A minister crying in the wilderness
We live not just in interesting but incredible times. The Ukraine remains a threat to oil and gas supplies. The fragmentation of Iraq (and Syria) by a murderously fanatical Islamic agent known as ISIS has already raised the price of petrol and put global oil supplies at risk.
The economic recovery seems to be well established and energy demand is rising with greater activity and an immigrant-swollen population.
The European Commission is still trying to decide whether or not the proposed UK Government/EdF deal on building a major nuclear power station at Hinkley Point amounts to unfair competition. At the same time Germany goes ahead unhindered with a whole string of new coal-fired power stations, currently the cheapest generating option but the last thing Europe needs if it is to reduce CO2 emissions.
Yet time is running out for the operation of old coal-fired power stations in the UK under the terms of the EU’s carbon emissions reduction regime. And so, while Germany rescues itself, the UK’s reserve generating capacity becomes vanishingly small – down to a mere two per cent next winter but one.
Yet what did Energy Secretary Ed Davey say on June 10? Why, just this: “The lights are going to stay on”. Whether he is a natural optimist, chronically foolhardy, desperate or seeking to ensure he disappears from the Coalition if the lights do go out is not clear. But his unqualified response to circumstances was not that of a cautious man.
The truth is perhaps that energy policy is in such an unholy mess that all you can do in government is to pray hard and reassure yourself at every opportunity that all will be right on the cold night. We hope Ministers do not rue the day their predecessors did not steadily replicate Sizewell B PWR nuclear power station from 1995.
Our filthy lucre antidote to cuts
The occasion for Ed Davey’s promise against the odds was the harsh real world confronting the National Grid and power consumers. With coal-fired power stations closing, the construction of dearer gas-fired plants on hold, nuclear power’s development lost in a bureaucratic maze and, incredibly, wind power apparently drifting ever more expensively and unreliably offshore, the chaps responsible for supplying us with what electricity is available were called upon to demonstrate their ingenuity.
They employed as their agent filthy lucre. Perhaps more importantly, our filthy lucre. Yes, we the consumers (who have already been taken to the cleaners with renewable forms of energy) are, if we want the lights to stay on, going to have to find the cash for the following cunning plans:
- factories volunteering to shut down during peak demand to keep homes lit and warm; they will be paid both for enlisting and then for having to forgo any electricity
- inducing those who have mothballed gas power plants to get them in working order so they can be called up as required.
- importing more power from the Continent, assuming France has any left after helping Germany overcome the consequences of its going an expensive bundle on wind and solar power.
Industry waves admonitory finger
Earlier it had been reported that all and sundry were being recruited to
provide stand by power – inevitably fossil fuelled – in the old quarries of
the nation, or wherever it was permissible to site generators. The reward for
the off chance use of their generating capacity would, we were told, be six
times the wholesale price – say £300MWh.
Ed Davey insists that all this is cheaper than building new power stations. Well, it cannot be much dearer if by that you mean erecting wind turbines in view of their need for gas back up to overcome their unreliability. This is not to mention extensive and expensive connection with the grid, which is reported to be well behind demand for link-up in Scotland.
This is what the Energy Intensive Users’ Group said about the ideas for balancing peak demand in winter. While its members would do all they could to help, it magisterially waved this admonitory finger at the powers that be:
“The reason we are facing this situation is because of the flawed energy policy followed by successive governments, overly focused on costly intermittent renewables like wind and solar, which are inherently incapable of providing secure electricity supplies. The Government has realised the urgent need to enable investment in generating capacity from nuclear and gas-fired power stations but slow progress means this investment will arrive later than needed, leaving customers at unacceptable risk of price spikes and blackouts and jeopardising investment in manufacturing industries needed to sustain the economic recovery”
Policy on a wing and a prayer
Whether we like it or not, energy policy is now flying on a wing and a prayer. The cost is excruciating and entirely unnecessary – or would be if our politicians had not been infected in the 1990s with blind environmentalism and its concomitant hatred of nuclear power. This is the sort of nonsense that destroys faith in politicians.
There is not much faith left. There will be even less if the lights go out. And the risks will increase the more wind and solar are brought on to the system and the longer it takes to rebuild a reliable supply based on a mix of principally coal, gas, nuclear and hydro.
Britain’s nuclear beehive has them buzzing
This brings us to when – indeed, whether – we shall get new nuclear power
stations. Again we live in an unreal atmosphere. You would not imagine we had
three consortia seeking to build nuclear power stations at Hinkley Point,
Wylfa and Oldbury and near Sellafield as well as another group seeking to burn
up Sellafield’s plutonium store with a fast reactor.
Because of the long drawn out licensing system we hardly ever hear from month to month about this substantial prospective infrastructural development which is entirely in line with the opportunities British industry wants, the UK economy needs and what EU energy policy aims for – the generation of secure, low carbon electricity.
The last we heard about the Government/EdF Hinkley Point deal was on June 9 when The Times revealed that the two were “locked in secret negotiations” over the fee for securing a £10bn Government guarantee for the project. The Treasury apparently considers £225-250m is the very minimum required to keep the EU’s dogs from sniffing anti-competitive practice.
