Sellafield (photo: Leonora Enking – Global Panorama)
Crunch time is here: energy security and affordability concerns are colliding with the need to reduce CO2 emissions, writes Malcolm Grimston of Imperial College London. That’s why the UK government is right to want to get new nuclear power plants built, argues Grimston. (See the previous article, by Peter Strachan and Alex Russell of Robert Gordon University. for a different viewpoint.)
An experiment in liberalising power markets has been underway in the UK since the 1980s and three phases can be identified. The first ran from around 1989 to 1999, beginning with the privatisation of the generating industry and grid and ending by giving customers the freedom to shop around for their supplier.
When liberalisation proper started in 1999 the system was well supplied – even oversupplied – with generating capacity. So the next stage was one of cut-throat competition for market share. This led to a collapse in the wholesale price of power.
Another decade on and new problems emerged as power plants approached the end of their lives. Competitive markets are efficient at getting best value out of existing infrastructure but much less so at deciding when and how it should be replaced – especially when there is uncertainty about how much business coal and gas-fired plants will secure in an era where there are green energy targets to meet.
It still comes down to intermittency
The problem is that renewable power is not reliable enough to supply all demand, and is often least reliable in the middle of winter when most power is needed – the UK needs about three times as much electricity on a late January afternoon as on an early July morning. This means that to have security of supply, someone needs to build coal/gas/nuclear plants that offer enough reliable capacity to meet peak demand while knowing that for much of the year they won’t have a market at all.
On top of this, the economics of building new carbon-free power are very different from carbon-emitting power. Coal and gas-fired plants tend to be quicker to build and have relatively low capital costs – certainly in the case of the combined cycle gas turbine (CCGT) – but they are expensive to run. Markets prefer this: investors get their money back quite quickly and if the gas price surges, consumers have little choice but to pay the higher power prices that result.
By contrast nuclear power and renewables are expensive and slower to build though they use little or no fuel. Private investors find their capital tied up for longer periods of time without a cash flow. If the project runs over cost and time, as has been seen recently with a number of offshore wind farms, CCGT companies can pick up the business by having a new plant up and running in a couple of years.
To choose a mix or not?
So governments in the UK and elsewhere have faced real challenges. Do they stick to the market mantra, knowing that to do so they will need to transfer large portions of the risk associated with nuclear and renewables onto the consumer to prevent all investment going into CCGT? Or do they unequivocally renationalise the responsibility for plant mix (while still supporting a competitive market in operation)?
So far the answer has been the former. To persuade companies to build renewables, they are not expected to bear the costs of the hugely expanded grid necessary to support their output. When there is too much wind or solar being produced, threatening melting the wires or blowing electronic equipment, renewable generators also get paid to shut their plants down, a benefit not extended to any other players. On top of these enormous hidden subsidies, they also get guaranteed wholesale prices through the “Contracts for Difference” system – a subsidy from which nuclear benefit too.
Crunch point may be coming. Mitigating climate change is coming under threat from an alliance of Big Green and Big Sceptic. Both broadly agree that global warming is probably happening (Big Sceptic less enthusiastically than Big Green but there are very few who do not accept that carbon dioxide is a greenhouse gas). But in practice both argue that the costs of mitigating it are too high –- Big Sceptic focuses on the financial costs, while Big Green frets about nuclear’s environmental costs. (The complete lack of any criticism of increased greenhouse gas emissions in Japan and Germany as they shun nuclear power for purely political reasons is highly illuminating.)
If the fight against greenhouse gas emissions is abandoned under this twin attack from Nigel Lawson and the Greens, all bets are off. And don’t expect an explicit decision so much as a failure to change at the rate needed to meet the very long-term carbon reduction targets. A fracking revolution in Europe like the US one could then reduce dependence on Russia and Iran enough to make a second dash for gas (dwarfing the first) look acceptable.
Why nuclear?
On the other hand, if the concerns about security of supply and carbon emissions persist then nuclear power is in effect the only source which is both reliable and low carbon. (Two others come close – large dam hydro, which is not quite secure, and biofuels, which are not quite low carbon.)
This means that at least as far as the irreducible 20,000MW of power demand that exists throughout the year is concerned, nuclear is the obvious choice on economic grounds when all costs are concerned. It retains considerable support among British people – even more than before Fukushima, as people realise that in unimaginably stressful circumstance even 1970s nuclear technology did not release enough material to cause detectable health problems. The inevitable waste legacy from the experimental days in the decade or two after fission was discovered will be expensive to resolve but new plants have learned those lessons and volumes of waste will be much lower.
