Thursday, April 24, 2008

Nuclear power

What the nuclear power industry (in Britain) wants, as incentives to build more nuclear power plants. Much of this would probably apply in the U.S., too. I would rather live without the long-term fixed carbon prices (it would increase the average cost of energy) but the others seem potentially doable, if someone (McCain? Obama? Congress?) made it a priority. I especially think long-term supply contracts and licensing/regulatory streamlinging are good ideas. Of course, if we don't do it, someone else will. That someone will also probably be the dominant power of the majority of the 21st century.

Long-term fixed carbon prices

One of the key reasons nuclear power has made a comeback is because of its near-zero carbon emissions. As carbon trading takes off, there has been very little development of the market beyond a few years and the price has tended to be on the low side as well as volatile. Some in the nuclear industry would like to see carbon price out into the future as much as 40 years
and for there to be a fixed floor price, perhaps as high as €40 per tonne.

A permanent underground solution for the long-term storage of nuclear waste

During the mid 1980s, four sites were identified as possible repositories of nuclear waste and then, after a major political row, all were rejected. Since then the interim waste solution has been focused on largely uneconomic reprocessing and high security storage above ground pending an agreed site for geological disposal, 200 to 1,000m below ground.

An easing of planning and consultation constraints

Sizewell B's planning enquiry took a record 340 days. The public enquiry, nearly four years from 1983 - 1985. More recently, in 2007, Greenpeace took the government at its word and successfully challenged the absence of consultation on new nuclear build meaning that the government has to spend even more time consulting as wide as possible. All of this is very expensive and off-putting to nuclear investors, especially by international comparison.

A streamlined licensing approval from the nuclear installations inspectorate of the five available designs

These are: The Framatome ANP EPR, the Evolutionary Power Reactor; The Westinghouse AP1000; The Atomic Energy of Canada ACR-1000; The General Electric Economic Simplified Boiling Water Reactor (ESBWR); The Eskom Pebble Bed Modular Reactor.

The NII is just too small to approve and license all of the nuclear designs in good time and this could delay nuclear a year and a half. To its credit, the government has recognised this, and the January 2008 white paper spoke of a prioritisation exercise. But it should go further. Realistically, the Framatome and Westinghouse are the leading contenders, so it might be a good idea to just to focus on those two first rather than try and approve them all simultaneously. Nevertheless, the 'Generic Design Assessment' is expected to take over three years to complete. So there's plenty of room for improvement there.

The government must issue a long-term financial indemnity for new build

Network Rail, is able to afford an enormous £40bn of investment in the railways over the next few years because the government has backed it with a financial indeminity. This much lowers the cost of debt raised for Network Rail, allowing it to do more with less. A similar scheme for nuclear power stations, which will cost a great deal less at £1.5bn each would dramatically lower the cost of capital and thus entice nuclear investors.

Long-term supply contracts

As the up-front, overnight capital costs are so great for nuclear, investors need to know that there will be customers a long way down the road, as much as 40 years, if they are to recoup their funds with some profits. This principle is clearly accepted in the field of Renewables – the Renewable Obligation currently goes out as far as 2027.

The government may have therefore to oblige public electricity suppliers via Ofgem to – as part of their licence conditions – to buy a certain percentage of their electricity requirements from nuclear generators. That would be a Nuclear Purchasing Obligation, very like the Renewables Obligation.

Interesting reading. Recommended.


"The presentation or 'gift' of the Holy Ghost simply confers upon a man the right to receive at any time, when he is worthy of it and desires it, the power and light of truth of the Holy Ghost, although he may often be left to his own spirit and judgment." --Joseph F. Smith (manual, p. 69)

Be pretty if you are,
Be witty if you can,
But be cheerful if it kills you.

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