Select Committee on Environmental Audit Appendices to the Minutes of Evidence


APPENDIX 6

Memorandum from British Nuclear Fuel Limited (BNFL)

  1.  We welcome this opportunity to contribute to the Environmental Audit Committee's study of a sustainable energy strategy, particularly in light of the publication of the Performance and Innovation Unit's Energy Report. We support the PIU's recommendation that there should be a debate into future energy policy, including the contribution to be made by nuclear energy.

  2.  It is essential that we move to a sustainable energy strategy. Nuclear energy can help contribute to that strategy by supplying electricity from a source that has almost no greenhouse gas emissions, its waste is safely managed and the cost of this is paid for in its generation price. Nuclear power plants supply electricity reliably and affordably whilst promoting security of supply by reducing our dependence on fossil fuels.

  3.  To ensure that nuclear energy can continue to contribute to a diverse and sustainable energy supply we recommend that:

    —  Nuclear energy is recognised by the Government as an important component of a sustainable energy strategy.

    —  Economic mechanisms addressing climate change, such as carbon taxes and emissions trading, should be structured to give credit to nuclear generation as it emits almost no greenhouse gases.

    —  Government should continue to promote new renewables, but as part of an overall energy strategy to meet sustainable development goals.

    —  The planning and regulatory approval process should be improved to allow decisions to be taken more efficiently on nationally important infrastructure projects, such as new nuclear power stations.

    —  Government should encourage nuclear education, training and R&D to maintain the skills necessary to maintain a vibrant nuclear industry.

    —  Government should develop a clear policy and strategy for nuclear waste as quickly as practicable.

THE CONTRIBUTION OF NUCLEAR ENERGY TO SUSTAINABLE DEVELOPMENT

  4.  The way in which electricity is generated in the UK is currently incompatible with the long-term objectives of sustainable development. The greenhouse gas emissions from fossil fuel generation form a major part of the UK's contribution to climate change, potentially the most serious threat to the environment in the 21st century.

  5.  Nuclear energy and renewable energy sources can generate electricity with almost no greenhouse gas emissions. However, it is unlikely that either nuclear power or renewables will be able to supply all the UK's future electricity demand. Nuclear power is best suited to meeting baseload electricity demand whilst many renewables provide electricity intermittently. Therefore both nuclear energy and renewables will be needed to make the necessary reductions in greenhouse gas emissions. The current share of electricity supplied by nuclear generation should, at least, be maintained and the expanding share of electricity generated from renewable sources should be used to displace fossil fuel generation, to maximise the greenhouse gas emissions reductions.

  6.  The provision of reliable and affordable supplies of electricity from sources that will not harm the environment is an essential element of sustainable development. Interruptions to electricity supplies seriously inconvenience domestic users and harm the competitiveness of business.

  7.  Nuclear generation can make a positive contribution to sustainable development. One of its key characteristics is that it supplies electricity with almost no greenhouse gas emissions. Globally, nuclear energy helps avoid the emissions of nearly two billion tonnes of carbon dioxide each year. In the UK the emissions avoided through the use of nuclear energy are equivalent to more than half of the emissions from road transport.

  8.  The environmental impacts of nuclear energy are very low. The waste products that are produced in the nuclear fuel cycle are of a relatively small volume. They are captured, thereby isolating them from the environment and are being safely treated and stored for eventual final disposal. A study carried out by ExternE concluded that the level of environmental externalities associated with nuclear generation were comparable to those of generation from wind turbines, and very much lower than those associated with fossil fuels.

  9.  Technical solutions to the treatment and disposal of nuclear wastes exist. The challenge now is to implement those solutions. In Europe and the US progress is being made. We would encourage the Government to develop a clear strategy for nuclear waste disposal.

  10.  New reactor designs would produce much less waste, only around 10 per cent of that produced by the UK's existing nuclear power stations.

  11.  BNFL is investing in new reactor designs that are bringing down the cost of new nuclear build, whilst incorporating improved safety features. The projected generation cost of between 2.2 p/kWh and 3 p/kWh includes provisions for the treatment and eventual disposal of waste and the decommissioning of plant. These generation costs are amongst the most affordable of the low-carbon generation options and could be competitive with fossil fuel options if those technologies were required to internalise the cost of their greenhouse gas emissions.

