Select Committee on Trade and Industry Written Evidence


APPENDIX 33

Memorandum by the Institute of Physics

THE PARTICULAR CONSIDERATIONS THAT SHOULD APPLY TO NUCLEAR NEW BUILD

(a)   What nuclear offers

  Nuclear fission has a major role to play in lowering carbon dioxide emissions, as it can meet base-load electricity demands and is practically a zero carbon dioxide emitter. Given that most EU nations are poorly prepared to meet their respective Kyoto Protocol emissions targets, new nuclear power plants will need to be commissioned to replace current plants as they reach the end of their lives. If new nuclear power plants are not constructed, then by 2020 there will be a power void (estimated to be a 12% cut in electricity generation according to the Energy Review consultation document) which will most probably have to be filled by fossil fuel electricity generation resulting in more, not less, carbon dioxide emissions.

  Unless there is new nuclear build, the reliance on fossil fuel energy generation will be unabated. The decommissioning of nuclear plants in Scotland, for instance, will result in the loss of approximately 55% of its current electricity generating capacity by around 2023. New nuclear plants are required in order to maintain and improve not just the UK's, but the EU's current diversity, security and environmental balance of electricity supply.

  On the critical path of ensuring an extant option for nuclear power is the technical assessment or "licensing" required by the regulatory authorities. This is a three-year process which does not pressure implementation but would ensure an option to move forward while nuclear is kept open.

(b)   Novel reactor designs

  While the popular perception in Europe and North America is that nuclear power is an industry in decline, the reality worldwide is the reverse. Over recent years there has been a wave of new nuclear plant construction in the Far East, most notably in China. In addition, Finland and France are constructing new nuclear plant.

  The Institute's technical report, The future of fission power—evolution or revolution?, published in April 2004, highlights the technical advances that are being made in reactor designs worldwide. New modular reactors are being developed, which have lower capital costs, are more efficient, safer to operate, produce significantly less radioactive waste and generate electricity at a lower cost unit than the current fleet of reactors.

  The report reviews both evolutionary and revolutionary reactor designs. Evolutionary designs capitalise on existing technology and introduce system simplifications that improve safety while, at the same time, reducing costs. For example, the AP1000 design, a pressurised light water reactor from Westinghouse, already licensed in the US, and the European Pressurised Water Reactor, which is the design adopted by both Finland and France, are both ready to seek licensing in the UK. A key feature of the evolutionary designs, following 9/11, is that they meet ever more demanding safety and security requirements. A study sponsored by the Electric Power Research Institute, in the US, determined that current reactor structures are robust and protect the fuel from impacts by large commercial aircraft.

  Revolutionary designs reviewed in the report include the development of High Temperature Gas Reactors and Pebble Bed Modular Reactors, which represent the first of a class of "revolutionary" systems. These revolutionary designs will be inherently even safer and more efficient than the evolutionary class. The Pebble Bed Modular Reactor (PBMR) is being developed in South Africa by an international consortium. Key benefits of PBMR include the fuel's ability to withstand very high temperatures, and the fact that the concept is of a simple modular construction with consequential low capital cost of units, which may be produced in substantial numbers ensuring economy of scale. These systems also have the potential for duality of mission, ie electricity and hydrogen production, desalination, symbiotic process heat for energy intensive chemical processes.

  The report concluded that both types are needed. The evolutionary designs are needed to plug the gap left by the retirement of current nuclear and fossil fuel plants, and to avoid the sizable increase in carbon dioxide emissions in the near future. Revolutionary designs could then follow, delivering safe, long-term competitive and sustainable energy.

  One of the key problems of ensuring fission's future in the UK could be the lack of a skilled work force. The nuclear industry, at present, plays a key role in the UK economy, employing 40,000 directly and supporting many additional jobs—new build would offer opportunities to maintain and grow the work force, while keeping alive the knowledge and expertise that has been built up. New build would also benefit the UK in terms of GDP. The benefit in GDP terms of a programme to replace the current nuclear fleet has been assessed in an independent study[104] at around £4 billion per year once the stations are all operational.

  The Institute's report also makes reference to work that is jointly being carried out cooperatively by a number of countries on the US Department of Energy's Generation IV programme. This activity is aimed at developing advanced reactor systems and fuel cycles for deployment circa 2030. International collaborative work has selected candidate systems to be developed that further improve the economics, safety, environmental impact and security in order to meet the stringent challenges of sustainable development energy generation in the 21st century.

(c)   Legacy waste and new build

  In considering the issues relating to managing radioactive waste, it is fundamental to separate those dealing with pre-existing radioactive waste from issues involved in the construction of new nuclear plants. Even if a decision were made not to construct new nuclear plants, the need to manage nuclear waste produced as a consequence of past and current electricity generation and plant decommissioning will remain. The new nuclear plants, highlighted in the previous paragraphs, will generate significantly lower amounts of waste. A fleet of 10 new reactors would be enough to maintain the UK's share of nuclear electricity at around 25% and such a fleet, operated for their full design lifetime of 60 years, would add less than 10% to the volume of waste which already exists. The new waste would also be easier to deal with than much of the legacy waste. The UK should not use the challenge of dealing with some of the more difficult legacy wastes as a basis to delay the decision for a new nuclear build programme.

THE IMPLICATIONS OF INCREASING DEPENDENCE ON GAS IMPORTS

(a)   Issues of concern

  Natural gas is expected to fuel the production of over two-thirds of the UK's electricity by 2020. Such a dependence on what will increasingly be an imported resource is a major concern. The Institute published a report in 2004, Gas supplies to the UK—a review of the future, which clearly highlights the risks associated with a dependence on importing natural gas, to meet the UK's need for energy.

