Nuclear power has a place in any sound UK energy policy, says British Nuclear Fuels chairman and British Institute of Management companion Sir Christopher Harding.
I work in the nuclear industry. That is a simple and accurate statement of fact. But what does it mean? What is the nuclear industry? Is it comparable with the coal, gas and oil industries, whose products, like ours, all fuel the generation of electricity?
In one very important respect it is not. All of those other fuel industries have their own clear and separate identities. Their products have many applications apart from being burnt to produce electricity. The civil nuclear industry is nothing if it is not harnessed to the supply of electricity. Our raw material, uranium, has no other application but nuclear fission, which is used to produce heat to power steam turbines.
This concentrates the mind wonderfully. There is no future for nuclear power unless it is in demand by the electricity generators. They may be attracted to it because it is economically competitive, because it enlarges the diversity of their energy portfolio and hence the reliability of their system, because it is environment friendly or for a combination of all of these and other reasons.
The key factor in Britain, an energy-rich country, must be economics. To be acceptable, nuclear power does not have to be the very cheapest option here and now. But there must be confidence that it can hold its own in relative economic terms over the whole operating life of a power station, which can be up to 40 years. Only if that confidence exists can the high capital cost of nuclear construction be justified.
During the run-up to electricity privatisation, all nuclear costs came under close scrutiny. The resulting clarification of future costs relating to long-term radioactive waste management and eventual decommissioning of nuclear plant was helpful. What was not helpful was a welter of speculation which developed over other future costs related to nuclear power.
I was dismayed by the ridiculously inflated estimates of the price of each kilowatt-hour of nuclear-generated electricity which were bandied about, based on the most pessimistic assumptions of future construction costs and operating reliability. If the object of that process was to talk down the value of the nuclear assets on the balance sheets of privatised companies, and so enhance future profits, then it was all too successful.
The financial sector was so alarmed by the cost projections that it decided it wanted nothing to do with nuclear power, forcing the Government to withdrw the nuclear stations from privatisation and impose a pause on all future nuclear construction. It will review the case in 1994.
Meanwhile BNFL, supplier of nuclear fuel and fuel services, and the new companies formed to run the nuclear stations in the public sector are committed to the most productive and cost-effective operations to ensure that the value of nuclear power is demonstrated.
BNFL is itself an operator of nuclear power stations. It is currently engaged in a feasibility study on replacing its long-serving Magnox reactors. That study still has some way to go but has already shown that a nuclear station would be fully competitive against a modern coal-fired plant of conventional design. It could not compete on cost with a combined-cycle gas-fired plant, which is currently attractive for electricity generation because of the relatively low construction costs and the availability of low-price natural gas.
The big question is how long gas supplies will be available so cheaply. Large-scale investment in gas-fired plant for electricity generation would inevitably push prices up. Already British Gas has had to put up the price of supplies for new electricity generating projects by some 35% because demand is outstripping supply. British Gas says that the difficulties are only temporary, but some schemes for new power plants have been abandoned as a result. This must raise questions about the wisdom of an over-reliance on gas for electricity generation.
I firmly believe that the economic projections will be sufficiently attractive for a positive answer to the question: "Does Britain need to continue the development of nuclear power as part of a balanced energy policy?"
Our national experience over the past 40 years or so has shown how susceptible to change are energy prices and energy availability. This factor, together with the obvious vulnerability of energy supplies to international unrest and industrial action, underlines the vital importance of maintaining diversity of energy source. Nuclear power is an essential feature of that diversity since its raw material occurs in abundance in stable areas of the world, and there is no reason for its costs to be subject to violent fluctuation.
To maintain nuclear power's share of Britain's electricity output at its present 20% level we shall need to build new reactors to replace the Magnox stations and to cater for an inevitable increase in electricity demand.
Further pressure to step up nuclear power's contribution to our energy supplies is likely to result from growing recognition that it can make a positive contribution to solving major environmental problems now facing our planet. Unlike fossil fuels, nuclear power does not cause acid rain, or contribute to ozone depletion. Above all, it does not produce the carbon dioxide that scientists believe is creating the greenhouse effect.
Contrary to the popular view, nuclear power is the cleanest of our major sources of energy. How long it will take for public perception to fall into line with reality remains to be seen.