  12.  Nuclear generation also helps promote security of supply by reducing our reliance on imports of fossil fuels. By maintaining a vibrant nuclear industry in the UK we will have more options open should we need to adapt our energy strategy in the longer term, should fossil fuels become more expensive or less easily accessible.

ECONOMIC MECHANISMS ADDRESSING CLIMATE CHANGE, SUCH AS CARBON TAXES AND EMISSIONS TRADING, SHOULD BE STRUCTURED TO GIVE CREDIT TO NUCLEAR GENERATION AS IT EMITS ALMOST NO GREENHOUSE GASES

  13.  The price charged for nuclear generation in the UK include the costs of treating and storing waste arising from the nuclear fuel cycle, as well as making provisions to pay for final disposal waste. Nuclear generation costs also include provisions for the decommissioning of nuclear plant. In sharp contrast fossil fuel generators are allowed to emit greenhouse gases freely into the atmosphere without penalty. The impact of those greenhouse gases on the environment is an example of an external cost which at present is not included in the generation costs of fossil fuels.

  14.  Giving credit for the contribution made by nuclear power in avoiding greenhouse gas emissions by fully recognising their contribution in climate change policies such as carbon taxes and emissions trading will allow all generation types to compete on a more equal basis.

  15.  The Government has recognised the need to reduce greenhouse gas emissions and has introduced policies to achieve this goal. However, policies introduced so far, such as the climate change levy and the UK emissions trading scheme, do not give due credit to nuclear generation.

  16.  The climate change levy is, in essence, an energy tax on the business sector. The levy makes no distinction between fossil fuel generation and nuclear generation. There are exemptions from the levy for renewables and some CHP. These exemptions are welcome as part of a climate change strategy but further highlight how credit is not being given to nuclear generation.

  17.  The Government's emissions trading scheme does not include the direct participation of generators. There are good reasons why generators have not been involved at this early stage. However, in the longer term emissions trading schemes should involve generators, especially when cap and trade schemes are established on a European or global scale. The generation sector is a major source of greenhouse gas emissions and the reductions in emissions in the UK from generators over the last 10 years shows there is a great potential for further reductions.

  18.  However, the carbon reductions gained through nuclear generation in the UK will be lost as most of the existing reactors close over the next 20 years. Unless those reactors are replaced with low-carbon electricity greenhouse gas emissions will rise. The direct involvement of the electricity generation section in an emissions trading scheme would encourage the construction of low-carbon generation, whether nuclear, renewables or fossil fuels with carbon sequestration.

GOVERNMENT SHOULD CONTINUE TO PROMOTE NEW RENEWABLES, BUT AS PART OF AN OVERALL ENERGY STRATEGY TO MEET SUSTAINABLE DEVELOPMENT GOALS

  19.  In responding to the PIU Energy Review the Chairman of the Environmental Audit Committee stated that:

    "The PIU report was intended to respond to the Royal Commission on Environmental Pollution, which called last year for a 60 per cent cut in emissions by 2050 to avoid irreversible Climate Change. It was meant to set out where the UK should be in 2050 and how we should get there. I find it disappointing that the PIU have stepped back from this strategic aim and fail to set out how aims and targets are to be achieved."

  20.  We support the Chairman's comments on the need for a long-term view on how the UK will achieve the full reduction in greenhouse gas emissions required to stabilise atmospheric greenhouse gas concentrations. We hope the forthcoming Energy White Paper will address these issues. In the electricity generation sector plant and infrastructure can have an operating lifetime of many decades. New plant built over the next 20 years may still be operating in 2050. Therefore policies and instruments introduced to address the electricity sector over the next two decades will have an influence on the generation mix for a much longer period.

  21.  At present the renewables obligation and the CHP target are focused on the shorter term. The objectives of these mechanisms to help establish renewable energy and CHP as significant contributors to the UK's electricity generation is, in principle, welcome as it is intended to enhance diversity of supply and help reduce greenhouse gas emissions.

  22.  However, energy policy will be more able to ensure environmental protection and economic efficiency if it addresses all generation options. As the current generation of nuclear and other power plant is retired there will be a growing demand for new generation capacity coupled with the need to further reduce greenhouse gas emissions.

