated by the group were finally grouped in seven main categories as follows:

(1) Funding and resourcing security activities.

(2) Accountability, openness and transparency of information.

(3) Establishing a mechanism for stakeholder dialogue with regard to security issues.

(4) Governance and organisational arrangements with respect to OCNS.

(5) Mechanisms for assessing threats (Design Basis Threat), the testing of security measures prescribed by an assessment, and forecasting the consequences of such threats if realised.

(6) Development and application of Security Hazard Indicator for assessment of security impact of an activity or evaluating the cost-benefit of a proposed security measure.

(7) National arrangements which fall into the remit of government.

The Security Working Group collectively agreed that "The attitude of BNFL in undertaking to implement, or to lobby for implementation of the recommendations where they lay outside their power (except where it disagrees significantly with the measure and in any such event to give reasons for such disagreement), was helpful in creating trust and enabling the process to move forward."

A number of differences on some security issues which were addressed in the course of the study remain unresolved, such as the manner of transportation of nuclear material, the risks arising from the conduct of plutonium swaps and the degree which sensitive information on nuclear materials should be made available to the public.

The SWG report in particular canvassed the difficulty of ensuring that existing licensed nuclear sites and installations—and nuclear materials in-situ and in transit—can be properly secured. This present submission examines further some of the issues canvassed in the SHD Security Working Group report.

3.1 Contractorisation and Security Controls

One issue looked at by the SHD SWG members was that of the vetting of site operating personnel and drivers of vehicles transporting nuclear materials between licensed nuclear sites. It was argued by some participants that the competitive contractorisation of the operational work of the Nuclear Decommissioning Authority (NDA) will undermine the ability of the UK Government's specialist nuclear security controls quango, the Office of Civil Nuclear Security (OCNS), to conduct proper vetting, as it will increase the number and dispersal of those contractors needing to be vetted.

Here are some observations in respect of security vetting from the director of the OCNS in his 2004 Annual Report:

"Para 37. The vetting system works reasonably effectively, although it is unavoidably intrusive, time-consuming and labour-intensive. We advise foreign agencies that vetting is an essential component in nuclear security arrangements, in line with IAEA guidelines. There has been pressure in recent years to cut back numbers being vetted, but the current terrorist threat has brought about a prudent change of view.

Para 38. It is sometimes claimed that a single government vetting agency could achieve greater efficiency. I doubt this. Our IOs are based close to nuclear sites. OCNS vetting staff are familiar with conditions within the industry, the hazardous nature of nuclear and radioactive material, and the work undertaken. If these close links were ever broken, the discernment of those undertaking interviews and record checks, and the understanding informing the decision-making process, would be lost.

Para 39. The policy and practice of national security vetting gives full regard to the requirements of the Data Protection Act, the Freedom of Information Act, the Human Rights Act, race relations and other relevant legislation. Where appropriate, vetting information is exempt from disclosure. However, we are encountering some reluctance by employers and others interviewed to provide candid references. Despite assurances to the contrary, some worry that their identities might be disclosed on appeal and their organisations sued for defamation. I have drawn the issue to the attention of Cabinet Office officials. I have also suggested that an interdepartmental committee of vetting authorities should be re-established, to provide a forum for a regular exchange of views and the formulation of advice for central government.

Companies with sensitive government contracts (List X firms) already have such a body in the Defence Industries Security Association (DISA)."

(The full OCNS third annual report is available at:

www.dti.gov.uk/energy/nuclear/safety/dcns_report3.pdf)

The Fourth Annual Report to the Energy Minister from the Director of Civil Nuclear Security on The State of Security in the Civil Nuclear Industry, covering the year to March 2005, was released in July 2005, and may be examined on:

www.dti.gov.uk/energy/nuclear/safety/dcns_report4.pdf.

The 2005 report informs the minister (para 14):

"As part of a continuing programme of work since the terrorist attacks in the USA in September 2001, OCNS is reviewing, with the Nuclear Installations Inspectorate (NII) and the operators' own specialists, the security and safety measures in place to protect Vital Areas at nuclear sites, including generating stations. Vital Areas contain equipment, systems or devices, the failure of which could have serious consequences for the secure and safe operation of a nuclear site."

It concludes:

"The programme of work is making good progress and has so far confirmed significant redundancy in all assessed systems."

But on security vetting it states (para 16d):

"I require all individuals, both police and industry employees, who have access to facilities holding Category I nuclear material to be subject to Developed Vetting (DV) security clearance. In order to maintain his operational flexibility, the Chief Constable's Vetting Policy for the UKAEAC demanded that all UKAEAC Officers should be DV, even though a proportion did not come within my definition of requirement.

With the expansion of the UKAEAC/CNC through Extended Deployment and in recognition both of the significant costs of the DV process and of OCNS' finite resources available for vetting, I welcome the Chief Constable's decision to modify his policy to allow Officers not employed on Category I nuclear sites or escort duties to be Security Cleared (SC), the level below DV. This variation will achieve significant cost savings for CNPA, ease the administrative burden for OCNS and make Officers available for front line duty faster. I have matched the Chief Constable's initiative with some well-defined guidance, giving him a commitment to `fast-track' clearances to DV from SC should operational circumstances dictate the need."

And it adds at paragraphs 34-39:

"OCNS provides a personnel vetting service which conforms to the requirements of Regulations 9, 17(3) and 22(3) of NISR (Nuclear Installations Security Regulations) 03, and which is applied to all permanent employees and contractors working in the civil nuclear industry. Clearances commensurate with the level of access to nuclear material and sensitive nuclear information are granted to individuals and such clearances conform to national definitions, requirements and procedures. OCNS revalidate clearances at regular intervals according to the level granted and consider Appeals against decisions."

"35. In the year 1 April 2004 to 31 March 2005, OCNS issued a total of 12,587 clearances, of which 11,447 were for individuals who had not been vetted previously and the remaining 1,140 were revalidations. The vast majority of the new cases, 10,112, were for the lowest level of clearance, the Enhanced Basic Check (BC+), which allows unescorted access to a site. The balance of 1,335 cases represents the higher levels of clearance (Developed Vetting (DV), Security Check (SC) and the Counter Terrorist Check (CTC)) which permit access to sensitive areas of a site or access to more sensitive nuclear information. The detail is shown at Table 1 below, which includes totals recorded for 2002-03 and 2003-04 for comparison."

Table 1

SECURITY VETTING CLEARANCES GRANTED BY OCNS

Clearance Levels		New Cases
	Revalidations
	2002-03	2003-04	2004-05	2004-05
Developed Vetting	312	435	471	279
Security Checks	753	921	863	47
Counter Terrorist Check	22	23	1	0
Enhanced Basic Check	8,381	7,742	10,112	814
TOTALS	9,468	9,121	11,447	1,140

"36. The figures confirm the trends identified in previous years which show a steady annual increase in the numbers of individuals requesting clearance. Although no one has been permitted to work on a nuclear site without the appropriate clearance or escort, absorbing the increase in tasking has been a significant challenge; OCNS has had mixed success in meeting it. Against a background of staff shortages created by retirements on the one hand and a recruitment moratorium during a major DTI downsizing exercise on the other, OCNS productivity has continued to improve from an already high base as a result of better working practices and a focused commitment by staff on the task. In spite of this, a backlog of cases built up in the last two quarters of 2004 which has yet to be addressed. At the end of the reporting period, the backlog (including arrears in revalidation cases) stood at 666 DV, 687 SC and 1600 BC+."

"37. Details of the numbers of revalidation cases processed in 2004-05 are shown in Table 2 with totals for 2002-03 and 2003-04 included for comparison."

Table 2

REVALIDATION OF SECURITY VETTING CLEARANCES

Revalidations
Clearance Levels	2002-03	2003-04	2004-05
Developed Vetting (DV)	163	186	279
Security Checks (SC	51	101	47
Counter Terrorist Checks (CTC)	0	0	0
Enhanced Basic Checks (BC+)	2,552	3,059	814*
TOTALS	2,766	3,346	1,140

*Figure reflects the policy change to treat BC+ revalidations as new cases.

