January 10, 2008
UK Government Decides For New Nuclear Power Plants

The British government has been signaling for months that it would probably shift to a more supportive position toward the construction of new nuclear power plants. Well, that shift is now official. More nukes for Britain.

A looming energy crisis caused by unstable supplies of gas and oil has forced the Government to back nuclear which will also help meet global climate change targets.

The French-owned company EDF announced their plans to build four power stations in Britain - the first by 2017 - immediately after Business and Industry Secretary John Hutton told MPs that nuclear would give Britain "safe and affordable" energy.

The German power company, E.On, formerly Powergen, the British Gas parent Centrica and RWE npower, Britain's largest electricity supplier, also expressed interest in building nuclear stations at a likely cost of 2.8 billion apiece.

I do not believe the biggest motivation for this decision was the fear of global warming, though that played a part. The decline in North Sea oil and natural gas production has turned Britain into a big and growing importer of fossil fuels. The fossil fuels imports contribute to a growing trade deficit. European OECD natural gas production might peak in 2008. Worse, Russia is the major external source of natural gas for Europe and Russian oil and natural gas fields look like they are approaching production peaks as well. Look for prices to rise and the savings to be had from shifting to nuclear power to grow as well. Plus, dependence on Russia for natural gas makes Britain vulnerable to Russian diplomatic pressure. Not a good place to be. So nuclear power is the road to reduced economic and political vulnerability.

The British government has also recently opted for a large build of offshore wind towers. With these two announcements the Brits have opted for the two biggest realistic energy options they have available for domestic energy production. Wave energy is still a research project. Solar is too expensive, especially for a country as far north and overcast as Britain. So playing both the wind and nuclear cards makes sense.

Britain needs to build new capacity to replace old nuclear power plants that are headed for retirement.

The UK's 19 nuclear power stations supply a fifth of the country's electricity, but all except one are due to close by 2023. Replacing them with new nuclear build would fill the electricity shortfall and limit greenhouse gas emissions - and the government has committed to a 60 per cent cut in carbon dioxide emissions by 2050.

The UK Department of Trade and Industry (now the Department for Business, Enterprise and Regulatory Reform) projects a competitive cost for new nuclear power plants.

The central case cost of new nuclear power generation is assumed to be around 38 / MWh. The main cost drivers are construction and financing costs, giving an assumed capital cost of 25 / MWh; this is significantly higher than the capital cost for the project currently under implementation to add a new nuclear plant in Finland. Other categories of cost are small in comparison: fuel costs are around 4 / MWh, and Operation and Maintenance costs are roughly 8 / MWh. Back end costs (decommissioning and waste management), whilst potentially of a large order of magnitude far into the future, would need only a relatively small annual contribution over time to ensure that the required amount is available. No decisions have been taken on the specific mechanism required.

We can translate that 38/MWh into US currency. Assume 2 dollars per British pound. That would work out to $76/MWH or 7.6 cents per kwh. Well, the average national retail price of electricity is 10.65 cents per kwh. The delivery costs will up that 7.6 cents price to something slightly above the US average, but without coal pollution. In some areas (e.g. California and New England) the cost of electricity is much higher. In areas with lots of coal or hydro power it is lower.

If you want to read the supporting documents for the British government announcement then start here.

Back 5 years ago in early 2003 Britain's top science academy called for a resumption of new nuclear power plant construction as necessary for the environment.

The UK will be unable to cut greenhouse gas emissions without new nuclear power stations, the country's top science academy has warned.

The Royal Society has urged the government to show "political courage" in its forthcoming White Paper on energy, and make a clear decision on the future of nuclear power.

The scientists saw the obvious: Take away fossil fuels and the list of alternatives in Britain is pretty short.

Share |      Randall Parker, 2008 January 10 10:30 PM  Energy Nuclear

Wolf-Dog said at January 11, 2008 6:55 AM:

"The French-owned company EDF announced their plans to build four power stations in Britain - the first by 2017 "

This is simply too little too late.

Brock said at January 11, 2008 8:40 AM:

Agreed re: true incentives here; but 2017?? Why on earth will it take so long to break ground? Or is that the completion date? Still too long. And they're going to need a lot more than four plants to off-set the North Sea production fall offs if they don't want to be Putin's puppet-state for the foreseeable future.

Fellow Future-Pundit Readers: Is there anyone who can make an informed guess on how long it would take to build a modern (say Gen 2) nuclear plant if there were no regulatory hurdles?

Wolf-Dog said at January 11, 2008 8:55 AM:

Modern Pressurized Water Reactors take about 2 to 3 years to finish, but this is because the nuclear construction industry is dormant these days: if the nuclear economy is revived and organized, the building time can be less than 2 years. However, IF the Pebble Bed Reactors are developed, their construction can be much shorter than a year, because there is simply NO core in the Pebble Bed Reactor, just a funnel shaped silo stores the spheres.

The more modern Integral Fast Reactors (4th generation) must be developed in the future also. These reactors would internally recycle the nuclear waste and burn all of the long term waste as its own fuel, meaning that between 60 to 100 times less uranium fuel would be needed, and the only remaining waste is the low level waste, which has a half-life of only 200-300 years. But none of the new reactors will be developed without government money. Only 10 % of the money already wasted in Iraq would be enough to get the development done.

Fat Man said at January 14, 2008 9:28 PM:

"We can translate that 38/MWh into US currency. Assume 2 dollars per British pound. That would work out to $78/MWH or 7.8 cents per kwh."

2 * 38 = 76, most of the time, anyway. :-)

The cost comparison between US retail and these numbers only holds if they are both retail.

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