Energy and Climate Change CommitteeWritten evidence submitted by GE Hitachi (NUC 22)

1. About GE Hitachi

GE Hitachi Nuclear Energy (GE Hitachi) is a world-leading provider of advanced reactors and nuclear services. Established in June 2007 after several decades of business collaboration, a global nuclear alliance was created by General Electric Company (GE) and Hitachi Ltd. (Hitachi) to serve the global nuclear industry. The alliance offers customers around the world the technological leadership required to effectively enhance reactor performance, power output and safety.

GE built the first commercial nuclear reactor over 55 years ago and now, together with Hitachi, continues to build them. GE Hitachi’s current portfolio of reactor technology consists of three main designs: the Advanced Boiling Water reactor (ABWR), the Economic Simplified Boiling Water reactor (ESBWR) and the Power Reactor Innovative Small Modular (PRISM). All three of these reactors can be built using modular processes to improve build efficiency.

The ABWR is the world’s first and only Generation III reactor with operating experience, based on a proven design that has been successfully built to time and to budget. The ESBWR builds on the ABWR’s proven advanced technology and introduces passive safety systems which keep the reactor core cool without the need for operator action nor AC power. PRISM utilises evolutionary sodium-cooled technology, which is based on decades of US technology development and more than 30 years’ operating experience. It is a simplified reactor design to preclude the possibility of a loss of coolant accident and incorporates advanced passive safety systems. PRISM has been designed with modular construction in mind enabling higher quality components, safer work environments and cost certainty from the reduction of on-site work and efficiency of factory production. PRISM is ideal for fissioning plutonium, recycling of used nuclear fuel and generating low carbon electricity.

A global infrastructure and finance company, GE is proud of its presence in the UK since the 1930s. GE currently employs over 18,000 people across the UK and has invested over £14 billion in GE’s UK-based businesses since 2000.

2. Summary

GE Hitachi is pleased to contribute to the Energy and Climate Change Committee Inquiry into Building New Nuclear—the Challenges Ahead. We welcome the UK’s continued commitment to the new nuclear build programme as part of the overall effort to decarbonise the economy.

As a world-leading provider of advanced reactors and nuclear services to a global customer base, GE Hitachi is engaged in supporting the operation of both existing plants and in developing new nuclear build. GE Hitachi based technology provides approximately a third of low carbon nuclear generation around the world.

To support new nuclear build, clarity around current electricity market reforms (EMR) in the UK will be vital. Other factors needed include a roadmap for the future nuclear fuel cycle, streamlined licensing and planning processes and a robust supply chain.

The current debate relating to the management of the UK’s existing nuclear legacy is also central to the wider discussion about investment in new nuclear. Politicians and the public are acutely aware that a new generation of nuclear plants will have long-term cost and environmental impact for the UK in terms of waste, and these issues must be taken into account in any consideration of the case for new build. The debate on new build therefore necessarily includes the reuse and reduction of the UK plutonium stockpile, plus the future nuclear fuel cycle strategy and nuclear advancement in the UK.

GE Hitachi sees the UK’s stockpile of civil plutonium, which is the largest in the world, as both a resource and an opportunity. We have brought forward a design based on GE Hitachi’s commercially available PRISM technology which we firmly believe provides a safe, cost-effective, feasible solution to the UK’s plutonium management challenges. PRISM can be part of the new nuclear build programme and at the same time utilise the legacy plutonium to provide low carbon electricity generation.

The UK Government has taken positive steps to consider the reuse of the UK’s plutonium and wider investment in new nuclear build. However, the details involved and the practical application of these steps will be paramount.

GE Hitachi is pleased to be working with the Nuclear Decommissioning Authority (NDA) to enable a more detailed assessment of our PRISM reactor in a number of areas, including the proposed commercial structure, the disposability of the fuel, the risk transfer model, the costs and licenseability.

3. GEH Response to the Inquiry Terms of Reference

Q. The Committee is aware of the significance of the electricity market reform process in determining the viability of investment in new nuclear power stations. What other factors contribute to investment decisions for new nuclear?

The Government’s political mandate to press ahead with a new generation of nuclear power must be based on firm public confidence in the UK’s ability to responsibly and cost-effectively manage nuclear decommissioning. The on-going debate relating to the management of the UK’s existing nuclear legacy is therefore central to the wider discussion about current investment in new nuclear build. This includes the reuse and reduction of the UK plutonium stockpile, plus the future nuclear fuel cycle strategy and nuclear R&D in the UK.