"38. Although the figures in Tables 1 and 2 demonstrate the achievements of the OCNS Vetting Branch, one of my highest priorities now is to clear the backlog of vetting cases. The practical effect of the backlog on the industry amounts to delays in confirming recruitment of prospective employees or engagement of contractors, with the concomitant risk of losing them to other employment, and additional costs accruing from the need to escort individuals who do not hold the necessary clearance. In an industry where margins are so tight, this is a burden which must be reduced."

"39. I have recruited new staff to replace those who have retired and they are now coming on line. We continue to question how we manage the vetting process to identify further productivity increases and indeed, during the first quarter of 2005, significant efficiencies were achieved by treating BC+ revalidations as new cases. I have also asked all those involved in the industry to scrutinise carefully all vetting applications to ensure that clearances appropriate to individual appointments are applied for. The Chief Constable, UKAEAC's revision of his vetting policy (Subparagraph 16d above) is an example of best practice and I want to extend such initiatives. However, anecdotal evidence suggests that operators are requesting higher clearances than are strictly necessary, and that contractors create headroom for themselves by asking for more clearances than a project needs, and then employing individuals whose clearances arrive first. The balance of what have become unnecessary applications remain in the system, clogging it up and compounding delays."

So, although overall the DG OCNS says he is satisfied, we highlight his comment below on the implications of backlogs in vetting:

"The practical effect of the backlog on the industry amounts to delays in confirming recruitment of prospective employees or engagement of contractors, with the concomitant risk of losing them to other employment, and additional costs accruing from the need to escort individuals who do not hold the necessary clearance. In an industry where margins are so tight, this is a burden which must be reduced."

We suggest that this issue should be explored with him, particularly in the context of both any new build programme, and the expansion of between nuclear installations transports that will be inevitable as the NDA begins to deliver its mission.

Security vetting concerns were confirmed when the then Cabinet office minister Douglas Alexander told the then Labour MP Llew Smith in July 2004 in a written answer that:

Hansard,

It is now known from papers released in February 2005 under the Freedom of Information Act that in the last year (2004-05) the OCNS had over 40 cases of potential security breaches under the current nuclear site management arrangements (see: www.dti.gov.uk/about/foi/documents/ocns.pdf).

The papers released under a FOIA request included the following information:

— OCNS carried out 129 pre-notified inspections in 2004. (These include the pre-notified inspections covering the last quarter of the FY 2003/4 cited in the last Annual Report);

— OCNS has carried out 15 no-notice inspections since September 2003.

The OCNS does not know how many security passes were lost/stolen within the nuclear industry in the past year.

— OCNS does not expect to receive reports of individual alarms etc. where the cause has been investigated and assessed as benign. Nor are companies required to report what are essentially maintenance matters provided these have been dealt with promptly and have not significantly downgraded overall security effectiveness. We have interpreted your question broadly to mean anything out of the ordinary that the Operators drew to our attention. Therefore, not all of the incidents reported to us and noted here are of equal seriousness. None of the incidents involved theft of nuclear material or sabotage.

To address the question of what these involved, OCNS put security incidents into three broad categories:

1. Incidents that were responded to because they could indicate deliberate activity intended, for example, to steal property (including nuclear material) or information, or commit sabotage. The figures below subdivide this category into:

(a) incidents responded to immediately and resolved immediately;

(b) incidents responded to immediately and later resolved; and

2. Security equipment or procedural failures identified by normal management arrangements or by inspection/audit. Compensatory/corrective measures were taken to ensure maintenance of overall security standards.

3. Failure of security leading to unacceptable or undesirable consequences.

[The numbers and description are gathered together in Annex 1 to the FOIA release]

A key part of the OCNS mission is to identify and characterize threats. This is how OCNS director highlights "Threat Assessments" in the latest OCNS annual report:

"11. It is vital, given the potentially serious consequences of any criminal or malevolent activity directed against civil nuclear sites or material, or proliferation sensitive technology, that security measures are designed to counter realistic threats. Effort must not be wasted on ineffective security precautions. Accurate, timely intelligence is essential. Information on the methods, capabilities and intentions of terrorist groups and other potential adversaries enables security measures to be put in place. Though rarely specific enough to identify in advance when and where attacks might take place, intelligence reporting often does indicate when the threat has increased, to enable contingency measures to be activated in response, such as extra patrols or searching. Intelligence may also indicate when more labour-intensive security measures can be scaled back, to avoid over-extending staff and undermining morale."

"12. I am pleased to record that the provision of intelligence has improved markedly over the past six years. When I took over as Director, little intelligence was received, due to DCNSy's anomalous position within the UKAEA, as well as resource problems inhibiting liaison. To begin with, I had to rely on personal contacts to overcome these difficulties. The transfer to the Department and the provision of additional staff has remedied these deficiencies. We now receive all relevant intelligence, not just about nuclear, radiological and related threats (CBRN), but also providing a broader context. Most reports are sent to OCNS electronically via an encrypted data link. We are consulted by the intelligence agencies about our particular intelligence requirements and our advice is sought about the interpretation to be drawn from raw material. We are also able to provide digests and threat assessments to the operating companies, based on this material, for circulation to Board members, security managers, contractors and members of staff."

"13. The decision by the Government, which I mentioned in last year's report, to establish the Joint Terrorism Analysis Centre (JTAC) has, as expected, substantially enhanced the quality, scope and focus of intelligence reporting on the terrorist threat. JTAC has developed remarkably quickly into a most effective organisation. I am a member of the JTAC Oversight Board and OCNS functions as a participating organisation. As well as receiving intelligence, we provide JTAC with insights into nuclear security issues to aid reporting on these topics. This year, JTAC staff have received briefings from OCNS and attended training courses with managers from the operating companies. Visits to nuclear sites are being arranged. However, to derive full advantage from this link with JTAC, one of our two INFOSEC Inspectors is having to devote much of his time to the work, reading and disseminating material received and liaising with JTAC analysts based in London. For this reason, we aim to recruit a third INFOSEC Inspector to support both functions. Other, larger participating agencies provide teams of analysts to JTAC on secondment."

"14. I mentioned in my previous reports the procedures we use to assess medium term security threats, incorporated in a key planning document known as the Design Basis Threat (DBT). The document is based on the intelligence we receive about the motives, intentions and capabilities of terrorist groups and other potential adversaries. It is designed to provide a definitive statement of the possible scale and methods of attack that could be faced at civil nuclear sites, or when nuclear material is being transported. The DBT also takes account of the availability of countermeasures and contingency arrangements provided by the police, the MOD and other agencies. It makes clear which forms of possible attack the nuclear operating companies are expected to guard against, which types of attack remain the responsibility of the Government and whether, in the latter case, the companies are required to take mitigating or preventative measures."

"15. The DBT provides the basis for the design, implementation and management of security measures by the civil nuclear companies. It is also used by OCNS to develop or revise model security standards and guidance, evaluate site, transport and computer security plans prepared by the operators, and to monitor compliance. The companies subject to regulation have supported this approach because it provides a clear, rational basis for security planning, resource management and quality control. Furthermore, the approach is regarded by the IAEA as best practice and has been adopted by other foreign regulatory authorities."

He ends by stating: "For security reasons, the DBT is classified SECRET and no further details can be published."

A 140-page study prepared for MPs and Peers by the Parliamentary Office of Science and Technology (POST), published in July 2004, on Assessing the Risk of Terrorist Attacks on Nuclear Facilities, carries a short section (4.5) on the UK DBT. It states:

The Design Basis Threat

use vehicles loaded with explosives to crash through perimeter defences,

the threat that terrorists who were prepared to kill themselves or risk discovery might attempt to penetrate into

to detonate explosives.

"Different countries publish varying amounts of detail about the Design Basis Threat. There is more publicly available information on the US DBT than most other countries. Some of these are listed in Box 4-1, to illustrate the kinds of attack contemplated by authorities, although this provides no indication of the contents of the UK DBT."

The POST report is an excellent overview, which may be insufficiently known to Parliamentarians. We recommend the EAC invite its primary author, Dr Chandrika Nath, to provide oral evidence to explain, and perhaps update, her findings.

It may also be instructive for the EAC to look at how details of the DBT is classified, or otherwise, elsewhere.

