Q
120Mr.
Jamie Reed (Copeland) (Lab): I have a few
questions—first, for Mr. Parker and Mr.
Spence. Do you have any frustration at all with the Bill with regard to
other, non-nuclear electricity generating sources and the management
and funding of the intergenerational wastes that they produce,
particularly the radioactive wastes that the oil and gas sectors
produce during their extrapolation and use? Are you frustrated by the
way in which those sectors are not expected to fund their
intergenerational waste in the same way as the nuclear
industry? Paul
Spence: I am not sure that it makes sense for me to
voice frustration. As well as operating nuclear power stations, we
operate a coal station, and I hope that in future we
will be a generator of more than just electricity from nuclear
stations. It is appropriate in considering new build that we can show
that we can cover the costs of what we are producing, and those costs
should include any waste that we produce. That is an appropriate
principle to start from and I am pleased to be part of the industry
that steps up to that principle at the
moment. Keith
Parker: I agree that the principle about the polluter
paying should be evenly distributed across the sectors, but the nuclear
sector is confident that it pays for its waste, decommissioning and
other
pollution.
Q
121Mr.
Reed: On a broader point, may I ask the whole panel, but
particularly Dr. Roxburgh, how long do you think it will be before the
UK could have a deep geological repository operating?
Dr. Ian
Roxburgh: That is a good question, but is probably
two months too early. I understand that the Government intend to
publish a White Paper towards the end of April, following on from the
Corum debate, to set out how they will define a community, how they
would expect a community to volunteer, and how they might define
compensation. So, the question is just a little early.
However, if you are thinking
about the technicalities rather than the politics—the difficult
issues of arriving at a community that has volunteered and has the
right technology—I do not believe that the technical aspects
need delay it over-long. Thinking back—Mr. Tipping
might appreciate this—it took just more than four years to sink
the Asfordby mine to what would be a similar depth, through some of the
most difficult hydro-geological material in the country, so there is
good experience. It should not take too
long.
Q
122Mr.
Reed: To the panel more generally, if a decision were
taken to postpone investment in nuclear build in this country pending
the creation and operation of a deep geological facility, what effect
would that have on investment decisions by those who wish to invest in
new nuclear now? Given that there are vast international opportunities
out there for everyone who wishes to invest in the UK market, what
effect would it have on the UK nuclear skills base?
Keith
Parker: I do not believe there should be delay
to the new build programme for that reason, but if
there were, it could have a damaging effect. One difficulty for nuclear
vendors—actually, it is not a difficulty; it is a
luxury—is that there is worldwide demand for new nuclear power
stations. If there were difficulties with the UK moving forward with
new build, they would not have any difficulty in going elsewhere. That
may well push the UK further back in the queue for new reactors, which
could have an impact on our ability to meet the climate change and
energy security challenges that are set out so graphically in the White
Paper.
Q
123Paddy
Tipping: May I follow up the investment point? The
Government have made it clear that there will be no public subsidy,
which means that you, Mr. Parker, and you, Mr.
Spence, will have to borrow substantial sums from the market. Are you
confident that the price of carbon—carbon trading is still in
its infancy—is robust and secure enough to bring comfort to
investors? Secondly,
we have spent a lot of time talking to you about the decommissioning
programmes and processes set out in the Bill, but at this stage, the
actual costs are not known, because we do not know the ultimate way
forward. Those are big issues for potential investors. Are you
confident that the investors are
there? Paul
Spence: On the first question, it is for us as a
private company to ask ourselves whether we are sufficiently confident
today to spend the money that we need to spend today on early-stage
work on our sites. The answer to that is yes. Today, I look at where
things are with the European emissions trading scheme and with the
market price for alternative fuels, and I say that it looks like a good
proposition for our shareholders to take forward and to spend the not
trivial but not huge amount of cash at this stage to develop the option
for new build. I expect that over the next three or four years, we will
need to examine how the carbon market has evolved and the costs that
the reactor vendors quote, once we have decided on the vendors that we
wish to go for, and ask whether there is a sensible investment
proposition. If it looks sensible for us as a company, having
considered the rest of the framework, including the back-end
liabilities, I suspect and am confident that funding sources will be
available either from company balance sheets or from the financial
markets to allow us to fund what we want to
do.
Q
124Paddy
Tipping: Is that your view, Mr.
Parker?
Keith
Parker: Yes, it is. If you consider the public
statements of other potential investors, they have all said
that given greater clarity about planning, licensing, the carbon price
and the cost of waste and decommissioning, they would be prepared to
invest. The Government, in their White Paper, have gone a long way to
delivering that clarity, and it will encourage investors to move
forward on new
build.