GE Hitachi would welcome progress towards a preferred policy of plutonium reuse that provides equal preference for alternative technology solutions capable of providing better value for the UK taxpayer.

With regard to the deployment of PRISM in the UK, additional basic research is not required to support plant construction or operation. Due to the extensive amount of engineering and testing completed to date, the start date of the project is almost totally dependent on stable Government policy framework and project funding. Project duration is most influenced by obtaining a Government nuclear license from the Office of Nuclear Regulation. Though GE Hitachi cannot guarantee a start date in the absence of UK licensing engagement, we believe the time required is broadly consistent with the licensing of a new MOX (mixed oxide) plant.

In order to support wider new-build, GE Hitachi believes the UK Government has taken a number of positive steps to encourage investment. However, the further practical application of many of these steps is paramount. The implementation of electricity market reforms is vitally important to this process. Other key factors needed include a clear roadmap for the future nuclear fuel cycle, further streamlined licensing and planning processes and a strong, well-integrated supply chain.

Q. What have been the political and policy impacts of the Fukushima incident?

Many Governments, including in the UK, have carried out in-depth analysis into the Fukushima Dai-ichi incident. Whilst this has revealed no fundamental safety weakness in the UK’s nuclear industry, it has underscored the importance of learning lessons that can contribute to making the nuclear industry even safer. While the Weightman Report has been an important exercise in reassuring the general public of the safety of the UK nuclear industry, Fukushima has undoubtedly refocused public attention on the safety of nuclear power.

In its consideration of new build options, the Government should take care to demonstrate a preference for technologies with particularly advanced safety features which can offer the most robust reassurance in this area. The industry will continue to implement safety enhancements to deliver continued safe operation of the nuclear fleet and consequently the role of passive cooled nuclear technology will become more advantageous in future. In particular, we also welcome the World Association of Nuclear Operators (WANO’s) efforts to support nuclear safety and security.

The GE Hitachi proposal for PRISM can fulfil these aims by re-using plutonium to generate low carbon electricity and, with PRISM’s simplified design to prevent a loss of coolant accident and use of advanced passive safety features, it can achieve this safely and securely. It is important to note that the incident at Fukushima Dai-ichi does not remove the pressing need for low carbon electricity, nor to safely and effectively manage the UK’s existing nuclear legacy. We see the UK’s stockpile of civil plutonium, which is the largest in the world, as a potential resource and an opportunity for the UK to tackle three major challenges: (a) the need to slow down/reverse climate change; (b) the need to prevent possible future energy shortfalls; and (c) the need to reduce a significant component of the costs and hazards associated with the nuclear legacy.

The closure of the UK MOX plant at Sellafield in 2011 was a significant consequence of the reactor shut-downs in Japan following the nuclear accident at Fukushima. What happened at Fukushima led not only to a rethink of nuclear power around the world but had important commercial implications for the UK’s approach to re-using plutonium fuel. There is clear evidence of a diminishing global market for MOX fuel. The UK will be pursuing a high risk strategy if their preferred option relies on a strong revival of this market.

Q. What lessons can be learnt for building new reactors to timetable and within budget from the experiences of France and Finland and elsewhere?

GE Hitachi believes that among the lessons learnt are that simpler, innovative reactor designs are crucial to achievement of on-time, within budget performance.

GE Hitachi’s ABWR is the only generation III reactor already built and in operation today. Four ABWRs have been brought into operation and to date these have provided more than 40 years of operational experience since 1997. A further four ABWRs are under construction and these projects include the Ohma-1 ABWR, Shimane-3 ABWR and Lungmen—1 & 2 ABWRs. Based on design simplification, proven innovation, and modular build, GE Hitachi is the only company to have completed a Generation III plant on schedule and on-budget. The average build time equates to less than four years.

GE Hitachi sees a well-established global supply chain for new build as a key factor crucial to meeting build times. In the UK, GE Hitachi has recently signed a memorandum of understanding with the National Nuclear Laboratory (NNL) and with Manchester University to provide expert technical input towards the potential deployment of GE Hitachi’s PRISM reactor to address the UK’s growing stockpile of civil plutonium. These build on an MOU signed last year with the CAP alliance to look at working together in developing PRISM in the UK.

