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ISIS Report 22/09/08

Nuclear Industry’s Financial and Safety Nightmare

A devastating new report exposes UK’s unfolding nuclear catastrophe Dr. Mae-Wan Ho

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Voodoo economics dooms nuclear renaissance

Paul Brown, environmental correspondent of The Guardian newspaper in Britain, has produced a detailed report documenting why it is not possible to achieve what the UK Government says it will do, build a new generation of nuclear stations without public subsidy [1].

New build will not be possible without large sums of taxpayers’ money being pledged, and extending the unlimited guarantees to underwrite all the debts of the existing and future nuclear industry.”

One should point out here that it appears impossible to have new nuclear build in the United States even with extremely generous public subsidy [2] (Nuclear Renaissance Runs Aground, SiS 40). In the UK, there is already extensive hidden subsidy to the industry.

Brown’s report exposes how badly the nuclear industry has performed over the entire 50 years of unfulfilled promises, and the escalating bill to the taxpayer.

The UK nuclear industry, like that in the US [2], has never completed any project on time or on budget and has saddled the nation with a mammoth nuclear fuel reprocessing complex at Sellafield that’s a financial as well as safety nightmare.

British Energy, the commercial company privatised in 1996, soon ran into serious financial trouble [3] (see Box 1), and had to be taken over by the government. That meant the taxpayer has essentially underwritten all its debts and liabilities so the company can never go bankrupt. Brown remarks: “This commitment dwarfs the risk to the taxpayer of the Northern Rock nationalisation.” It means paying for the maintenance and decommissioning of ageing nuclear power stations, and worst of all, the upkeep of the Sellafield nuclear reprocessing complex.

British Energy

British Energy is UK’s largest electricity provider established and registered in Scotland in 1995 to operate the 8 most modern nuclear stations, two advanced gas-cooled reactors (AGRs) from Scottish Nuclear and five AGRs and one pressurised water reactor (PWR) from Nuclear Electric. The remaining Magnox power stations from these two companies were transferred to Magnox Electric which later became the generation division of British Nuclear Fuels (BNFL). British Energy was privatised in 1996 and bought the 2 GW Eggborough coal fired station from National Power in 2000.

The company ran into financial trouble in 2002, when it first approached the British government for financial aid. In September 2004, the government bailed out the company with over £3 billion investment, and took over all its liabilities.

So why is the UK government so keen to build new nuclear stations? Its own figures show that a new nuclear power programme will cut gas imports by only seven percent and carbon emissions by four percent. Yet the programme for four gigantic new stations will get policy encouragement and public subsidy on the false claim that Britain needs them for energy security and reducing carbon emissions.

It will take 10 to 20 years before the first new nuclear stations can be built and producing power in Britain. By that time, the liabilities will be so great that the Government will have to renationalise British Energy, Brown says.

The crisis may come much sooner, and British Energy may have to start closing some of its nuclear stations permanently because the only remaining storage space for spent fuel at the Sellafield complex in Cumbria is running out.

Three of the four new reactor designs being put forward for UK construction have never been built. The only proposed “Generation III” plant under construction is Areva’s EPR, an advanced pressurized water reactor (also under consideration in Ontario) in Finland. It was due to generate electricity in 2009. Delays have dogged the construction from the outset and its completion date has been repeatedly put back, currently to 2011, with additional cost of €1 billion to the €3 billion originally agreed.

Nightmare at Sellafield

Sellafield’s nuclear complex consists of five important operations: two reprocessing plants, the MOX (mixed oxide fuel) plant, the evaporators, and the vitrification plant (that turns highly dangerous radioactive liquid waste into safer glass). With more than 10 000 employees, the massive complex is in crisis. Its reprocessing works and plutonium fuel plant are all failing, costing the taxpayer £3 billion a year and rising.

The taxpayer already faces £73 billion clean-up bill for decommissioning existing nuclear plants, most of that will be spent in Sellafield.

Reporting for the BBC, David Shukman wrote of his visit to Sellafield [4]: “I saw for myself one of the “pond” in which an unknown mass of radioactive material was dumped in the 1950s....Beneath the unruffled surface of the water lies an unrecorded collection of .rusting metal containers holding radioactive waste, including spend fuel rods…Beside it, workers are constructing a vast new building to handle the materials when a retrieval operation eventually gets under way.”

Jim Morse, a senior director at Sellafield sums up the sorry state of affairs in record keeping: “We still have a lot to discover, we haven’t started waste retrieval in those parts of the estate where the degradation and radioactive decay has been at its greatest.” Morse also said the cost of cleanup could go up even further by “some billions”. That’s not the only problem.

The flagship Thorp reprocessing plant, built to extract plutonium and unused uranium from spent nuclear fuel [5] (see Energy Strategies in Global Warming: Is Nuclear Energy the Answer?. SiS 27) was closed for three years from 2005, and remains under severe operating restrictions and cannot complete its long-overdue contracts to process spent foreign fuel into MOX fuel [1]. The closure of the elderly Magnox reprocessing plant has been postponed, leaving the UK unable to meet its international commitments to cut radioactive discharges into the Irish Sea. The plants for dealing with the residue of reprocessing – the volatile and dangerous heat-producing high-level liquid waste – fail to work as designed, causing the whole Sellafield production line to seize up. The MOX plant is supposed to make money by turning plutonium and uranium into new fuel, but has been a technical and financial disaster. The fuel was supposed to be the safe way of returning tonnes of plutonium recovered during reprocessing to its country of origin. This plan has failed, but the Government has no policy for dealing with the ensuing economic and political crisis. As a result, Sellafield is becoming the world’s nuclear dustbin, because foreign nuclear wastes are not being repatriated.

