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 .
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  (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 , 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
British Energy, the commercial company privatised in 1996, soon ran into serious
financial trouble  (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 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
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,
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
: “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
The flagship Thorp reprocessing plant, built to extract plutonium
and unused uranium from spent nuclear fuel  (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 .
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) , 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 . 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  (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 . 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
 (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.
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
MW. Nuclear renaissance runs aground. Science in Society 40 (to appear).
Energy, Wikipedia, 13 July 2008, http://en.wikipedia.org/wiki/British_Energy
clean-up costs ‘to soar’” David Shukman, BBC News. 27 May 2008, http://news.bbc.co.uk/1/hi/sci/tech/7421879.stm
MW. Close-up on nuclear safety. Science in Society 40 (to appear).
MW. The nuclear black hole. Science in Society 40