After 30 years of development, GE Hitachi’s world-leading experts are confident PRISM is ready to be commercialised and can be operational within the same timeframe as other potential plutonium reuse options.

Like all potential options for treating Plutonium, PRISM will undergo a stringent regulatory approvals process. However, because of PRISM’s simplified fuel technology, it is highly time-competitive for achieving the UK’s end objective of reducing plutonium risk.

From a commercial perspective, GE Hitachi is proposing an innovative approach for safely and effectively managing the UK’s plutonium stockpile, namely, the UK Government will pay a plutonium disposition fee in exchange for the materials being processed and proliferation risk being reduced. The UK Government will neither own nor operate the facilities and therefore help to minimise the risk to the Government and UK taxpayer.

Over the lifetime of the plant, PRISM is more cost-effective than alternative technology options. It also has a guaranteed market for its product—low carbon electricity which we would expect to be treated in accordance with the EMR arrangements that are to be put in place for low carbon generators.

Q. What impact might global demand for nuclear power put on plans to build new nuclear power stations in Britain (there are currently 60 new nuclear power stations under construction worldwide and a further 150 planned)?

As the global demand for nuclear power increases, nuclear suppliers are firmly aware of the benefits of growing and maintaining supply chains. However this does not remove the potential risk that supply chains and qualified construction teams could be absorbed by projects taking place in other jurisdictions. Should the UK choose to develop PRISM for plutonium re-use, the viable option of re-using plutonium as metal fuel in a modern sodium-cooled reactor presents the UK with an important opportunity to take a global lead in responsible management of legacy nuclear materials, in proliferation risk reduction, and the development of next generation reactors. It can also manage the UK’s plutonium stockpile efficiently, securely and safely while generating approximately 600MWe low-carbon electricity at the same time.

Q. Are there any other potential barriers to the construction of new nuclear power stations in the UK?

The main factors that we consider important to support new nuclear include: a clear roadmap for the future nuclear fuel cycle and associated R&D; streamlined planning and licensing processes with available resources for efficient implementation; and a vibrant supply chain to enable development of the UK’s infrastructure. Investors require stable policy and measures to encourage investment in capital-intensive infrastructure projects.

In relation to plutonium re-use, a challenge to policy development is the often repeated assumption that re-using the plutonium in the form of MOX (mixed oxide) fuel is the only available technology for plutonium reuse.

The Nuclear Decommissioning Authority (NDA) took a preliminary view to rule out fast reactors as a credible option on grounds the technology was immature and the market did not expect them to be commercially viable for several decades. GE Hitachi outlined the reasons (and supporting evidence) for our opposition to this view in our submission to the UK Government consultation into management of plutonium stocks (February to May 2011). We see PRISM as an entirely feasible and economical solution for plutonium management that produces low carbon electricity, and can pre-treat used light water reactor fuel for disposal to increase available UK energy reserves.

Q. Other than reforming the electricity market and planning process, what steps could the Government take to remove barriers to the delivery of new nuclear power stations in the UK?

The UK NDA has commissioned a report from GE Hitachi to enable a more detailed assessment of our proposal for a PRISM fast reactor. The report (not yet published at the time of this writing, but which we would be happy to share with the Committee in due course subject to NDA approval) considers a wide range of factors including: commercial structure and implementation; safe disposability of the fuel; the risk transfer model from Government to the private sector; and the feasibility of licensing.

GE Hitachi’s approach clearly shows how the UK can use the plutonium to generate low carbon electricity by employing a proven technology with a well understood costs base. It also provides a cost-effective solution, with an innovative commercial model which minimises risks to the UK Government and ultimately the taxpayer. GE Hitachi believes that the PRISM reactor could be licensed and built in around 10 years—allowing five years for licensing and five years for construction. Under our proposal, the UK Government will neither own nor operate the facilities and therefore help to minimise the risk to the Government and UK taxpayer.

One of the key benefits of this technology is its improved economic performance compared to other methods of plutonium disposition. PRISM is a small, modular reactor designed to maximise the efficiencies of fabrication in a factory environment, and its fuel is designed to be simple to fabricate. Also, PRISM’s low carbon electricity product helps to offset costs. All these factors result in strong cost performance compared to other plutonium alternatives.

July 2012

Prepared 1st March 2013