Posts Tagged ‘Nuclear Power’

Hinkley C: An alternative response

August 1, 2016

My earlier article on Hinkley Point C received a well-conceived and written response that deserves to be somewhere better than a comment page: here it is:

Hi Michael,
I am no economist either but I will make a few comments on your article about the Hinkley C project. Your conclusion is that overall the project is neither the best thing nor the worst thing could do and therefore sort of Ok. This rather equivocal judgement is made on the basis that the ongoing cost (of £1.15 billion p.a. for 35 years) is probably worth the price because it frees the UK government is from any upfront investment or later costs due to failure or delays. I think this is a very naive view.

This project aims to provide at least 7% of the nation’s power. As far as I am aware the UK government has no Plan B to meet this energy gap. This makes the Hinkley Point C scheme simply “too big to fail”. And if it falters or fails it will be for the UK government to salvage it regardless of contracts agreed at the beginning. The deals will be renegotiated when problems arise and the government / nation needs this power so it cannot just walk away or buy an alternative power station off the shelf.

The situation strikes me as analogous to the Private Finance Initiative (PFI) used to build public sector infrastructure for the last few years. This was sold as a wonderful risk free way of financing new hospitals and schools by using the private sector. Certainly new infrastructure has been built (though often not what was wanted) but at enormous cost which will cripple the public sector for decades. The scheme was devised to avoid government borrowing (even though the costs of this are much lower that for the private sector) but still has to be paid for year in & year out. (It is estimated that the UK owes £222 billion to banks & businesses via the PFI. (The Independent 11 April 2015)

By seeking to avoid public borrowing to finance Hinkley C the government has made a political and ideological choice which reduces it’s control (through lack of ownership), inflates the cost (even if kicked a few decades into the future) and does nothing to reduce the risks (because the government / nation really needs this energy so has no choice but to stick with it).

Best Wishes
Charlie

PS
It is also the case that the UK government has explicitly underwritten £2 billion of costs through the Treasury’s (infrastructure) Guarantee Scheme. This was announced by George Osbourne on a visit to China in September 2015 as an incentive to get the Chinese to invest in the project. EDF itself, in its own press release on the deal refers to “further amounts [being] potentially available in the longer-term.” So there is real chance that the UK government will increase the amount of the project it will explicitly underwrite.

I basically agree with everything you are saying. And if I had had the time I might already have written some of it myself.

However the point of the article was that in narrowly financial terms, this deal isn’t as insane as it is being made to sound.

Concerning Plans A and B, here are some other thoughts.

  • If we want nuclear power, then the current EDF design is one of the very few options available. The real missed opportunity here is that the decision to build was delayed so long that the option for using UK technology was lost.
  • Like you, I find the government’s aversion towards state ownership bizarre. How can it be OK for foreign governments to own our infrastructure, but not the UK government? That is just bonkers. As you say, if this is critical infrastructure then the owners of the infrastructure – the Chinese and French governments – will be able to hold us to ransom in the future.
  • Assuming the project goes ahead, then – taking a positive view – the government will have freed up the capital resources to invest in what I think is the real challenge facing us: integrating energy storage into our generating mix. But that is a story for another evening.

Thanks for your thoughts.

Michael

==============================

[August 1st  2016: Weight this morning 73.4 kg: Anxiety: Very High]

The Nuclear Issue in Germany

May 30, 2011
A German Anti-Nuclear Protester

A German Anti-Nuclear Protester

I was astounded to hear this morning that the coalition government in Germany has decided to abandon generation of electricity using nuclear power, choosing to close all nuclear power plants by 2022. My first reaction was ‘They have gone bonkers!’ but through the day I have let news percolate in my mind and as I write this at 10:15 p.m. I am really not all sure – but I will be very interested to find out.  I will write more about this in future – I would particularly like to compare the breakdown of generation in the UK and Germany – but for now let me just compare and contrast the conventional economic view; the German approach; the UK approach. And finally, I will say what I would do if I ruled the UK :-).

This decision has not been driven by economics. The ‘economic’ way to generate electricity is to burn coal and gas, of which there is plenty available – perhaps more than we thought. The energy density is high and the technology is well understood. The downsides to burning fossil fuels and getting the cheapest electricity possible are that:

  • The fuels emit carbon dioxide – and we are burning them in ever increasing quantities. In all likelihood, this will create problems in coming decades on a scale too large to fully appreciate.
  • The fuels are not sustainable – and eventually we will need to find alternatives.