3.2 The United States Case

In the United States, following the terrorist events of September 11, 2001, a review of nuclear security was conducted by the regulatory authorities. The following is part of the text of the Nuclear Regulatory Commission (NRC) press release issued on 21 September 2001 under the headline:

"NRC REACTS TO TERRORIST ATTACKS"

The press release said:

"In light of the recent terrorist attacks, US Nuclear Regulatory Commission officials and staff have been working around the clock to ensure adequate protection of nuclear power plants and nuclear fuel facilities. This has involved close coordination with the Federal Bureau of Investigation, other intelligence and law enforcement agencies, NRC licensees, and military, state and local authorities."

"Immediately after the attacks, the NRC advised nuclear power plants to go to the highest level of security, which they promptly did. The NRC has advised its licensees to maintain heightened security. The agency continues to monitor the situation, and is prepared to make any adjustments to security measures as may be deemed appropriate."

"In view of the recent unprecedented events, Chairman Richard A Meserve, with the full support of the Commission, has directed the staff to review the NRC's security regulations and procedures."

On 29 April 2003 the NRC announced changes being made in the DBT. The text read in part:

"The NRC, after extensive deliberation and interaction with stakeholders, has approved changes to the design basis threat (DBT). The Commission believes that the DBT represents the largest reasonable threat against which a regulated private guard force should be expected to defend under existing law . . . In addition, the Commission has approved the issuance of two other Orders to nuclear plants . . . to further enhance protection of public health and safety, as well as the common defense and security."

"These Orders, in combination with the recently-issued Order in the area of access authorization, enhance the already strong defense capability at these sites using three interdependent elements directed to best protect the public, with the appropriate resources placed at the right places. These elements are:

— the revised Design Basis Threat and associated defensive capabilities derived from previous measures that the Commission directed;

— tighter work hour control and more robust training requirements for security personnel, to increase their capability to respond to threats; and

— enhanced access authorization controls to ensure all plant personnel with access to critical areas have had the most rigorous background checks permitted by law.

"The Order that imposes revisions to the Design Basis Threat requires power plants to implement additional protective actions to protect against sabotage by terrorists and other adversaries. The details of the design basis threat are safeguards information pursuant to Section 147 of the Atomic Energy Act and will not be released to the public. This Order builds on the changes made by the Commission's 25 February 2002 Order. The Commission believes that this DBT represents the largest reasonable threat against which a regulated private security force should be expected to defend under existing law. (emphasis added) It was arrived at after extensive deliberation and interaction with cleared stakeholders from other Federal agencies, State governments and industry."

"Under NRC regulations, power reactor licensees must ensure that the physical protection plan for each site is designed and implemented to provide high assurance in defending against the DBT to ensure adequate protection of public health and safety and common defense and security. Extensive changes in those physical protection plans will now be made and submitted to NRC for approval."

"The second Order describes additional measures related to security force personnel fitness for duty and security force work hours. It is to ensure that excessive work hours do not challenge the ability of nuclear power plant security forces to remain vigilant and effectively perform their duties in protecting the plants . . . The NRC developed this unclassified Order through a public process . . ."

"The third Order describes additional requirements related to the development and application of an enhanced training and qualification program for armed security personnel at power reactor facilities. These additional measures include security drills and exercises appropriate for the protective strategies and capabilities required to protect the nuclear power plants against sabotage by an assaulting force. This Order requires more frequent firearms training and qualification under a broader range of conditions consistent with site-specific protective strategies. The details of the enhanced training requirements are safeguards information, and will not be released to the public. As with the DBT Order, the Commission solicited comments on a draft training Order from cleared stakeholders, including security personnel and took those comments under consideration in reaching its final decision."

[As a matter of public fact, the Orders were challenged in the United States Court of Appeals for the District of Columbia Circuit by the NGOs Public Citizen, Inc and San Luis Obispo Mothers for Peace, in a suit brought on 30 June 2003. The full text is on the NRC website at:

http://www.nrc.gov/reading-rm/doc-collections/news/2003/03-053.html]

The disclosures over the sensitivities and changes in the US—following its post "9/11" review— are the subject of a special analysis by one of our authors, and are appended as Annex 1 to this memorandum. This analysis clearly demonstrates that a sensible, detailed discussion on the DBT can be held in open session.

We would recommend the EAC invite before them both the director and deputy director of the OCNS to examine how they advise decision makers and ministers on the comparative risk from the hazards posed by breaches of security at nuclear installations.

We find it hard to understand why, despite the fact that the US Nuclear Regulatory Commission has found it possible—post 9/11, in a country, the United States, deeply wounded by the terrorist actions on its own soil—to put many details into the public domain on changes in the US DBT, such details still remain classified, and hence beyond independent critical appraisal, in the UK.

Some MPs have made efforts to discover the background to the UK DBT. The then Energy minister Brian Wilson told MPs in a written reply three years ago:

"I cannot add to the information about the key planning document known as the design basis threat (DBT) which the Director of the Civil Nuclear Security referred to in his recent annual report on the `State of Security in the Civil Nuclear Industry and the Effectiveness of Security Regulation', placed in the Libraries of the House on 11 June 2002. The assessment is classified and no further details can be published. The Director of Civil Nuclear Security assures himself that a site operator's ability to protect against the DBT is adequate and is tested. (Official Report, 26 June 2002: Column 892W)."

In July 2004, a question was put to the DTI energy minister on the DBT, asking which organisations provided information used by the Office for Civil Nuclear Security (OCNS) to construct its design basis threat (DBT) for plants and operations of civil nuclear companies; and whether the OCNS shares information on the United Kingdom DBT with its United States counterpart.

The then Energy minister Stephen Timms replied:

"The Design Basis Threat is a planning tool that draws principally on assessments produced by the Security Service and the Joint Terrorism Analysis Centre (JTAC), of which OCNS is a member. OCNS discusses the processes involved in the production and use of a Design Basis Threat with many member states of the International Atomic Energy Agency, including the United States, but does not exchange analyses or conclusions that are protectively marked." (Official Report, 16 July 2004: Column 1383W).

This is a matter we would recommend is explored further by the EAC.

3.3 BNFL Material Unaccounted For (MUF) Problem Highlights Nuclear Materials Accountancy Difficulties

Another issue that is central to nuclear materials security is: how reliable is the accountancy procedure?

In February 2005 BNFL admitted that nearly 30 kilogrammes of plutonium remained "unaccounted for" in its annual nuclear materials stocktake. The Times newspaper reported it as its front page lead story.

The Whitehaven News, Sellafield's local newspaper, in its 24 February 2005 edition reported a BNFL spokesperson as saying that, in fact, the IAEA sets standards on these uncertainties "at 1% of the total Sellafield throughput but the latest figures represent only around 0.5% of this."

BNFL had issued a statement on 17 February which boldly stated in part that:

"Euratom, the European regulator with responsibility for this issue, has accepted all inventories as satisfactory".

Further investigation demonstrated that this brief comment was not comprehensive, and hid an unresolved problem, viz that Euratom, the European Unions' nuclear watchdog regulator, remained in dispute with BNFL over the application of safeguards at Sellafield. Indeed, DTI energy minister Mike O'Brien stated in a written parliamentary answer to MPs:

"BNFL and the [DTI] Safeguards Office are currently in discussion with the European Commission to resolve measurement issues that have been identified in certain aspects of nuclear material accountancy at Sellafield." (Official Report, 25 February 2005: Column 888W).

The important fact to recognise is not that the percentage uncertainty is less than 0.5%, but the actual quantity of the plutonium—a potent nuclear explosive material—is around 30 kilogrammes. With the IAEA's "significant quantity" to trigger security concerns of this nuclear material being 8 kilogrammes, this means that more than three times that amount (around 10 nuclear bombs' worth) was not accounted for.

This problem is not one of safety, but security, safeguards and materials accountancy. 100,000 kilogrammes of reprocessed plutonium is currently stockpiled at Sellafield. The fact that such a large surplus of this potent nuclear explosive remains without a long-term management solution remains an awkward political problem for ministers. And it also puts the inability of BNFL, Sellafield's operators, to account for 30 kilogrammes into context.

