France and the UK are strengthening industry ties in order to build more nuclear power plants. Is this a good deal for the UK economy? And the environment? Jody Clarke reports
Why is nuclear power back on the agenda?
A combination of worries, including energy security and climate change, are feeding the nuclear renaissance. One tonne of nuclear fuel generates energy equivalent to burning approximately 120,000 tonnes of coal, making it an attractive green alternative to the fossil fuel, one of the chief emitters of carbon dioxide.
Meanwhile, the uranium required to power nuclear reactors is plentiful and comes from democratically stable countries, such as Canada and Australia. That’s attractive to Western governments looking to wean themselves off Middle-Eastern oil and Russian gas.
How does the UK plan to profit from nuclear power?
This week’s summit at Arsenal’s Emirates Stadium is expected to strengthen nuclear industry ties between France and Britain. The French are offering their expertise to help Britain build replacement nuclear reactors for our “ageing plants”, says The Daily Telegraph. The idea is that the two countries will then work together to export the resulting technology worldwide.
Currently, around 80% of France’s electricity comes from nuclear power, making French firms world leaders in nuclear production. French engineer Areva already has deals in place to design and build reactors in several countries, including China and the US. So this looks like a good deal for Britain, which is expected to license four of Areva’s reactor designs. These reactors will be used to train a new generation of British workers in how to build and maintain nuclear power plants in a deal that could create as many as 100,000 jobs and be worth as much as £20bn to the UK economy, said Business Secretary John Hutton this week.
And the Government is also looking to sell its 35% stake in British Energy (BGY), the main operator of nuclear power stations in Britain. This is expected to add at least £2bn to the Government’s coffers.
Why would anybody want to buy British Energy?
Good question, given the electricity firm’s long history of financial problems. In 2002, the Government was forced to bail it out with £5.3bn of emergency funding, while a capital restructuring in 2005 almost wiped out its entire equity value. And with all but one of its nuclear reactors expected to close by 2023, it’s not going to make a buyer any money in the immediate future.
However, the nuclear renaissance is good news for British Energy, as it currently operates eight of the ten reactors in the UK. And because the Government has hinted that new nuclear plants will be built on existing sites, British Energy is a clear winner. It has already shortlisted four existing sites in Bradwell, Dungeness, Sizewell and Hinkley for the next generation of plants. French power giant EDF and Britain’s Centrica are both circling, with the latter reportedly mulling over a £10bn offer for a company with a current market value of £6.4bn.
Are there any alternatives to nuclear power?
Probably not. The UK may, as the British Wind Energy Association argues, have “40% of Europe’s entire wind resource”. But nuclear power offers a more reliable supply. Once up and running, nuclear plants can generate electricity 85%-95% of the time, says New Energy Finance. Wind generators make power just 25%-30% of the time. And while it can take up to seven years to build a reactor, as was the case with Suffolk’s Sizewell B, in the long run they are no more expensive than wind farms to operate.
It costs between $1.2m and $2.5m to finance each megawatt of electricity from a nuclear plant, says New Energy Finance. Wind generators cost between $1.5m and $2m. And because it costs about a third as much to fuel a nuclear power plant in the OECD league of rich nations than to fuel a coal-fired plant, the Government favours investing more money in the construction of reactors.
But is nuclear power a magic bullet for climate change?
No. It’s true that with 80% of its electricity provided by nuclear power, France has the second-lowest CO2 emissions per head in Europe. But “the idea of selling nuclear power around the world as a solution to climate change is just nonsense”, says Friends of the Earth nuclear campaigner Neil Crumpton. Britain has pledged to cut carbon emissions 20% by 2012. But given the long build time on reactors, no new ones will be ready by then.
More to the point, even if they were, China’s contribution to CO2 emissions alone means tackling climate change will take a lot more than anything Britain can do alone. China is expected to have 60 gigawatts of nuclear power capacity installed by 2020, according to an official speaking to China’s Xinhua news agency. But that’s still less than 10% of total energy demand in the country – most of the rest of which will be supplied by coal.