Q
125Dr.
Nick Palmer (Broxtowe) (Lab): My question is mostly for
Mr. Spence. You mentioned a review of the lifespan of
existing reactors, and in at least one case, you have found that an
extension of 10 years is appropriate. The other extension was also
significant. You appreciate that regardless of new build, the lifespan
of current reactors is important for our planning. Was that substantial
extension a surprise, and can we expect similar pleasant surprises when
you review the next ones? If so, should we not get on with the reviews
so that we have more certainty?
Paul
Spence: For Dungeness, which was the station that had
a 10-year extension, it was the first time that we had assessed its
life. The other stations have already had an extension to their
original accounting lives, so I am hopeful and expect that when
we examine the other stations, we will consider the prospect of further
10-year extensions. However, we will be dealing with a slightly
different situation at that point. Could we do it now? Part of what we
must consider is the real-world experience and results of our
inspection work on those stations, as components are irradiated and
age. We believe that the best time is as near as possible to the point
at which we must make a decision. That allows us to take those
decisions on the basis of best understanding, knowledge and data. That
is why we do it three years in advance of closure. To return to what
Dr. Weightman said, that fits with the programme of periodic safety
reviews required to confirm that it continues to be safe to operate
those stations.
Q
126Dr.
Palmer: On a slightly different point, the panel
unanimously decided that it would be good to have a single design for
reasons of economy, safety and so on. To play devil’s advocate,
one could apply that to many walks of life, such as making all office
buildings essentially the same design, but we tend not to do so,
because it is felt unwise to put all one’s eggs in one basket.
There might be yet further generations who would benefit from having
two different designs to compare. In view of that, is the panel sure
that it is a good idea to go for just one design?
Paul
Spence: If I can respond on that one, from our
perspective competition is very attractive. It helps both to create
innovation and to ensure that the vendors do not extract rent that you
do not want. So, in our view, you have a trade-off: whether the UK is a
sufficiently large market to support competition among reactor designs
as against the benefits that come from economies of scale and the
safety benefits associated with having one standard design. That is a
truth in respect of pretty much every market, from office buildings
through to motorcars: it is a question of how many the market can
sustain.
Q
127Dr.
Palmer: On balance, is a single design probably
better? Paul
Spence: On balance, one or two, rather than
multiple. Dr.
Mike Weightman: May I add that, for us,
we are not getting into the commercial, availability or
diversity of electricity supply routes argument? It is just about
concentrating on how we secure safety in the most effective way. That
was the
issue. Clearly, if you
went for two different designs, you might have a fleet of both, for
instance, which would give some of that commonality and would provide
learning opportunities. Also, from our point of view, it would be
looked at on a worldwide basis, because we do not just look at the UK
aspects, but at what can be
learned from similar designs internationally.
Unfortunately, with the advanced gas-cooled reactors and the old Magnox
reactors we do not have that luxury. For whatever reason, every power
reactor seemed to be designed differently in some way or
another. Q
128Dr.
Iddon: There are two different parts to this. Does the
panel have a view on the siting of the new fleet of stations? Are the
present sites adequate or, as in the case of Dungeness, perhaps, not
adequate? I think that Dungeness was taken up there partly for safety
reasons but mainly to provide some jobs up there. Would you be looking
for alternative sites, do you
think? Paul
Spence: I will answer for our company. We have eight
sites around the country adjacent, in most cases, to our existing
stations and, in one case, next to a decommissioned Magnox station. We
believe that, from a technical standpoint, all those sites are suitable
for new build. The factors we look at in considering which become the
most desirable sites include grid connections, access to cooling, the
engineering specifics of the particular sites and, in some cases, the
politics around the acceptability of nuclear north of the border. They
will all be factors that we will need to take into account. We will
also need to see what the Government identify as the criteria as part
of their strategic siting process. That will allow us to identify which
of those sites look
good. Keith
Parker: From the industry’s point of view, we
have made the assumption that the new build is likely to take place
adjacent to existing sites, for all sorts of reasons that Paul has
already
described.
Q
129Dr.
Iddon: The second question is about the
moneys that will be set aside for future
decommissioning way down the line. Are you all satisfied that the build
adequately protects those moneys and do you have a view on how those
moneys should be invested, or will you be giving the Government a
view? Keith
Parker: I understand that there will be more detailed
guidance coming out about the way in which both the funded
decommissioning programme and the funding arrangements for it
will need to be taken forward. But in general the proposals in the Bill
for an independent segregated fund controlled by an independent
body provide for a sensible way forward and should ensure that the
moneys are dedicated to the purpose of decommissioning and waste
management. We certainly advocated that in our responses to the various
consultations and believe that it is the correct way
forward.