This incident was given a context in May 2005, when the Guardian newspaper (9 May) revealed that some 83 m3 of radioactive liquors, containing up to 200 kilogrammes of plutonium, had been leaking from a section called the "feed clarification cell" inside Thorp, Sellafield's most modern reprocessing plant, operated by the British Nuclear Group (BNG), part of BNFL. The Nuclear Decommissioning Authority, owners of Thorp, subsequently issued a Media Statement on 27 May, recording it had taken receipt of an internal report of the incident from the British Nuclear Group board of inquiry.

The Energy Minister informed Parliament in written answer, issued in September 2005, that his predecessor, as the minister responsible, had first been informed of the leak on 21 April. (Official Report, 12 September 2005: Columns 2269-70W).

The Energy Minister had earlier informed Parliament in a written answer on 15 June what was known about the accident, in that:

"the results of BNGSL's investigation suggests that the pipe may have started to fail in August 2004 and that complete failure of the pipe may have occurred in mid-January 2005. Opportunities such as cell sampling and level measurements were missed which would have shown that material was escaping to secondary containment." (Official Report,15 June 2005: Column 413W).

The Energy Minister revealed in his answer this September that:

"The special report (dated 10 May 2005) on this incident, as required under Article 14 of Commission Regulation 302/2005, was forwarded to the Commission's DG Transport and Energy Directorate H by the UK Safeguards Office on 13 May 2005. However, this official notification had been preceded by verbal notification to the Commission of accounting discrepancies in THORP during a routine inspection on 29 March 2005. When it became clear that the discrepancies were due to a leak, the Commission were informed on 21 April 2005. Further details were provided to Commission inspectors on the Sellafield site during the week beginning 25 April 2005."

He added that while there is no formal requirement to notify the International Atomic Energy Agency: "the UK made a statement at the Board of Governors in Vienna during the week of 13 June 2005. The UK Safeguards Office has been kept informed of all related discussions between the British Nuclear Group Sellafield Limited, including participating in a meeting held at the DG TREN offices in Luxembourg on 16 June 2005." (Official Report, 12 September 2005: Columns 2269-70W)

For a hair-raising account of how major problems can occur in even relatively new nuclear plants handling nuclear materials, the final report of the Board of Enquiry makes for chilling reading, (http://www.britishnucleargroup.com/pdf/2765_1.pdf) which we would recommend to the EAC, not least because the BNG's parent, BNFL, is often touted as a possible future builder/operator of new nuclear power plants.

This was an accident that created environmental safety and potentially nuclear security problems. But there assuredly are bigger nuclear terrorist threats. At the 7th Irish and UK Local Authorities Standing Conference on Nuclear Hazards, held in Drogheda, County Louth, Ireland, on 10-11 March 2005, specialist consultant Dr Gordon Thompson, of the Institute for Resource and Security Studies, Cambridge, Massachusetts, presented a chilling paper on the theme: "Are Nuclear Installations Terrorist Targets?"

He pointed out that in the US the Government has published a design of a cruise-missile warhead intended to penetrate rock or concrete. He reported that the warhead has a diameter of 71 cm, a length of 72 cm, and a total mass of 410 kg; when tested in 2002, it created a hole of 25 cm diameter in tough rock to a depth of 5.9 m; that one means of carrying such a device would be a general-aviation aircraft; and that a Beechcraft King Air 90 will carry a payload of up to 990 kg at a speed of up to 460 km/hr; a used King Air 90 can be purchased for US$0.4-1.0 million.

In other words, a viable platform of attack is well within the budgets of international terrorists. The vulnerabilities are manifold: spent fuel stores, high activity radioactive waste liquor storage tanks; long-term immobilised radioactive waste stores; and nuclear reactor containment at Magnox reactors.

Dr Thompson provided the following typologies of vulnerability:

We record that it was Dr Thompson's memorandum to the Defence Select Committee, in January 2002, that led to the Defence Committee making a recommendation that the terrorist threat to nuclear installations be conducted by POST, resulting in the POST report to which reference was made above. The EAC may find it useful to invite Dr Thompson, who has since been used as a security consultant by the Committee on Radioactive Waste Management (CoRWM), to give further oral details on his concerns over insecurities at UK nuclear installations.

3.4 Cyber insecurity

Another vulnerabity of nuclear plants is cyber insecurity. An article by Kevin Poulsen of Security Focus (8 March 2005) reported that two companies that make digital systems for nuclear power plants have come out against a US Government proposal that would attach cyber security standards to plant safety systems.

The 15-page proposal, introduced in December 2004 by the US Nuclear Regulatory Commission, would rewrite the NRC's "Criteria for Use of Computers in Safety Systems of Nuclear Power Plants." The current version, written in 1996, is three pages long and makes no mention of security.

The NRC plan expands existing reliability requirements for digital safety systems and, as the article states:

"infuses security standards into every stage of a system's lifecycle, from drawing board to retirement."

So far, industry reaction has been less than glowing. Capri Technology, a small California firm that builds specialised systems and software for nuclear plants, calls the regulations "premature", and says the proposal could deter plant operators from installing new digital safety systems entirely.

"The NRC tries to promote the use of digital technology in the nuclear power industry on the one hand, but then over-prescribes what is needed when a digital safety system is proposed," wrote company president William Petrick, in comments filed with the commission. An industry veteran, Petrick advocates withdrawing the proposal until the NRC and industry experts can agree on a more effective cyber security strategy.

Framatome, a French company that develops and builds nuclear plants from the ground up, had a similar response. The company argued in its comments that the NRC is painting with too broad a brush—for example, by applying the same security standards to software running on a general purpose computer, and to firmware embedded in a chip.

Cyber security "is sufficiently important and complex to merit a more considered set of guidance," Framatone has argued. "A significant joint effort should be undertaken to publish comprehensive cyber security guidance that covers present and planned uses of software in nuclear plants", the company asserts.

In 2004 the IAEA itself warned of growing international concern about the potential for cyber attacks against nuclear facilities, and said it was finalizing new security guidelines of its own. No successful targeted attacks against plants have been publicly reported, but in 2003 the "Slammer" worm penetrated a private computer network at Ohio's idle Davis-Besse nuclear plant and disabled a safety monitoring system for nearly five hours. The worm entered the plant network through an interconnected contractor's network, bypassing Davis-Besse's firewall.

(http://www.theregister.co.uk/2005/03/08/nuclear_cyber_security/)

We recommend that the EAC invite before it suitable witnesses to explain the vulnerabilities posed by cyber-threats to nuclear plants.

3.5 Parliamentary scrutiny of nuclear security issues

Several pointed questions have been raised in Parliament in the past year over nuclear security, including concerns over potential threats to nuclear installations from aircraft.

Defence minister Adam Ingram said in response to a question in April 2004 asking the Secretary of State for Defence if he would list each near-miss incident involving RAF aircraft and United Kingdom nuclear installations reported to his Department in each year since 2000 that:

"Restricted areas for aircraft have existed around nuclear facilities for many years. In the aftermath of 9/11 the Civil Aviation Authority (CAA) revisited this policy, issuing an amendment to Article 85 of the Air Navigation Order, and now major nuclear installations have a restricted area of two nautical mile radius."

"The number of alleged breaches of restricted areas involving RAF aircraft and United Kingdom nuclear installations reported to the Ministry of Defence in each year since 2000 is detailed in the following table. The Ministry of Defence, Defence Flying Complaints Investigation Team carried out investigations on each occasion and concluded that five of these were found to have infringed restricted areas. I will shortly place copies of all reports of the investigations in the Library, with all personal data redacted in accordance with the Data Protection Act 1998."

Mr Ingram later told MPs that:

"Both Royal Air Force and United States Air Force aircraft operate with the same restrictions in respect of overflights of nuclear installations and residential areas. Nuclear installations are to be avoided by a radius of two nautical miles from a fixed centre-point or a height of 2,000 ft, by all types of aircraft. In respect of `residential areas' we grant avoidances in the United Kingdom military low-flying system to towns with a population of 10,000 or more, as well as everything within certain major avoidance areas. Towns granted avoidances are to be overflown at not less than 1,000 ft by helicopters, and not less than 2,000 ft by fixed wing aircraft." (Official Report, 25 May 2004 : Column 1617W)

We know from an earlier parliamentary answer to the now retired Labour MP Llew Smith that a "near-hit" incident reported on 4 April 2002 involved a helicopter landing in the grounds of the BNFL nuclear installation at Berkeley, Gloucestershire. It turned out to be a Canadian military helicopter on a joint military exercise. But what if it had been a group of international terrorists? The plant management did not know.

