Will nuclear energy make a comeback?

By David Gow

LONDON: Is nuclear energy in the United Kingdom poised to make a comeback? The question may seem naive given the hammering the industry in Britain has taken in recent weeks: British Nuclear Fuels'(BNFL) debacle over its Japanese reprocessing contracts; British Energy's (BE) sagging profits and collapsing share price -- and safety worries caused by its staff cuts.

But there are grounds, most paradoxically environmental reasons, why British ministers and the market might view the nuclear option more favorably in years to come and objections to building new power plants may be overcome.

Britain's existing nuclear power plants face decommissioning and closure over the next 20 years, starting soon with the Magnox stations owned and managed by BNFL and moving on, from around 2015, to the AGR (advanced gas-cooled reactor) stations belonging to BE.

A combination of factors has produced a rapprochement between the industry and the green movement. First, the end is in sight for the most blatant cause of objection: reprocessing of spent fuel rods and the toxic waste that leaves.

Japan and Germany want to exit their reprocessing contracts with BNFL, while BE has signaled it wants to rescind its US$450m annual deal with BNFL and switch to dry storage.

Energy experts at the environmental lobby group Friends of the Earth have cautiously welcomed the latter move, with Mark Johnston saying it is "the least worst option" and seeing an end to reprocessing here within the decade, probably much sooner.

Helen Wallace, a scientist at Greenpeace, is more skeptical, arguing, correctly, that BE's policy shift has been determined by cost-cutting.

"Stopping reprocessing would not make nuclear power acceptable to us because it's still producing waste and there's still a risk of accidents. But we think this move is very significant and definitely a move in the right direction."

A second reason for revival of the nuclear option is price. Peter Hollins, BE's chief executive, says the government's drive to bring new players into the industry and reduce the market share of National Power and PowerGen has brought wholesale prices down more steeply than anybody envisaged.

That and the immediate prospect of new trading arrangements based on a commodity market have propelled prices down 15 percent already this year and are likely to push them down further; Hollins had expected a fall of 25 percent would take three years.

In the short run this will not benefit nuclear power but coal, according to Tony Cooper, leader of the Engineers & Managers Association, with some 4,000 members in the nuclear industry.

With its new US$150m government subsidy, the British coal industry is in a better position to compete with alternative fuels such as gas and, though the subsidy means the moratorium on new gas-fired power stations will be lifted, Cooper believes price pressures will inhibit investment in new plant.

The third and most compelling reason for what even Johnston concedes could be "the slim chance of a come-back" for nuclear power is environmental.

Britain is committed by the Kyoto accord to reduce its carbon dioxide emissions by 12.5 percent by 2010 but has opted to raise this to 20 percent. Cooper says all the recent cuts in greenhouse gases from Britain have been caused by the switch from coal to gas and nuclear.

Both Greenpeace and FoE insist that the next leap in reducing greenhouse gases must come from a switch to renewable energy sources and energy efficiency, effectively controlling demand.

Helen Liddell, the British energy minister, wants renewables to provide 10 percent of Britain's energy mix within 10 years but there is considerable skepticism whether this target can be met. "Unless the government can do something about transport it's difficult to see how the rate of CO2 reduction can be maintained without nuclear," Cooper says.

"Not everybody is prepared to stand up and say so but we believe there's an increasing understanding of the role of nuclear in dealing with the greenhouse effect. The only way the UK can meet its Kyoto commitment is because of our increasing output," adds Hollins.

Johnston says gas remains a better option. But he admits that if CO2 emissions continue to hit the roof in, say, five years, nuclear could make a comeback.

Greenpeace wants all existing plants shut and views any suggestion of new ones as an expensive folly. "Not only on environmental grounds is nuclear unacceptable but because it would be investing in old technology which has failed economically," Wallace says.

The industry concedes many of these points. But, says Cooper, there are two factors which could favor a nuclear revival. First, if other forms of generation, notably coal, had to be bear the full cost of environmental impact and a market-driven system came into being, the economics of the nuclear power industry would improve.

Second, nuclear technology is changing so it can become intrinsically safe. "Safety is now based on human and computerized controls but there are designs being worked on in which, if the reactor core started to heat up, the physics of it alone would slow that process and you'd get negative feedback."

-- Guardian News Service