  The report stated that from 2006 the UK was forecast to become a net importer of gas. However, it is of concern to note that the UK actually became a net importer in 2004. This has implications for the UK's security of supply, in terms of:

    —  potential threats to supply arising from political instability in gas-producing nations;

    —  price disruptions arising from risks associated with the supply and demand of gas; and

    —  concerns relating to the transit of gas and the facilities through which it is delivered.

(b)   Security of supply

  Security of supply relates not only to the prevention of physical interruption, but also to the resilience to fluctuations in energy and fuel prices. The UK is not alone in the changing composition of its energy supply. Other EU member states are subject to similar legislative drivers as the UK, with the result that there will be more competition for the same gas resources as member states attempt to meet their own carbon and pollutant-reducing targets—a substantial growth in demand for gas is forecast. Expansion of the EU will exacerbate the situation.

  Furthermore, substantial costs associated with the supply, transport and delivery of gas from sources thousands of kilometres away will add to the cost of the commodity in the market. The rich gas fields in the Yamal Peninsula, northern Siberia, are being connected to consumers in Western Europe via a 4,000 kilometres long dual pipeline, along a route via Poland. The pipeline capacity, by completion in 2010, will be 65.7 billion cubic metres per year. Other pipelines, for example, from Turkmenistan via Iran and Turkey, Qatar via Egypt and Nigeria via the Sahara, are being considered.

  Currently, only two interconnectors move gas between the UK and continental Europe, an obvious vulnerability in terms of physical interruption of supply. However, as noted in the Energy Review consultation document, an increased investment to the UK's infrastructure has led to a new pipeline from Norway that is due to open in 2006, the UK-Belgium interconnector is to be upgraded to accommodate increased supply from European countries, and a second pipeline from the Continent is also due to open this year. But, it is investment in infrastructure at other points of the long supply chain, over which the Government has little influence, that cause most concern.

  Another concern is that the process of transporting gas is inefficient. Transporting the gas requires compressor stations roughly every 100 kilometres along the pipeline. The compressors typically utilise a small proportion of the transported gas to power the turbines used to pressurise and move the gas. It has been estimated that up to 25% of the natural gas may be lost to the consumer in transporting the gas over thousands of kilometres. Of further concern regarding greenhouse gas emissions is that as much as 4% of the gas may also be lost to the atmosphere (methane is an even more potent greenhouse gas than carbon dioxide).

  In a global analysis, it is unclear how the greenhouse gas emissions incurred in transporting natural gas over such long distances should be allocated. To put the issue into context, sequestration of carbon dioxide from coal-derived electricity generation would be environmentally more acceptable than transporting Russian gas to the UK. According to the EU's forecast for natural gas prices, it will be more economical too.

  Indeed, questions have been raised about whether the real cost of supplying gas to the UK, positioned at the western extremity of a very long supply chain, has been underestimated. This is key to the energy strategy pursued by the Government and links directly to the economic barriers faced by renewable and clean coal energy (new technology, scale of operation) and some of the arguments against nuclear generated power. An in-depth study carried out by PB Power for the Royal Academy of Engineering concludes that gas-fired Combined Cycle Gas Turbine (CCGT) plants currently offer the cheapest method of generating baseload electricity. However, when fuel price fluctuations are taken into account and with the possibility of future carbon dioxide emission allowances potentially adding a further 50% or more to the generating costs from new gas and conventional coal plants, nuclear power and renewables options become much more competitive.

  The compact transport and storage and excellent safety record offered by Liquefied Natural Gas (LNG) make it an attractive fuel option. Although currently making-up a small percentage of Europe's gas supply, LNG already introduces a significant element of supply diversity in those regions, such as southern Europe, where the specialist infrastructure required has been installed and continues to be expanded. In the UK, new LNG terminals have been planned. Whilst a move to LNG will improve source diversity for the UK, there remain substantial infrastructure cost issues to resolve before implementation on a large scale will proceed. Demand for LNG is also increasing worldwide, notably as the US increases its capacity for importing the fuel.

  Although the last couple of decades have witnessed significant political upheaval in major gas-producing nations such as the former Soviet Union and Algeria, there was surprisingly little impact on the exports of gas during those times. Whilst this might indicate that gas exports have some resilience to political uncertainty, it would be risky to assume that this will always be the case. Indeed, in the current climate of increased threat from deliberate acts of disruption, including sabotage, terrorism and protest, the insurance market views supplies of Russian gas as being particularly exposed to risks caused by political or terrorist action against the transportation infrastructure, to the extent that up to half the capacity to the UK could be at risk of disruption every eight years.

  Serious concerns exist about the levels of investment required to commission and maintain the required infrastructure in some of the major gas-exporting nations. Geological risks along long lengths of pipeline can be predicted and designed for, but not eliminated entirely. Building dual pipelines and encompassing shutoff valves that allow flow to be diverted to the parallel pipe, albeit with a loss in capacity, will mitigate risks to the supply, but add cost and do not provide guarantees.

  There is some unease amongst European governments and gas companies in trading with potentially unreliable partners: the recent case of the disruption of Russian gas supplies to the Ukraine being a good example. Furthermore, a new element of concern has emerged with the creation of the Gas Exporting Countries Forum (GECF) in 2001, which includes Russia and Algeria. Although the Forum has expressed no intention to form a cartel to exert control over European gas supplies and prices, there is the potential for conflict with those, such as the UK, who wish to liberalise European gas markets.






104   Macroeconomic Analysis of Nuclear Plant Replacement, Oxford Economic Forecasting; March 2005. Back


 
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Prepared 21 December 2006