It was reported in several newspapers (The Observer, Sunday Express) on 11 September 2005 that armed police would henceforth be routinely deployed to guard nuclear plants: "Armed police drafted in to protect nuclear plants from terror attack", was one headline.

"Armed police have been introduced at two nuclear power stations in Suffolk, it was confirmed yesterday. Civil Nuclear Constabulary officers have been drafted in to patrol. Security at the sites of BNG's Sizewell A and British Energy's Sizewell B plants near Leiston has been reviewed, along with other plants throughout the country, following both the 9/11 attacks and the London bombings in July. Sizewell B director Mark Gorry revealed to a Sizewell stakeholders group meeting that the move was intended to boost confidence and act as a deterrent. In January 2003, 30 Greenpeace campaigners scaled the dome containing the pressurised water reactor at the Sizewell B plant. They said the protest was to highlight the station's poor security and vulnerability to attack."

We recommend that Greenpeace be invited, along with officials from the British Nuclear Group and British Energy, to explore the current robustness of security at UK nuclear plants

Independent Commentary on Nuclear Security Risks

The following disturbing statements were included in an exhibition hosted by BNFL at its Sellafield site, prepared by the Science Museum.

"A nuclear device could be the ultimate weapon for a terrorist, but fortunately, such devices are very difficult and expensive to build. Although the UK government does not allow plutonium from civil nuclear reactors to be used in the UK's nuclear weapons, some people are worried about terrorists getting hold of plutonium illegally. By reprocessing and by transporting MOX fuel, which contains plutonium, all over the world, we are increasing the risk of plutonium proliferation."

"Some people believe that as reprocessing separates reactor-grade plutonium from spent fuel it increases the terrorist risk and should therefore be stopped. Leaving the material as spent fuel is often considered safer as it is less attractive to terrorists who would have to separate the plutonium from the fuel themselves—a long and difficult process. But terrorists could still use the spent fuel, with out separating out the plutonium, to make a `dirty bomb'".

"The Irish Government, environmental groups, and organisations opposed to nuclear proliferation have all expressed opposition to the opening of the MOX fuel manufacturing plant at Sellafield. The case put forward against MOX fuel manufacture includes, but is not confined to, the risk of plutonium proliferation, the possibility of slightly increased radioactive discharges, and economic arguments based upon the apparent lack of customer orders for the new fuel."

"Civil nuclear plants have to meet certain national standards of security and design to protect them against sabotage and terrorist attacks. But the attacks of 11 September 2001 forced many people to reassess the lengths that terrorists might go to."

"The high-level liquid waste that comes from reprocessing is stored in constantly cooled tanks at Sellafield. These tanks represent one of the world's most hazardous concentrations of long-lived radioactive material and are, therefore, a prime terrorist target. An attack on these tanks, similar to the one in New York in September 2001, could have extremely serious consequences for much of the UK and Ireland."

We found these observations alarming, but not alarmist. All of these statements were to be found at the web site for Sparking Reaction at:

www.sparkingreaction.com/home.shtml.

The web site, and exhibition, has now been closed.

We recommend representatives of the Science Museum be invited before the EAC to give evidence on the basis of these commentaries.

As part of the Government's evolving counter-terrorist legislation, the Home Secretary published a new draft Terrorism Bill on 15 September which includes a section on combating nuclear terrorism. The relevant clauses are reproduced at Annex 2. At the time of preparation of this submission, there was insufficient detail about these clauses to allow comment to be made.

Our judgement is that far from enhancing energy security of supply, the further deployment of nuclear technology would undermine security in the UK, and should be avoided. The second part of this submission demonstrates that "the lights can be kept on" by a range of decentralised and dispersed renewable energy technologies, none of which suffer the insecurities of nuclear power.

4. RESPONSES TO EAC'S QUESTION 3

Q3 What is the attitude of financial institutions to investment in different forms of generation?

What is the attitude of financial institutions to the risks involved in nuclear new build and the scale of the investment required?

4.1 Introduction

EERU does not pretend to expertise in nuclear financing. However,the authors of this memorandum attended an international expert seminar on the future prospects for new UK nuclear energy development, hosted by the Ditchley Foundation at Ditchley Park in June 2005, where the matter was keenly explored. The rules of reportage covering the event ("Chatham House Rules") preclude specific reporting of the remarks and observations of participants. We are, however, able to report that amongst those engaged were representatives from merchant bankers NM Rothschild & Sons, investment specialists Spirent, legal and business advisors Eversheds, and project management specialists CH2M Hill International.

4.2 Risk

The key issue for prospective future investment in new nuclear power capacity is risk.

This was addressed in an open forum roundtable discussion at the World Nuclear Association's Annual Symposium, held in London 8-9 September 2005.

The participants from the investment sector comprised the following: Roger Ewart-Smith, Managing director, Rothschild (UK), William Oulton, Managing Director, FTSE4Good, William Vereker, Managing Director, Lehman Bros, (UK).

In response to questions asking how investment banks considering investing in new nuclear power plants in the UK would factor into their risk assessment the implications of a terrorist attack on any other nuclear installation in the UK, or abroad, during the planning, construction or commissioning phase of any nuclear plant they might fund, the following replies were given:

Mr Ewart-Smith of Rothschild said that the private sector cannot easily take the risk in such circumstances. Mr Vereker of Lehman Brothers said there would need to be protection measures built in to secure their investment.

Therefore it is apparent that risk arising from terrorist actions could prove an impossible hurdle for the full funding of new nuclear plants, if the reactions of these two senior investment bankers specialising in energy investment are a good guide.

According to a report in The Business newspaper ("Rothschild Champions Nuclear Joint Venture", 26 June 2005): "NM Rothschild, the London merchant bank, is leading an initiative to finance, build and manage Britain's next generation of nuclear power stations. It plans to create a jointly-owned nuclear power company, provisionally named `New Nuclear', that could raise funds and manage the nuclear-build programme."

The article went on to record "The Business has learned that Rothschild has drawn up the plan on behalf of its client, state nuclear group BNFL, which is looking at ways in which a UK nuclear revival could be funded by the private sector. Rothschild's is proposing instead that a minimum of three of the UK's six utilities take stakes in New Nuclear. The three main contenders would be the UK arms of Eon, RWE and Electricite de France (EdF), whose European parent companies already operate nuclear power stations. Scottish and Southern Energy, Scottish Power and Centrica could also take stakes, although they could settle for long-term power purchase agreements instead."

It quotes an unnamed source from one of the UK power utilities as saying "Rothschild's are very keen to get back into nuclear."

Brian Count, who has recently retired as chief executive of RWE's UK arm is reported to have said of the scheme: "It's credible; it has merit. The issue is one of spreading the political risks."

This article is one of several to appear in the Sunday business press, and is typical of "kite flying" or "dipping one's toes in the water", to test the temperature. The assertions reported need to be tested with witnesses.

We would thus recommend that witnesses from Rothschild, Eon, RWE and Electricite de France be invited to give evidence before the EAC.

On the same Sunday, The Sunday Times ("Taxpayers `will pay billions' for nuclear plants," 26 June 2005) reported that a "new generation of nuclear power stations could be built only if the government is prepared to put billions of pounds of public money into the project." This was the conclusion of a leading economic think tank, Oxera, in a report issued on 27 June.

Oxera estimated that replacing the current nuclear power stations would likely cost about £8.6 billion, from which it thinks industry could expect a return on its equity of just 11%. "Our figures do not indicate there would be enough of an incentive for industry to finance a new nuclear programme," said Oxera director Derek Holt.

We would concur with the Oxera conclusions, and recommend that the EAC invite Oxera to present evidence to the Committee.