However, all the alternatives are more expensive. The ‘economic’ solution is to wait until the price of fossil fuels rises to the point that sustainable energy generation is cheaper, and then the market will drive the growth of sustainable electricity generation. An alternative would be to estimate the (frankly) un-estimatable damage caused by carbon dioxide emissions and add this to the costs of fossil fuel generation through a carbon tax. But the uncertainties are so great that the correct ‘economic’ level of the tax is really nothing more than a guess.

The German approach is driven by politics: the Greens won’t support the government unless it stops nuclear electricity generation. The Green view appears to be that nuclear power – in and of itself – is bad, and that rising carbon dioxide emissions are a price worth paying. This view appears to have widespread support in Germany, and although I sympathise, I basically disagree. The most bizarre element of the agreement appears to be a plan  to  engineer a 10% cut in electricity use. How? Well this might be achieved by a massiveprice increase or by ‘rationing’. ‘Rationing’ might involve legislation to ban shop lighting after a certain hour, or street lighting, or specifying that electricity usage above a certain level is anti-social and to be charged for punitively. From a UK perspective, any of these options looks extremely unrealistic, which just adds up to higher carbon dioxide emissions.

The UK approach is also driven by politics: basically no politician wants to take any responsibility for actually making a decision. The strategy is to ‘let the market decide’. If this is genuinely the policy – and I find it hard to tell if this is just a front – then no matter what the Government say, new nuclear power stations will not be built be in the UK because following Fukushima they will be uninsurable. If in fact the plan is to subtly subsidise nuclear power – which I suspect is the case – perhaps by setting a limit to liability, then we may have nuclear power. But we have no plans to reduce electricity usage – in fact quite the opposite. We subsidise renewable energy generation, but the amount of renewable energy generated is still – frankly – negligible, and plans for its growth still seem tentative.

My view is… that ‘the electricity market’ is not a genuine market and that it is unlikely provide appropriate solutions for the UK. In particular,  the market has no obligation to act in the best interests of the UK – particularly not over the timescale of decades that building electricity infrastructure requires. If investing £1billion in Indonesia will make a company more money than in the UK, then they will not bother to invest in the UK. It’s not that the company is evil, it’s that that’s just business. So the UK ends up competing to offer the best return on investment to companies – instead of companies competing to offer the best value to the UK. Personally I think that the electricity infrastructure, like the road infrastructure or the rail infrastructure, is best planned by a single entity with public representation. Come back CEGB – all is forgiven.

The Nature of Nuclear News

March 28, 2011
Warning symbols for radiation hazard

Warning symbols for radiation hazard. Please see the note at the end regarding the use of the 'scary' warning.

It’s been two weeks since the terrible earthquake and tsunami in Japan, and it seems like the death toll may exceed a staggering 20,000. Estimates of the reconstruction costs vary widely, but are certainly many trillions of yen, equivalent  to hundreds of billions of US dollars. The human and cultural cost is incalculable. And when I turn my mind to reflect on these events, I am numbed: I cannot conceive of it even though I know it was real.

But in the face of this disaster, the last two weeks has been filled with stories – apocalyptic in tone – about the damaged nuclear power stations at Fukushima. How can it be that in the face of this real disaster – the tsunami – that news organisations can focus on a nuclear incident in which no one has died and in which no one is likely to die? An event in which, sadly, two people have been hurt, but which in all probability will cause no physical harm to any member of the public anywhere – in Japan or elsewhere – ever! How does this come about?

Now I am not asking this question rhetorically. And I am not asking it in exasperation. I am asking it because the answer is important.

Firstly, the general problem with reporting of crises is that there is no mileage in being sensible. Overestimating the possible damage is in the interests of the news media because it keeps ‘the story’ going. But surely you ask, can’t someone just calmly explain the range of possible outcomes? Well, No. There is always uncertainty, and in any case it is impossible for anyone to stop a ‘nuclear story’. A politician could never say that the nuclear pollution from Fukushima is not very significant because they would be seen as uncaring. No one from the nuclear industry – i.e. anyone with any special knowledge of the field – could say there was ‘no need to worry’ – the reaction would be immediate panic! And the resultant anxiety – indeed the terror – of ordinary citizens is palpable. The same dynamic affected reporting of the BP pollution crisis in the Gulf of Mexico last year, but without the nuclear ‘spin’.