  23.  In order to meet the needs of sustainable development electricity supplies must protect the environment and be affordable and reliable. BNFL is confident that new nuclear power stations are amongst the most cost-effective options for new build, especially when all externalities are considered. There should be an on-going review of options to reduce greenhouse gas emissions to ascertain what generation technologies will be most effective in delivering greenhouse gas emissions affordably.

  24.  The PIU report records that there have been no new nuclear plants built in liberalised electricity markets. In fact in the liberalised UK market there has been no construction of any new baseload generation plant. The Trade and Industry Select Committee study into Security of Supply notes that:

    "We have not yet heard any evidence that leads us to believe that the market is sufficiently far-sighted to guarantee enough reserve generating capacity."

  25.  To ensure secure and reliable supplies of electricity new baseload generation will be needed. There should be a review how long-term supply contracts—which are required by any baseload generation—can be put in place.

  26.  A significant proportion of that baseload generation should be based on nuclear power to minimise greenhouse gas emissions and increase security of supply. The House of Lords Select Committee on the European Union's report on Energy: Security of Supply recommended that:

    ". . . the Government should maintain the United Kingdom's present ability to produce no less than 20 per cent of United Kingdom electricity demand from nuclear power Generation."

  27.  Such a target should operate in tandem with efforts to increase generation from renewables. The PIU Review's target of increasing renewable generation to 20 per cent by 2020 would be matched by a similar reduction in generation from nuclear energy as Magnox and AGR reactors are retired. Without replacement nuclear build this would result in no net reduction in greenhouse gas emissions. New renewable generation should be used to displace fossil generation, thereby reducing greenhouse gas emissions whilst the contribution made to UK electricity supply from nuclear energy should, at least, be maintained.

THE PLANNING AND REGULATORY APPROVAL PROCESS SHOULD BE IMPROVED TO ALLOW DECISIONS TO BE TAKEN MORE EFFICIENTLY ON NATIONALLY IMPORTANT INFRASTRUCTURE PROJECTS, SUCH AS NEW NUCLEAR POWER STATIONS

  28.  The Government is reviewing the planning process having recognised that the current planning process for large infrastructure projects is leading to unnecessary delays and uncertainty, which damage competitiveness. To be competitive the lead time before a new nuclear reactor enters operation should be as short as practicable.

  29.  The planning and regulatory approval process should provide an opportunity for a relevant and focused debate with the elimination of repetitious arguments. It should not hinder the right decision being taken.

GOVERNMENT ENCOURAGES THE PROVISION OF NUCLEAR EDUCATION, TRAINING AND R&D TO MAINTAIN THE SKILLS NECESSARY TO MAINTAIN A VIBRANT NUCLEAR INDUSTRY

  30.  The PIU report recommended keeping the nuclear option open. It is important to understand what this entails and how it can contribute positively to sustainable development. If the UK is going to be able to benefit from a new generation of nuclear reactors decisions on how to provide the skills for such an industry need to be taken in the immediate future.

  31.  It is important that the UK nuclear industry can continue to draw upon well trained graduates. This includes graduates with specialist training in nuclear disciplines. There is also a need to maintain an R&D capability both within the industry and also in partnership with universities.

  32.  By maintaining and developing a skill base for the future the nuclear industry can continue to provide valuable employment opportunities to thousands of people in the UK.

GOVERNMENT SHOULD DEVELOP A CLEAR POLICY AND STRATEGY FOR NUCLEAR WASTE AS QUICKLY AS PRACTICABLE

  33.  As previously described, wastes from the UK's nuclear industry are safely stored and managed. Furthermore technical solutions for the long-term management and final disposal of nuclear wastes exist. However, the UK currently lacks a clear policy and strategy for nuclear wastes.

  34.  A clear policy and strategy are needed to confirm that nuclear wastes can be safely dealt with. A clear direction on the long-term management of nuclear wastes will also help the nuclear industry more effectively manage its waste in the short- to medium-term.

  35.  The Government has launched a debate on the future strategy for nuclear waste with a consultation paper "Managing Nuclear Waste Safely". This is an important debate and, to be effective, it should lead to the development of a clear policy for nuclear waste.

March 2002



 
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