We note that in the House of Commons at Trade and Industry question time on 23 June 2005, the Trade and Industry Secretary Alan Johnson told MPs, in response to a request for a statement on the future of nuclear power in the UK, that:

"The 2003 energy White Paper set out the Government's energy policy on all sources, which obviously includes nuclear energy as well as fossil fuels and renewables. The Department keeps progress against the White Paper goals under review, through, for example, the work of the Joint Energy Security of Supply Working Group and the publication of the second annual report on the White Paper."

And in response to a supplementary question asking how many new nuclear power stations would this country need to maintain a 20% contribution, Mr Johnson added:

"I understand the point made by the hon. Gentleman, who has long been a proponent of new-build nuclear energy. I come to this question with what could be called clean-slate technology, as I am neither pro nor anti-nuclear. I feel very strongly that the 2003 energy White Paper got it about right when it said that at some point in the future "new . . . build might be necessary . . . to meet our carbon targets.That is still the case. There are issues around cost and waste which, as the hon Gentleman well knows, are difficult issues. The Prime Minister has said that we need to make a decision on new build in this Parliament. We intend to do so, but we intend to take a measured look at all the issues across the energy field and ensure that our decisions, if they involve nuclear new build, meet the obligations that we agreed in 2003 for further consultation and another White Paper."

(Official Report, 23 June 2005: Column 929-30)

At present, this would appear to remain the situation. We would thus recommend the Trade and Industry secretary, his energy minister Mr Wicks, and the Director General of Energy at the DTI, Ms Joan MacNaughton, be invited to give the committee further details on departmental thinking on prospective financing of new electricity generation technologies.

Annex 1

Shortly after the NRC Orders were issued, Joseph S Mahaley, Director of the US Department of Energy's Office of Security, testified before a session of the House of Representatives' Subcommittee on National Security, Emerging Threats, and International Relations of the Committee on Government Reform, held on 24 June 2003.

He told the Representatives that the 2003 DoE Design Basis Threat Policy is predicated on the information contained in the Defense Intelligence Agency, "Postulated Threat: to US Nuclear Weapons Facilities and other Selected Strategic Facilities," dated January 2003, also referred to as the Postulated Threat Statement.

"The Postulated Threat Statement details relevant threat information about postulated adversary team sizes, characteristics, capabilities and applicability to national security assets. The Postulated Threat Statement is based on intelligence information detailing actual terrorist attacks and the equipment and tactics utilized in the attacks, expert judgments regarding stated terrorist intentions and the ability of the terrorist to execute the stated objectives, and postulated capabilities based on the latest knowledge concerning terrorist activities."

"Prior to 11 September 2001, attacks in New York and Washington, the Department of Energy, in August 2001, requested that the intelligence community prepare an update to the 1994 Postulated Threat Statement. Although the 1994 Postulated Threat Statement was designed to be a 10-year document, we believed at that time that changes in international politics, emerging technologies and increases in worldwide terrorism required a reassessment. The National Intelligence Coordinating Committee assigned the primary responsibility for updating the Postulated Threat Statement to the Defense Intelligence Agency."

"The events of 11 September 2001, delayed the Postulated Threat Statement update effort due to reallocation of critical assets. However, the requested Postulated Threat Statement update was fully underway by January 2002. The primary entities collaborating on the revision to the Postulated Threat Statement were: the Defense Intelligence Agency, the Department of the Navy, the Department of the Army, the Department of the Air Force, the Nuclear Regulatory Commission, the Federal Bureau of Investigation, the Central Intelligence Agency, and the Department of Energy."

"The Department of Energy's Office of Security began revising the DoE Design Basis Threat Policy in October 2001. Our work on the revised DoE Design Basis Threat Policy was carried out in parallel with the work on the updated Postulated Threat Statement to reduce the amount of time that would be required to issue a final DoE Design Basis Threat Policy upon completion of the Postulated Threat Statement. After the release of the final Postulated Threat Statement in January 2003, we made final revisions to the Departmental Design Basis Threat Policy. The Policy was then coordinated within the Department of Energy, including the National Nuclear Security Administration. The revised Policy was approved by the Deputy Secretary of Energy on 20 May 2003."

"The new Design Basis Threat Policy will provide managers an improved threat policy document to plan, resource, and execute vital safeguards and security programs. In addition to updated threat information, the revised Design Basis Threat Policy includes a significant enhancement over prior policies—the use of the `graded threat concept'. The graded threat concept considers and accounts for factors such as consequences of a malevolent event, the attractiveness of the asset, the ability of an adversary to accomplish a given objective with an asset, and the resources required by an adversary to accomplish a given objective."

"The graded threat approach includes the establishment of `Threat Levels' for Departmental facilities and associated `Protection Strategies' based on the assets located at a given facility. The Design Basis Threat Policy separates `Threat Levels' into two distinct categories. One category of `Threat Levels' covers theft, disruption of mission, and espionage and foreign intelligence collection, and the second category—of `Sabotage Threat Levels'—covers radiological, chemical, and biological sabotage."

"Five `Threat Levels' are established for theft, disruption of mission, and espionage and foreign intelligence collection: Threat Level 1 (the highest)—for facilities that receive, use, process, store, transport, or test Category IA assets (ie, nuclear weapons, nuclear test devices, or completed nuclear assemblies) through Threat Level 5 (the lowest)—for facilities that are only required to maintain minimum safeguards accountability or security operations (ie, small office activities, tenants in large office buildings, or small isolated research or test facilities that do not possess quantities of special nuclear material)."

"Four `Sabotage Threat Levels' are established for radiological, chemical, and biological sabotage. Sabotage Threat Level 1 (the highest) through Level 4 (the lowest) are set for facilities, buildings, or operations that process, store or transport radiological, chemical, and biological materials by the degree to which these materials, if dispersed, would result in acute dose effects at the site boundary."

"Immediately following the events of 11 September 2001, the Department implemented measures to augment safeguards and security for the most critical Departmental assets. The recently revised Department of Energy Design Basis Threat Policy incorporates those measures and, in some cases, sets a higher standard for the protection of Departmental assets."

"The revised Design Basis Threat Policy is effective immediately and will be implemented over the next several years. Actions to augment existing safeguards and security programs for those facilities and assets that are considered the highest security policy will be undertaken as soon as practicable."

No such detail of the British DBT has been placed before MPs by anyone in a position of authority to know.

On the same day as the above testimony, the US Government Accountability Office issued a report entitled Nuclear Security: DoE Faces Security Challenges in the Post September 11, 2001, Environment, (GAO-03-896TNI).

The GAO reviewed how effectively the National Nuclear Security Administration (NNSA)—a separately organised agency within US Department of Energy (DoE)—manages its safeguards and security programme, including how it oversees contractor security operations. GAO also reviewed DoE and NNSA's response to the terrorist attacks of 11 September 2001. In this regard, GAO examined: DoE and NNSA's immediate response to 11 September; DoE's efforts to develop a new Design Basis Threat, a classified document that identifies the potential size and capabilities of the terrorist forces that DoE and NNSA sites must be prepared to defend against; and the challenges DoE and NNSA face in meeting the requirements of the new Design Basis Threat.

The USGAO was able to use unclassified material to provide three case studies of US military nuclear installations or security regimes—at the Rocky Flats former nuclear warhead production plant, outside Denver, Colorado; the Technical Area-18 (TA-18) at the Los Alamos Nuclear Laboratory in New Mexico; and the Transportation Security Division, which travels the United States interstate highways.

To our knowledge, no analysis independent of the nuclear security regulator has been conducted of the UK DBT, because the details of the DBT remain confidential. Here is one comment made by the USGAO on the US DBT:

"The number and capabilities of the terrorists involved in the September 11 attacks rendered obsolete DoE's Design Basis Threat, last issued in 1999. However, DoE's effort to develop and issue a new Design Basis Threat took almost two years; it was issued in May 2003. This effort was slowed by, among other things, disagreements over the size of the potential terrorist group that might attack a DoE or NNSA facility. Successfully addressing the increased threats will take time and resources, as well as new ways of doing business, sound management, and leadership. Currently, DoE does not have a reliable estimate of the cost to fully protect DoE and NNSA facilities."

Moreover, the US National Academy of Sciences was given a detailed assessment—in public session—on the "Vulnerability of Spent Fuel Pools and the Design Basis Threat", by Peter D H Stockton (a former Special Assistant on nuclear security for US Energy Secretary Bill Richardson, now senior investigator for the Project On Government Oversight [POGO]) on 10 May 2004.

He said on the Design Basis Threat (DBT):

"The Postulated Threat is a document created by the Defense Intelligence Agency—in conjunction with the US intelligence community. It indicates a significant threat against nuclear facilities in terms of numbers of adversaries, lethality of weapons and size of truck bombs. This document should be the basis for the size of the DBT."

Amongst the proposals made by POGO were some on a Possible Solution to Threat from Aircraft:

"Barrage balloons, similar to those used in World War II, lofted around the perimeter of a nuclear plant site would likely divert an oncoming plane, and would not be prohibitively expensive."

It is also on public record (TCNC Newsletter 3-4 July/August 2003) that a Workshop on Korea-USA Design Basis Threat (DBT) was held at INTEC of KAERI in Daejeon from 30 June to 2 July 2003, in which around 50 participants from MOST, KAERI, National Police Agency, KHNP, KEPCO, KNFC, KOPEC, and other competent authorities participated. The lecturers of the workshop were experts from the US Government's Sandia National Laboratories (SNL) in the US.

Annex 2

The Draft Terrorism bill, dated 13 September 2005, made public 15 September 2005, contains the following sections:

10 Trespassing etc on Civil Nuclear Sites

(2) In subsection (1) of each of sections 128 and 129 (trespassing etc on a designated site in England and Wales or Northern Ireland or in Scotland), for designated insert protected.

(3) After section 128(1) (sites in England and Wales and Northern Ireland) insert.

(1A) In this section protected site means.

(a) a civil nuclear site; or

Terrorism Bill

Part 1. Offences

(b) a designated site.

(1B) In this section civil nuclear site means.

(a) any premises in respect of which a nuclear site licence (within the meaning of the Nuclear Installations Act 1965) is for the time being in force; and

(b) so much of any premises of which premises falling within paragraph (a) form a part as lies between.

(i) the edge of the premises in respect of which the licence is in force; and

(ii) the outer perimeter of the protection provided for those premises.

(1C) For this purpose.

(a) the outer perimeter of the protection provided for any premises is the line of the outermost fence provided for the protection of those premises; and

(b) the line of such a fence shall be treated as including what would, assuming every gateway in the fence to be closed, be the line the gate in each of those gateways.

(4) After section 129(1) (sites in Scotland) insert.

(1A) In this section protected Scottish site means.

(a) a civil nuclear site in Scotland; or

(b) a designated Scottish site.

(1B) In this section civil nuclear site means.

(a) any premises in respect of which a nuclear site licence (within the meaning of the Nuclear Installations Act 1965) is for the time being in force; and

(b) so much of any premises of which premises falling within paragraph (a) form a part as lies between.

(i) the edge of the premises in respect of which the licence is in force; and

(ii) the outer perimeter of the protection provided for those premises.

(1C) For this purpose.

(a) the outer perimeter of the protection provided for any premises is the line of the outermost fence provided for the protection of those premises, and

(b) the line of such a fence shall be treated as including what would, assuming every gateway in the fence to be closed, be the line of the gate in each of those gateways.

12 Maximum penalty for certain offences relating to nuclear material

(1) In section 2 of the Nuclear Material (Offences) Act 1983 (c 18) (offences involving preparatory acts and threats), for subsection (5) substitute.

(5) A person guilty of an offence under this section shall be liable, on conviction on indictment, to imprisonment for life.

(2) Subsection (1) does not apply to offences committed before the commencement of this section.

(Text at http://www.homeoffice.gov.uk/docs4/Print-02C.PDF)

Part B

NON-NUCLEAR SUSTAINABLE ENERGY FUTURES: WHAT CAN THE UK LEARN FROM GERMANY?

In the UK, a vociferous minority have recently been arguing that we must re-open the nuclear energy option. Renewables and energy efficiency, they say, cannot make a big enough contribution to achieving the 60% cuts in fossil-fuel carbon emissions that will be needed by mid-century to avert catastrophic climate change.

Yet Germany, a larger and wealthier nation than Britain, with higher electricity consumption and a higher proportion of nuclear power but with poorer fossil and renewable energy resources, is on-course to phase-out nuclear energy by 2020, is phasing-in renewable energy many times faster than the UK and has detailed plans to cut its emissions by not just 60% but 80% by 2050.

In 2003-04, Britain's renewable energy sources, as the Table below shows, contributed only 1.3% of the country's primary energy and 3.5% of its electricity. By contrast, renewables in Germany contributed some 3% of primary energy and 7.9% of electricity in 2003—more than twice as much as in the UK.

Table 1

GERMANY AND THE UK: SELECTED COMPARISONS

How do Germany's and Britain's plans for the rest of this decade and beyond compare?

The UK Government in its 2003 White Paper on energy (DTI, 2003) emphasized the role of renewables, combined heat and power and energy efficiency in enabling the UK to meet its Kyoto treaty commitment to cut greenhouse gas emissions (mainly carbon dioxide, but including other gases) by 12.5% by 2012. No new nuclear power stations would be built, though the option of doing so in future was left open. By the end of 2004, the UK had reached its Kyoto target—though there are concerns that emissions may rise again in future years. Through the Renewables Obligation the Government plans to increase the proportion of renewable electricity to 10% by 2010 and to 20% by 2020. It has also pledged to go beyond Kyoto and cut emissions of the principal greenhouse gas, CO₂, by 20% by 2012.

Germany's renewable electricity targets are similar: 12.5% by 2010 and 20% by 2020. But by 2010 it also aims to achieve a 10% contribution of renewables to primary energy. Germany's Kyoto target is for a 21% cut in greenhouse gas emissions. By 2004, it had reached 19%.

The rate of growth in Germany's renewable energy supplies has been astonishing. Between 1998 and 2003 the contribution of biomass energy doubled, wind power capacity quadrupled and the number of solar photovoltaic roofs increased six-fold (see Figures 1a, 1b and 1c below). By 2003-04, as Table 1 above demonstrates, Germany's installed wind and solar photovoltaic capacities were respectively 19 and 70 times as great as those of the UK. (BMU, 2004)

Figure 1a: Growth in Wind Electricity Generation and Installed Capacity in Germany, 1990-2003. Source: BMU, 2004a

Figure 1b: Growth in Biomass Electricity Generation in Germany, 1990-2003. Source: BMU, 2004a

Figure 1c: Growth in Photovoltaic Electricity Generation and Installed Capacity in Germany, 1990-2003. Source: BMU, 2004a

Premium prices are paid for renewable power under Germany's Renewable Energy Sources Act, but the additional costs are modest, one Euro per month per household, and are added to electricity bills, not paid through taxes. The prices are different for each technology and the subsidy system is quite sophisticated. For example, each year the price paid for electricity from new photovoltaic installations falls by 5%, giving solar manufacturers a strong incentive to reduce prices as the size of their market expands. But the premium prices are guaranteed for 20 years, giving confidence to investors.

Not surprisingly, the renewable energy sector in Germany is booming. In 2003 it had a turnover of 10 billion Euros and employed 120,000 people. Long-term, investment is predicted to reach 18-20 billion Euros per year, and by 2020 the number of jobs is expected to reach 400,000. (Trittin, 2004).

Alongside measures to promote renewables, Germany has also been strongly encouraging more efficient use of energy, though such measures as incentives for combined heat and power generation and increasingly stringent regulations on the energy performance of buildings.

Germany's ambitious plans for the rest of this century are described in great detail in the Environment Ministry's 2004 report Ecologically-Optimised Extension of Renewable Energy Utilisation in Germany (BMU, 2004). By 2050, the report envisages primary energy use falling to around half the current level, despite continuing economic growth and rising prosperity, due to major improvements in energy efficiency and increasing use of combined heat and power plants. By then, renewables should be supplying 65% of the nation's electricity, 45% of its heat and 30% of its transport fuel. Nuclear power will have been phased out three decades ago and fossil fuel use reduced to around 20% of current levels. This "ecologically-optimised" energy system will allow Germany to achieve an 80% cut in greenhouse gas emissions, making a major contribution to international efforts to mitigate climate change, and setting an example to other wealthy nations.