Secondly, and obviously, matters  nuclear have always had a special fascination. And because of their association with cancer; and with nuclear weapons; and because of their cultural novelty and unfamiliarity; matters nuclear engender fear. This is even more so for Japan, the only nation to suffer a nuclear attack. This is just a fact and there is no use complaining about it. All one can do – to use an English cricket term  – is to ‘play with a straight bat’. It means to just report what’s happening, and to skip the apocalyptic innuendo.

And that brings me to my third point. I think our news organisations have failed us, and I am especially critical of the BBC in this regard because I pay for it and I expect it to be the best in the world. Let’s take a look at the problem

  • Take a look at this BBC report on the measurements of radioactive iodine in a water treatment plant in Tokyo. The reporter calls this ‘ground zero’ – a term referring to the point of impact of a nuclear weapon – and after mentioning ‘the fact’, shows frightened parents searching for bottled water. He implies that matters are getting worse… But he fails to mention that ‘Radioactive Iodine’ refers to Iodine-131 – an isotope of iodine with a half-life of 8 days. The readings of 130 becquerel per litre, is indeed just above the recommended limit of 100 becquerel per litre for children. However, this is the limit for continued consumption for one year. However, because the half-life of iodine is 8 days, the level will fall below the safe level in a few days.
  • The Independent has never been strong on science, but Fear and devastation on the road to Japan’s nuclear disaster zone is just nothing but doom-mongering nonsense.
  • And this BBC story is mischievous. I have reproduced a section of the article below to show how although the article is entirely about the nuclear incident – it slips in a paragraph about the number of dead with the implication that the dead are somehow associated with this nuclear incident. They aren’t – no one has been hurt!

…The plant’s operator says the core of one of the six reactors may have been damaged. It has announced that fresh water rather than seawater will now be used to cool the damaged reactors, in the hope that this will be more effective. Prime Minister Naoto Kan said the situation was “very unpredictable”.

The official death toll from the 11 March earthquake and tsunami has passed 10,000, and more than 17,440 people are missing. Hundreds of thousands of people have been made homeless; an estimated 250,000 people are living in emergency shelters. Food, water and fuel are in short supply. The Japanese government has put the rebuilding cost at $309bn (£191.8bn).

Safety measures The levels of radiation found in the sea near the plant were more than eight times higher than those found in the same area last week, the Japanese officials said. A spokesman for Japan’s Nuclear Safety Agency said the radioactivity level in the sea off the nuclear plant was “relatively high” but the impact on marine life would be minor.

And you will find similar stuff from all the major news organisations. I tried to keep a list, but it’s impossible to keep track.

Is there really nothing to worry about? That is not what I said! There are real reasons to be concerned. But as I mentioned in my previous article, the situation gets easier as time moves on because the amount of heat being generated within each reactor is down from ≈ 1 MW last week to a few hundred kilowatts this week – still a lot of heat – but much more manageable and getting easier day by day. This is a serious incident and lessons will be learned. But despite the explosions at the plant, no one has been hurt, and the reactors are close to a cold shutdown state. There still exists the possibility of mistakes – but to me it looks like  the worst is over. I am ready to be corrected on this, but I want you to know that, even if I get ‘bowled out’ by a strange event, I have been playing with a ‘straight bat’.

And I can’t finish without noting that my heart goes out those suffering in Japan. I tend to donate to the Red Cross in these situations.

NOTE ON THE ‘SCARY’ RADIATION SYMBOL: This symbol is included in ISO 21482:2007. ISO International Standards are protected by copyright and may be purchased from ISO or its members (please visit www.iso.org for more information). The IAEA cites the use of this symbol as: “The symbol is intended for IAEA Category 1, 2 and 3 sources defined as dangerous sources capable of death or serious injury, including food irradiators, teletherapy machines for cancer treatment and industrial radiography units. The symbol is to be placed on the device housing the source, as a warning not to dismantle the device or to get any closer. It will not be visible under normal use, only if someone attempts to disassemble the device. The symbol will not be located on building access doors, transportation packages or containers.”


%d bloggers like this: