Mirage and oasis

Nuclear power is back in fashion, touted as a pain-free solution to climate change and looming energy shortages. But do its claims really add up? A new report commissioned by the Ashden Awards casts some deep shadows over nuclear’s prospects – while shedding light on the case for renewables. Author Andrew Simms sums up its findings.

Nuclear power has been promoted as the answer to both climate change and energy insecurity. It is neither. As a response to global warming, it is too slow, too expensive and too limited. And in an age of terrorist threats, it is more of a security risk than a solution. Our research for the Ashden Awards finds no substance in claims that it has an increased role to play in a flexible, safe, secure and climate-friendly energy supply system. These, in fact, are the characteristics of renewable energy, which is abundant and cheap to harvest both in the UK and globally. Successive investigations by government and parliament have come to similar conclusions. The government is committed to ‘evidence-based policy’. This should rule out a nuclear revival, since, even on the limited criteria of cost and security, nuclear loses out to renewables. Add in other criteria to an assessment of energy choices, and such a decision is reinforced. Whether it’s on the issue of toxic waste, the speed with which new supplies can be brought on stream, the flexibility of the technologies, or the question of, pound for pound, how many jobs are created – in each case, renewables beat nuclear hands down. Why we need renewables now There are three major reasons why a rapid uptake of renewable energy is now vital for the UK. First, climate change means we need to drastically reduce our reliance on fossil fuels. Under the Kyoto Protocol, we’re already committed to reducing greenhouse gas emissions by 12.5% by 2010, compared with 1990 levels. Acting independently, the government has also committed itself to a 20% reduction in CO2 emissions by 2010, and a further 60% cut by 2050. Without a massive increase in renewables (and a major improvement in energy efficiency), these latter targets will be impossible to meet. Secondly, one of the greatest unacknowledged threats to the UK economy is the imminent peak of global oil production, which is set to send already high oil prices much higher still, creating a severe economic shock of large but unpredictable proportions. Thirdly, Britain’s current stock of nuclear power stations is ageing, and will progressively close over the coming two decades. Some argue that renewables alone could never fill the looming ‘energy gap’ (created in part by the nuclear shut down). But our research shows that a broad combination of renewable sources, tapped into with a range of micro, small, medium and larger scale technologies, and flexibly applied, could more than meet all our needs. Better still, such an approach has the ability to create new access to power supplies for millions of people around the world who currently lack such basics as household lighting, or the ability to cook without inhaling lethal smoke. Potential energy
Renewables’ potential has been well charted, yet is often still underestimated. Wave power could realistically meet 15% of UK electricity demand, and tidal power an additional 6.5%. Then there’s wind. With 40% of the total available wind energy resources in Europe, the UK has theoretically enough to meet its electricity needs eight times over. Indeed, new research from Stanford University in the US shows that low-cost wind energy is much more widely available than previously thought, and alone could generate more than enough power to satisfy the world’s energy demand.

“With 40% of Europe’s total available wind energy resources, the UK has theoretically enough to meet its electricity needs eight times over.”