So why has renewable energy, and wind energy in particular, progressed so slowly in the UK? To a considerable extent, this has been due to widespread misconceptions about the nature of wind power, its costs and its effects on the environment and the electricity system. The recent publication of Wind Power in the UK, a comprehensive, peer-reviewed report on the subject by the Government's Sustainable Development Commission (SDC, 2005) is therefore greatly to be welcomed.

Among the report's conclusions are that wind power is already relatively cheap, with on-shore wind currently costing around 3.2 p/kWh and offshore some 5.5 p/kWh. These costs should reduce to around 1.5-2.0 p/kWh and 2.0-3.0 p/kWh by 2020. By 2010, some 7.5% of UK electricity could come from roughly 4,000 MW of on-shore turbines and another 4,000 MW of off-shore capacity. Moreover, contrary to some other reports—in particular the 2004 report of the Royal Academy of Engineering (RAE, 2004)—the additional reserve and balancing power requirements of wind power are not onerous. By 2020, some 20% of UK electricity could come from wind at a very modest additional cost of some 0.17 p/kWh. These conclusions are very similar to those of the German energy agency DENA, which in 2005 reported that it would be quite feasible for some 20% of Germany's electricity to come from wind by 2020, that the requirement for additional reserve power and new power lines would be modest, and that the additional cost to householders would be only 0.5 eurocents per kWh (DENA, 2005).

The development of wind power on-shore in the UK has been also partially hindered by the fact that under the Renewables Obligation (and its predecessor, the Non-Fossil Fuel Obligation) there are strong financial incentives to developers to seek the windiest sites, which are often the most visually conspicuous and therefore most likely to be opposed by local amenity groups.

A further problem is that the value of the Renewables Obligation Certificates (ROCs) earned by producers of renewable power is determined by market forces and can go down as well as up in future years. This is a disincentive to investors, unlike the situation in Germany where investors know they will be paid a fixed price for their electricity for 20 years. However, on a more positive note, the new planning guidelines recently issued to Local Authorities have resulted in a higher rate of planning approvals for on-shore wind farms in the last year or so.

Though several UK offshore wind farms have now been built, offshore wind progress has recently slowed, partly as a result of mergers among the large Utilities funding such projects, and partly because most firms are reluctant to bear all the risks of being a pioneer in this new and very demanding environment, preferring to wait and learn from others' mistakes. The capital grants offered by the DTI to offshore wind projects do not seem to be sufficient to compensate firms for the very considerable initial risks involved - though few doubt that in the long term offshore wind will be a highly successful and profitable area of operation. (Harrison, 2005; Massy, 2005; Milborrow & Moller, 2005).

So how can the UK accelerate its progress in renewable energy and energy efficiency?

1. For new supply technologies, what is needed is more and "smarter" support, with higher levels of funding for technologies at earlier stages of maturity, such as offshore wave, tidal and wind, biofuelled electricity and photovoltaics. The DTI has recently introduced some promising innovative support mechanisms, with wave and tidal being given a mixture of capital grants and fixed price support, in addition to the value of ROCs. (for details, see Renew 2005 and http://www.gnn.gov.uk/environment/detail.asp?ReleaseID=143807&NewsAreaID= 2&NavigatedFromDepartment=False)

2. More community involvement in local renewable energy projects would help to gain improved acceptance. For example, priority could be given in planning rules and grant funding to projects with a proportion of local ownership.

3. Although renewable electricity is important, electricity provides less than 20% of UK delivered energy, so incentives to increase the renewable proportion of energy used in heating and in transport are urgently needed.

4. Efficient energy use in buildings, industry and transport needs to be encouraged by a mixture of incentives for efficiency and penalties for inefficiency, backed up by increasingly stringent regulatory measures.

5. The UK needs to accept that energy is currently too cheap, and that higher energy costs will encourage more efficient use (though with appropriate measures to protect low-income consumers).

6. The enormous purchasing power of Government, at both local and national level, could be used to greater effect to stimulate the market for low- and zero-carbon goods and services.

7. There should be scope for low interest loans (since Governments can borrow much more cheaply than the private sector) to assist investment in renewable and sustainable energy projects—perhaps though public-private partnerships, with Government funding some of the investment at low interest rates and the private sector funding the rest at higher rates of return.

8. And finally, we in the Universities are very conscious of the need for education and training for the many thousands of specialists who will be required to design, build and maintain the sustainable energy infrastructure of the 21st century. We also need a major programme of public education to enable non-specialists to be better informed on key issues.

To conclude, Germany's successful track record and its policies for future decades demonstrate that it is entirely possible to deploy renewables and improve energy efficiency fast. And its "ecologically optimised" scenario for 2050 shows in detail how an 80% cut in CO₂ emissions by 2050 can be achieved without nuclear power. This scenario, incidentally, is very similar to the UK Royal Commission on Environmental Pollution's scenario number four for 2050, which entailed a 47% cut in primary energy use, with energy mainly supplied by renewables (plus a much-reduced fossil fuel contribution) and no contribution from nuclear power (RCEP, 2000).

A new nuclear programme for the UK is undesirable because it would in practice (if not in theory) starve renewables of investment and send the wrong signals to investors and to other countries.

In short, the 2003 White Paper strategy remains broadly correct, but the UK Government needs to make a much stronger commitment to renewables and energy efficiency in the coming decades, along German lines, if its ambitious and laudable CO₂ reduction targets for 2050 are to be achieved.

Godfrey Boyle is Director of the Energy & Environment Research Unit at The Open University and editor and co-author of Renewable Energy: Power for a Sustainable Future (Oxford University Press, 2004) and Energy Systems and Sustainability (Oxford University Press, 2003).

An abbreviated version of this text was published in Science in Parliament, Journal of the Parliamentary and Scientific Committee, Summer 2005 (Boyle, 2005), as a synopsis of the author's contribution to the Committee's debate on "The Nuclear Option", held at Westminster on 13 June 2005.

REFERENCESBoyle, G (2005) "Non-Nuclear Sustainable Energy Futures: What Can the UK Learn from Germany?" Science in Parliament, Journal of the Parliamentary and Scientific Committee, Summer 2005, pp 22-23.

BMU (2004a) Renewable Energy Sources in Figures: 2004. Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), Berlin, 36 pp.

BMU (2004b) Environmental Policy: Ecologically-Optimized Extension of Renewable Energy Utilization in Germany: Summary. Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), Berlin, 58 pp.

DENA (2005) Planning of the Integration of Wind Energy in Germany Onshore and Offshore to the Year 2020: Summary of the Essential Results by the Project Team. Deutsches Energie Agentur (DENA), Berlin, 22 pp.

DTI (2003) Our Energy Future: Creating a Low-Carbon Economy, Department of Trade and Industry, 142 pp, The Stationery Office, London.

Harrison, L (2005) "Offshore in the Doldrums", Wind Power Monthly, April, p 6.

Massy, J (2005) "Turbulent Waters Create Market Drag", Wind Power Monthly, April, pp 48-52.

Milborrow, D and Moller, T (2005) "Technology Works Fine but Building Costs Rise" Wind Power Monthly, April, pp 52-53.

RAE (2004) The Costs of Generating Electricity: A Study Carried Out by PB Power for the Royal Academy of Engineering, 54 pp, Royal Academy of Engineering, London SW1P 3LW.

RCEP (2000) Energy: the Changing Climate Royal Commission on Environmental Pollution, 22nd Report, 4749, 292 pp, The Stationery Office.

Renew (2005) "Wave and Tidal Energy Demonstration Scheme" Renew, 156, July-August, pp 23-24. Network for Alternative Technology and Technology Assessment, Energy & Environment Research Unit, The Open University, Milton Keynes MK7 6AA.

SDC (2005) Wind Power in the UK a Guide to the Key Issues Surrounding Onshore Wind Power Development in the UK Sustainable Development Commission, 166 pp.

Trittin, J (2004) Renewable Energies for an Innovative and Future-Oriented Energy Supply. Transcript of speech to World Council for Renewable Energies Forum, Bonn, 29 May 2004

21 September 2005



© Parliamentary copyright 2006	Prepared 16 April 2006