But then we heard, though without much fanfare, that the Government had cleared not only Chinese participation in Hinkley Point but also for China to own and operate Chinese-designed nuclear power stations in the UK, subject to the requirements of the independent regulator. This does not herald early Chinese involvement in the UK – except sometime perhaps at Hinkley Point – but it does confirm that nuclear power plant developers are buzzing around Britain like bees around a hive. Let us not forget that the Russians have their eyes on us, too.
In the normal commercial world this level of international interest in an industrial sector would be a matter of excited comment. The relative silence – apart from the Daily Mail getting the wind up about Chinese industrial espionage – no doubt reflects the nation’s ambivalence, whatever polls, surveys and politicians may say, about nuclear development. As we say, we live in an unreal world.
Another way of looking at China
We do not ignore the reputation that China, rightly or wrongly, has acquired across the world for cyber attacks and industrial espionage. But there is another way of looking at its generation of nuclear power in the UK. Let it never be forgotten that the current level of international interest in the UK is the result of an entirely misguided political abandonment of nuclear power by British politicians over a period of some 20 years. As a result, we are buyers not suppliers in this market.
Second, China operates more nuclear power stations of a more recent vintage than we do. It has just successfully manufactured a steam generator and rector pressure vessel for the AP 1000 reactor to the satisfaction of its owner, Westinghouse. It is moving to the development of a Generation IV demonstration super-critical water-cooled 1000MW reactor for commissioning by 2022 that offers lower capital costs and better use of fuel. And next year it is starting construction of a small modular reactor.
No one can say that China is not seriously in the nuclear business. It follows that, far from pinching our secrets, they may well have a lot to teach us. But there may well be another reason for its (and other foreign) interest in the UK market: if it can get its design past the British regulator, it will be a feather in its international trading cap. We may be a shadow of our former nuclear selves, but we still have our standards.
Admittedly, those standards will not count for much if the lights do go out. This is why, while China, India and Russia forge ahead with nuclear power, we look for ways of reducing demand.
You can certainly save electricity if you turn it off and, according to The Times, Ministers believe demand management could “save power equivalent to that produced by 22 stations by the end of the decade”. This is, of course, entirely meaningless since the output of those stations was not given. But what is worrying for anyone with experience of promoting energy conservation is complacency when there is always a gap between potential and achievement.
Never count your chickens in the energy saving game.
In any economy programme, you need people who will switch off – and stay switched off – for as long as required or contracted. In households the willingness to switch off – and stay switched off – is closely related to comfort, convenience and advantage. Switching off does, of course, contribute nothing to industrial production and economic growth which, as we say, now seems to be healthily established after six years’ effort. Look what a bad winter did to the USA’s first quarter GDP – down 2.9%.
We hope that this country is not knocked back in a future winter for want of a nuclear power station or two providing baseload electricity.
The strange priorities of the IEA
This brings us to an astonishing report from the Paris-based International Energy Agency on June 3. It says the world needs investment worth $48trillion by 2035 to head off a supply crunch. That investment would cost $53trillion if we wanted to hold global warming at 2°C by 2100. Both require “credible policy frameworks and stable access to long term sources of finance”.
It says investment in energy supply needs to rise steadily from $1.6trillion a
year to $2 trillion and annual spending on energy efficiency from $130bn a
year to £560bn by 2035.
There is nothing unusual in all this. We have moved steadily upwards from millions to billions and now trillions. What makes the report astonishing is how it suggests the investment should be made. We have no quarrel with the figure of $23trillion for fossil fuel extraction, transport and refining. We are not going to end the use of fossil fuels for years yet.
But of the $10trillion allotted to new power plant $6 trillion would go to renewables and a miserable $1trillion – if a trillion can ever be miserable – on nuclear. This inevitably reminds us of John McEnroe, the former quarrelsome tennis player, who too often told umpires “You cannot be serious”.
So, we ask whether the IEA is serious. We do so because we have looked at what $1trillion would buy in nuclear hardware. If every station were as expensive as EdFs proposed Hinkley Point plant at, say, $20bn, the world would get precisely 50 new major nuclear power stations by 2035. They would not all be so expensive or so large but the provision of a mere $1trillion compared with $6trillion for renewables sounds as though the IEA has gone barmy. Is it aware of the expansion being proposed in the Far East alone? And does it want to reduce carbon emissions, or doesn’t it?
Bonkers is the only conclusion
The second question is precisely what we must also ask the UK Government. The National Audit Office revealed on June 26 that households face paying an extra £16 on their energy bills because of the £16.6bn subsidies paid to five offshore wind farms and three biomass plants.
The NAO has criticised the Government for awarding the subsidies regardless of how much each specific project cost instead of holding a competitive auction where subsidies were awarded to the lowest cost projects. That is, of course, a legitimate question. But it deals only partly with the issue of value for money.
If the NAO is really concerned about that it should be asking the Government how on earth it can justify offshore wind (price three times wholesale market value of electricity), which is intermittent, unreliable and useless without fossil fuel back up, and biomass (price twice wholesale market value) which does absolutely nothing to reduce carbon emissions.
We think we can conclude without fear of contradiction by the most eminent psychiatrists that on global warming/energy supply the Western half of executive officialdom in not merely stark, staring bonkers but wasteful with it, too.
The rising cost of cleaning up
While we are on big numbers, we should refer to the Nuclear Decommissioning Authority’s upgrading of the cost of cleaning up the UK’s nuclear waste. We used to think it was excessive at £70bn. Now we have just learnt it has topped £110bn after a £6bn increase in the cost estimate covering the next 120 years. Of this Sellafield is expected to take £79.1bn – until the next uprating. Please note the precision.
But this is not, by definition, a precise world. Indeed, the NDA says that after reviewing a number of scenarios the estimated cost could be anywhere from £88bn to £218bn. It would be nice to know broadly the cost of clearing up the military programme and pioneering civil nuclear power as well as the cost of servicing, say, the AGR programme – the current generation of reactors in use in the UK apart from Sizewell B. But there is a more fundamental question: when will decommissioning and waste management costs come down with accumulated experience, expertise and the invention of such things as robots to oil the process?
You may be comforted to know that in discounted terms the £110bn comes down to £65bn. But the case for a National Audit Office efficiency review remains. We ought to be seeing decommissioning and waste management costs falling the more we get into the business.
Professor Glover strikes out
We had not heard of Professor June Glover until at the beginning of the month she gave the European Commission a right old telling off. Now we hope we shall hear more of her – not because she has had a go at the Eurocrats but because of the relevance of her criticisms to the global warming debate.
Prof. Glover was appointed in 2011 to provide the EuroCommission with independent scientific advice. She has just told it bluntly that eurocrats twist the way that scientific evidence is gathered to meet their political imperative. It is exactly the criticism made of the process by which the UN’s Intergovernmental Panel on Climate Change reaches its alarmist view of global warming.
She said that political manoeuvring over evidence had reached into ”countless examples” of EU policy and she found it difficult to disentangle evidence gathering from the “political imperative” behind them. By way of illustration she said:
“Let’s imagine over the week-end a Commissioner thinks ‘Let’s ban the use of credit cards in the EU because credit cards lead to personal debt’. That Commissioner will come in on Monday morning and say to his or her Director General: ‘Find me the evidence that demonstrates that this is the case’ The Commissioner’s staff might resist the idea but in the end they will do exactly what they are asked and find the evidence to show that credit card use leads to personal debt”
Professor Glover also made the point that consulting firms employed to gather evidence “have little incentive to produce evidence that contradicts the Commission’s political agenda. If they want repeat business, they are not going to go out and find the evidence to show that this is a crazy idea”
In other words, Prof Glover thinks there is nothing scientific about current policy formulation. While acknowledging that pollsters have a vested interest, for example, in accurately forecasting a specific election result, we systematically try to establish who has commissioned any poll. It can explain a lot before you even look at the results. .
Greenpeace in a spin
It may not have escaped your notice that Greenpeace, the implacable enemy of nuclear power, is having a bad run. After its irresponsible attempt to disrupt Russian oil operations in the Arctic which landed its ship’s crew in prison, it has been branded a threat to India’s economic security because of its opposition to coal-fired power stations; it has sacked a senior employee after losing £3.8m of public donations in a series of currency dealing blunders; and it has allowed its executive director to commute by plane from Luxembourg to Amsterdam at £200 a time, even though it opposes flying on environmental grounds. Perhaps Greenpeace would have less trouble if it had to make do with SONE’s budget of £8,000 a year.
More nuclear nuggets
Fulfilling our promise to supply members with positive nuclear news, we offer the following nuggets:
- Westinghouse is developing a “specialist option” to its AP-1000 reactor for use in earthquake areas with higher seismic levels.
- All Canada’s 19 commercially operated reactors ran safely last year; its regulator said no worker or member of the public was exposed to radiation above regulatory limits and all releases were within them.
- Hong Kong’s Nuclear Society says its electricity supply will be more reliable and cost-competitive if increasing amounts of nuclear power are imported from China through designated lines.
- The OECD’s Nuclear Energy Agency says uranium mining is one of the most regulated and safest forms of mining in the world.
- Three major economic organisations in Japan have issued an urgent appeal for the Government to accelerate the re-start of nuclear power stations closed after the tsunami disaster at Fukushima; they are concerned about increases in the price of fossil fuel imports hindering economic growth; the early restoration of stable supplies of inexpensive electricity is their most urgent need.
- Rosatom, Russia’s state nuclear corporation, is looking to raise its order book from $73bn to virtually $100bn this year; it expects to bring four new nuclear power stations on line this year – three in Russia and one in India.
Molten salt reactors
A new member of SONE, James Arathoon (email@example.com) would particularly like to meet other members who are interested in the development of fourth generation reactors, particularly molten salt reactors.
We regret to record the deaths of two valued members – Dr Rodney Leach, of Ambleside, Cumbria, and Harry Stopes-Roe, of Moseley, Birmingham.