As Peter Bunyard wrote in 2005 (SiS 27) [5], many critics of MOX within and outside the nuclear industry have repeatedly pointed out that the gains are far outweighed by economic and environmental problems. “In France, reprocessing spent fuel to extract plutonium for MOX fuel manufacture will save no more than 5 to 8 per cent on the need for fresh uranium. Meanwhile, as experience in both France and Britain has shown, reprocessing spent reactor fuel leads to a hundredfold or more increase in the volume of radioactive wastes. In the end, all the materials used, including tools, equipment and even the buildings become radioactive and have to be treated as a radioactive hazard.”

It is highly questionable whether the use of MOX fuel will actually reduce the amount of plutonium. Reactors have to be modified to take MOX fuel, and it is estimated that supply exceeds demand by a factor of two. Meanwhile MOX fuel contains up to 5 percent plutonium and is ideal for terrorist, as the plutonium can be easily extracted to make bombs.

The world’s nuclear waste dump with no end in sight

While Britain piles up its own and foreign nuclear waste, there are currently no plans or sites for a repository to store or dispose of it [1]. The earliest dates for a deep underground intermediate waste repository are notionally 2045 and high level waste 2075. In reality there are no plans for either. Storage space for spent fuel is also running out at Sellafield. Spend fuel assemblies are stacked three deep at the reception ponds and is already a major source of hazard [3] (see Close-up on Nuclear Safety, SiS 40). If Sellafield cannot take any more spent fuel, then British Energy’s reactors will have to shut down.

In the meantime, an average of 300 tonnes of spent fuel has continued to be delivered to Sellafield each year and none has been cleared through reprocessing in order to free storage space for those continued deliveries. There is an increasing backlog of both spent fuel and all forms of waste. UK’s Nuclear Decommissioning Authority reveals in June 2007 that there are 30 000 tonnes of uranium and 100 tonnes of plutonium in store, but no policy for managing the material in the long term

In the context of a massive new nuclear building programme, Sellafield is not just a huge embarrassment but a graphic demonstration of how expensive mistakes can be. The National Audit Office says in 2008 that it is creating an “apparently ever escalating bill” for the taxpayer.

Massive nuclear liabilities discounted by the government

In April 2007, a cost benefit analysis by the Department for Business, Enterprise and Regulatory Reform (BERR) concludes that nuclear power is likely to cost 4.8 pence per kilowatt hour to produce, provided all future nuclear waste costs are discounted.  British Energy’s undiscounted liabilities in 2007 were £14.5 billion, more than double the amount in the liabilities fund designed to pay decommissioning costs [1]. The nuclear liabilities fund is invested in a supposedly ring-fenced fund, like a pension fund for nuclear facilities. But in the past those funds have been raided by the nuclear industry to build new nuclear facilities, such as Sizewell B, and the money has evaporated.

The government has pledged this will not happen again and the discount rate of 3 percent is based on the assumption that the liabilities fund will grow at the rate of 3 percent. The theory is that by the time decommissioning is necessary the fund will neatly pay for everything. The National Audit office and the House of Commons Committee on Public Accounts concluded: “the taxpayer is still exposed.”

Liabilities could easily exceed assets when prices are volatile. In particular, the price of uranium is rising, and experts all say that the supply of good quality uranium is finite, which is also one major reason nuclear power is unsustainable [6]  (see The Nuclear Black Hole, SiS 40). . A shortage of suitable uranium would do to nuclear fuel when the price of oil has done to the cost of running the family car. In January 2008, the cost of uranium had gone up to US$95 a pound, compared with $85 a pound in March 2007. This would drive up nuclear fuel costs by £146 million a year.

It is quite clear that the British government has been doing everything to make nuclear power look economically competitive, and will give all the overt and covert subsidies to make it happen. The new breed of nuclear power stations are going to be among the biggest power plants in Britain and will be located far away from where most of their electricity will be used. This will require a large investment in the national grid adding further to the financial drain and the inefficiency of the nuclear option.

References

1. Brown P. Voodoo Economics and the Doomed Nuclear Renaissance, a Research Paper, Friends of the Earth, 2008, http://www.foe.co.uk/resource/reports/voodoo_economics.pdf

2. Ho MW. Nuclear renaissance runs aground. Science in Society 40 (to appear).

3. British Energy, Wikipedia, 13 July 2008, http://en.wikipedia.org/wiki/British_Energy

4. “Nuclear clean-up costs ‘to soar’” David Shukman, BBC News. 27 May 2008, http://news.bbc.co.uk/1/hi/sci/tech/7421879.stm

5. Ho MW. Close-up on nuclear safety. Science in Society 40 (to appear).

6. Ho MW. The nuclear black hole. Science in Society 40 (to appear).


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