The
Chairman: That is the end of our evidence session. Thank
you very much, gentlemen, for your attendance this afternoon. Will our
next and final set of witnesses please come
forward? Welcome to
our final set of witnesses. I hope that you can invigorate the
Committee in our final hour. Will you all introduce yourselves,
starting with Mr.
Marsh? Russell
Marsh: I am Russell Marsh, head of policy at Green
Alliance. Robin
Webster: I am Robin Webster, head of the energy and
climate team at Friends of the Earth.
Benet
Northcote: I am Benet Northcote, chief policy adviser
at
Greenpeace. Tom
Burke: I am Tom Burke. I have a wide range of
affiliations with non-governmental organisations, academic bodies,
commercial companies and public authorities. I am not representing any
of them. I would like to make it very clear that I am here in my own
right. I am not speaking for any of the organisations with which I have
an
affiliation.
The
Chairman: Again, our Minister will kick off this
session.
Q
130Malcolm
Wicks: Given what I think is your stance on nuclear
energy, is it a stance that can be tempered or even changed by
evidence, experience and perhaps even the state of public opinion? Or,
is it a fundamentalist article of faith that you are opposed to it for
ever? Tom
Burke: It is certainly not my stance. I do not know
how you can take a fundamental stance on technology.
What matters is how relevant the technology is to the problems that it
seeks to address. Therefore, my stance is evidence-based. I would like
to say—and my colleagues can speak for themselves—that
the proposition that any addition to nuclear power in Britain can
contribute significantly either to our energy or climate security is
not supported by the
evidence. Benet
Northcote: I would agree with that. There are clear
and evident dangers to nuclear power. There are great risks and massive
issues of cost associated with waste and potential risks to future
generations. I would agree with Tom that essentially the argument is
pragmatic. Here is a technology that will do nothing, or very little,
to reduce our CO2 emissions at vast cost, and which will not
help us to meet our renewable energy
targets.
Q
131Malcolm
Wicks: Can I just ask—are our two very
distinguished visitors saying that civil nuclear power would not reduce
CO 2 emissions? What is the scientific evidence for that
extraordinary
proposition? Tom
Burke: Yes, as a matter of
practice—either globally or in this country—it
contributes very little. Let me take you through the rationale for
that. The Chinese have the world’s most ambitious nuclear power
programme. They propose to build 40 reactors by 2030 and, being the
Chinese, there is some good prospect that they will do that. If they
succeed, nuclear power will contribute 4 per cent. to China’s
electricity production by 2030. The rest will come from coal. The point
that we both made is that it cannot contribute significantly at that
scale. If you take the broader global picture, and you look at the
number of reactors that have to be built between now and 2030 in order
to keep the current level of nuclear contribution, you have to build 42
GW between now and 2015 and 168 GW in the 10 years after that. That is
what you have to do to maintain the current contribution of nuclear
power. If you look at our current rate of build, which is about 1 GW a
year, even if you scale that up dramatically—and there are good
reasons to believe that that might be quite difficult—the best
that you can hope for is a slow decline in the contribution of nuclear
power to meeting our emissions reductions targets. Meanwhile, a large
number of coal-fired power stations will be
constructed. If they operate over their 50-year lifetime, they will
make it extremely difficult for us to meet global and national goals
for reducing our emissions to the point at which the climate is secure
and stable. There is a strong evidence base that nuclear power cannot
contribute very
much. Were
you magically to overcome all the extraordinary difficulties of rate
and magnitude of building new nuclear power stations, of course they
could contribute. In the specific context of the United Kingdom, there
is a need to replace existing nuclear and some coal-fired power
stations that are coming offline, as I think you, Minister, and others
have pointed out. The emerging problem arises some time in the period
between 2012 and 2015—estimates vary—but the most
optimistic assessment of when new nuclear can contribute to meeting the
generation gap is 2017, and that is EDF’s estimate. I think that
the Government’s own consultation paper suggested that it might
actually be a bit later than that, at around
2020. In the meantime,
we will fill the gap with fossil fuels, so the issue becomes one of
priorities. What do you think it is most important to concentrate
public policy on doing? I suspect that my view is shared by my
colleagues, although they will speak for themselves. It is that it is
most important to concentrate on the fact that if we do not do
something very quickly to make fossil-fuel-fired electricity generation
carbon neutral, we will have made commitments that will be extremely
expensive and possibly impossible to
unravel.
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