Even given the current limiting structure of the national grid system, and the fluctuating nature of demand, a combination of offshore and onshore wind could provide up to 35% of the UK’s electricity. Which makes the government’s target of generating 20% of electricity needs through renewables by 2020 more than achievable. The great majority of this would come from wind power. But can public opposition be overcome? One man who spent 30 years building and installing nuclear, coal, gas and other power stations before moving to wind thinks so. Allan Moore is now chair of the British Wind Energy Association and head of renewables at National Wind Power. He argues that the current debate lacks a sense of proportion. “In the 17th century, we had 90,000 windmills in Britain. They were a part of life. What we’re looking to do now is install perhaps 4,000 turbines, making 5,000 in total. Roughly half will be onshore and half offshore. If 4,000 turbines sounds a lot, compare this to Germany, where last year alone they installed more than 2,500MW of capacity, and now have 7,000 turbines.” While the public debates rage around the visual impact of large wind farms, the potential contribution of renewable energy from microgeneration – small-scale, localised power – has been largely overlooked. Thomas Edison had such sources in mind when he built the world’s first power plant, Pearl Street Station, in New York in 1882. He had a vision of a decentralised energy industry with dozens of companies generating and delivering power close to where it was to be used, and even putting systems in factories and people’s homes. In 1907, 59% of American electricity came from small-scale generation. Merely hinting at the UK potential for microgeneration, there are claims that new innovations in domestic-level wind generators might affordably provide up to 80% of a household’s electricity demand. At the same time, solar thermal units can meet around half of a household’s annual hot water requirements, even in chilly Britain. Then there is further potential from roof- and ground-mounted solar photovoltaic (PV) panels, ground source heat pumps that work like a refrigerator in reverse, and, in appropriate locations, biomass generators, fuelled by tree waste or specially grown ‘energy crops’. Microgen is climate-friendly and relatively low-cost energy, and has numerous other particular advantages. It reduces both the total supply capacity needed within networks, and the need for ‘peak provision’, which is one of the biggest planning headaches for utility managers. Since power is generated for local use, much less is lost during transmission, leading to major energy efficiency gains. (Ofgem, the gas and electricity regulator, calculates that power lost as heat on the grid costs the UK nearly $1 billion each year.) Microgen also means greater diversity in terms of power source and location, so reducing the vulnerability of the system overall. When a big power station ‘goes down’ a whole area might suffer a blackout, as happened recently in New York and in Italy. Microgen creates a broader, more secure basis of supply. It’s also fast and flexible when it comes to installation. Units can be installed far more quickly than a large central power station, and modular systems for wind, micro hydro, solar and biomass allow potential for cost savings through scaling up. It’s far easier to achieve economies of scale by making thousands of microgeneration units, than a handful of prototype nuclear power stations. (And in some senses, every nuclear power station is a prototype, because it must adapt its security and safety measures to each unique location.) Microgen from renewables also helps inoculate against price fluctuations in fossil fuels. Fossil fuels are a finite commodity whose supplies are geographically fixed. The market for them is notoriously volatile, making a nightmare for national economic planners. By contrast, microgen units can be installed where the power is actually needed – and that in turn has the potential to spur economic development at the community level.

“If 10 million consumers each installed 2kW of microgen PV or wind systems, they’d supply as much power as the UK nuclear programme.”

There are 29 million electricity customers in the UK. There is a potential for microgeneration for most of these, as the majority of households and businesses could comfortably accommodate a small-scale renewable generator of some sort. The Network for Alternative Technology and Technology Assessment, based at the Open University, has estimated that if 10 million consumers installed 2kW of microgen PV or wind systems on their premises, they would supply as much power as the UK nuclear programme.

Though not ideal for a decentralised system, the big energy utility companies are slowly waking up to the fact that microgenerators connected to the grid can make an important and growing contribution. Currently, however, their many advantages are not matched by the sort of preferential arrangements available to other, less sustainable energies. The government should act to remove damaging distortions in the energy market by signalling a fundamental shift of public financial support, away from fossil fuels and nuclear power, and towards renewables and microgeneration. This should apply both to the rollout of renewables, and to research and development. A whole range of incentives should now be set out to ease the path of microgen, including tax allowances for investing in renewables; stamp duty concessions for buildings fitted with them; and an obligation on all electricity suppliers to purchase power from microgenerators. Local authorities need to set targets for the uptake of microgen in their area, and ease their planning path by allowing them as ‘permitted developments’, on a par in the planning process with satellite dishes. The benefits to be had are not just those of clean energy. According to the renewables industry, it employs 8,000 people in the UK and is set to increase dramatically, with estimates that 25,000 jobs will be created by 2020. In the US, where official attitudes to climate change are more dismissive, the number of jobs in renewables is nevertheless projected to grow to 1.3 million by 2020, with 150,000 in PV alone. In Europe, one million PV jobs have been projected by 2010; two million by 2020. Figures from the European Commission are more conservative, but still predict that 900,000 new jobs will be created in renewable energy systems by 2020. This is job creation on a serious scale. The potential is huge: yet there is still a real danger that a resurgence of nuclear power could block its fulfilment, by distracting political attention and diverting financial support. The government’s Performance and Innovation Unit, no less, warned: “A sustained programme of investment in currently proposed nuclear power plants could adversely affect the development of smaller scale technologies.” In order to level the economic playing field for renewables in general, and microgeneration in particular, two things are needed. First, the government should remove the existing direct and indirect subsidies to nuclear power that ‘featherbed’ its prospects. Secondly, financial support for renewables should rise to match the levels historically enjoyed by nuclear power. In its evidence to the government’s 2002 energy review, the Carbon Trust neatly summed up the challenge. “Government funding should be focused on energy efficiency and renewables, as they have the highest long-term potential to deliver a low-carbon economy at the lowest overall cost.” We could not agree more. Andrew Simms is policy director of the New Economics Foundation (www.nef.org) and author of Mirage and oasis: energy choices in an age of global warming, a new report commissioned by the Ashden Awards from NEF.

Nuclear takes a hike According to our research, the true costs of nuclear power have been grossly underestimated by the industry. This figure illustrates the effects of correcting the various underestimates for the maximum cost of nuclear power. It starts from the UK industry estimate of 3p/kWh. Taking an average cost for the first eight reactors that would be built in a programme of new nuclear power stations, however, adds 1.3p/kWh. So does substituting the International Energy Agency range for typical construction costs in wealthy OECD countries. So called ‘first-of-a-kind’ costs – inevitable given the fact that any new stations would incorporate substantially new designs –add about 0.1p/kWh, taking the figure to 5.7p/kWh. Allowing for delays and cost-overruns of the sort typical for the industry could add a further 1.8p/kWh, and lowering the assumed performance to levels that have actually been achieved in practice adds another 0.8p/kWh, taking the total to 8.3p/kWh. This figure is 177% higher than that adopted by the UK’s nuclear industry. Tellingly, these costs do not factor in the wider risks associated with nuclear power. First, there’s terrorism. The September 11 attacks on New York and Washington raised fears about the vulnerability of nuclear installations to such assaults. Then there’s nuclear proliferation. There are hundreds of tonnes of high-grade nuclear material in the world, and no international inventory to keep track of it. Finally, there’s the risk of accidents. This might have been reduced by design and operating improvements in recent years, but when things do go wrong, it can be very costly not only in human terms, but economic ones, too. In 1998, Ukraine estimated that its losses from the Chernobyl disaster 12 years earlier amounted to between $120 and $130 billion. For neighbouring Belarus, the figure was $35 billion. Damage from that single incident (in nuclear speak, accidents are always termed ‘incidents’) still affects the hill farmers of Wales today. Figures released in 2004 (only in response, incidentally, to parliamentary questions from Labour MP Llew Smith), showed that the Chernobyl fallout was still damaging farming across a swathe of north-west Britain. In north Wales alone, restrictions on livestock remained in force at 359 farms covering 53,000 hectares. Small wonder that Swiss Re, one of the world’s largest insurance companies, concludes: “One of the most perilous shortcomings in traditional property insurance and reinsurance concerns inadequate nuclear risk exclusions.” Meanwhile, even a sustained programme of nuclear new build is highly unlikely to happen quickly enough to tackle climate change – or bridge the ‘energy gap’. From the start of the public inquiry to completion of construction, it took 12 years to build Sizewell B. Margaret Thatcher planned to build a whole series of new nuclear power plants, but managed only one. Yet if nuclear is to make a meaningful impact on world energy supplies, hundreds if not thousands of new plants would need to be built. A recent report published by the Massachusetts Institute of Technology said that to increase nuclear power’s share of world electricity from 17% to just 19% by 2050 would mean nearly trebling nuclear capacity – building an additional 1,000–1,500 new large nuclear plants worldwide. That would put a strain on available supplies of uranium. But more worryingly, it would make unplanned proliferation almost inevitable, and if the world were ‘going nuclear’ to that extent, the argument to deny ‘problem’ states – such as Iran – their own nuclear programme would be increasingly hard to defend.

22 July 2005

Andrew Simms