Two questions remain though – can the industry deliver to time and cost, and will the government abandon its attempts to persuade investors to carry out public policy at private sector rates of return and instead resume responsibility for the plant mix, allowing it to be carried out at public sector rates of return and slashing the cost to consumers? A yes to both would revolutionise nuclear power’s prospects and return it to its position as the only major technology that can be brought on line quickly. At this uncertain stage, the UK government’s deal overHinkley Point C and its preliminary agreements over two othernew nuclear builds are the only sensible course of action.
Editor’s Note
Malcolm Grimston is Senior Research Fellow at Imperial College London. This article was first published on The Conversation on 5 December 2014. It is made publicly available under a Creative Commons Licence.
In another article from the Conversation, Peter Strachan and Alex Russell of Robert Gordon University argue against UK nuclear policy.
For more on the controversial Hinkley Point C project, see these articles published in recent months on Energy Post:
The Saga of Hinkley Point C: Europe’s key nuclear decision
Hinkley Point C: the EU energy market will not be the same after this
Europe’s nuclear future may hinge on UK’s Hinkley deal
We have also extensively covered the new nuclear project carried out by Fennovoima in Finland, which is to be built by Russian nuclear company Rosatom. On 5 December the Finnish parliament approved the project,which is now virtually certain to get built. See our latest article here, which contains references to previous coverage:
Russian-built new nuclear reactor gets go-ahead in Finland
All our articles on nuclear power developments can be found in the section Nuclear Power on our website.
The debate over what role nuclear should play in a low-carbon power system is an important one, and many good arguments can be put forward to suggest, for example, that Germany is making a grave mistake in shutting down their existing nuclear plants before the end of their useful lives. But transparently flawed “analyses” such as what we find in this article add nothing useful to that debate. The idea that one needs inflexible “baseload” generation to reliably meet the minimum system load (the “irreducible 20,000 MW” referred to in the article) has been soundly debunked in several robust studies from extremely reputable and mainstream sources and, indeed, has in practice rarely been the case throughout the history of the power industry. The real economics of new nuclear, as demonstrated in several recent projects, are extremely difficult to justify and, unlike what has been and continues to be the case with key renewables technologies, the history of the nuclear industry gives no reason to expect anything other than that the total cost of new nuclear power plants will continue to rise in real terms as it has done inexorably for the 50+ year history of the commercial nuclear industry, rather than decline, as a result of government support for new deployment. It is also telling that the writer fails to understand the actual topography of the Fukushima disaster: Not only were the circumstances not “unimaginable” – several expert bodies had pushed over the years for TEPCO and the Japanese regulator to model and prepare for just such a scenario but were repeatedly ignored – but the accident actually released alarming and dangerously large quantities of radiation, enough to have led to catastrophic outcomes in major Japanese population centres, had the prevailing winds at the time been from the northeast rather than from the southwest. The death from a rampant and directly attributable cancer of the courageous TEPCO manager who stepped in where more senior officials were unwilling to go to stabilize the plant only strengthens the evidence that Fukushima was every bit as dangerous a catastrophe as critics have said it was, and that Japan simply got very lucky in the immediate aftermath. Fukushima was yet another demonstration of the inadequacy of our current human institutions to the task of responsibly managing such a magnificent but potentially dangerous technology, a fact that has plagued the nuclear industry for over 50 years and, based on what we know today, will continue to do so. We need objective, well informed discussion of this issue. Sadly, this article falls far short of those standards.
Just some remarks:
When there is 3x bigger electricity consumption in winter than you need power plants to be run in winter. That is not a case how any nuclear power plant would be run. So, even NPPs are not a solution.
I pressume that this peak is mostly caused by electric resistance heating. So, let’s start with better insulation of notoriously leaky British buildings and support switch to some different (and less wastefull) form of house heating, f.e. heat pumps which works great in mild British weather.
The same amount of electricity which will eventually produce new Hinkley Point C will be provided in Britain by the wind power built in just 2-3 year. For a much lower cost, no fuel price risk and minimal technology risks.
The usual nonsense and half-truths from somebody who does know better but lets cognitive dissonance & doubtless money from EdF get in the way. One example of such nonsense: ” When there is too much wind or solar being produced, threatening melting the wires or blowing electronic equipment”… I am a power engineer, I have a wide range of contacts amongst DNOs and TSOs – this does not happen. It is at best alarmist, at worst a simple lie.
The writer raises the issue of wind intermittency & the old chestnut of “cold snap & no wind”. A 2006 UKERC report covering wind and intermittency costs deals with this. Quoting from page 20 of the report: “Wind power sites typically generate electricity for around 85% of all hours, (and) a diversified UK wind power system would generate electricity for 100% all hours. “Between 1970 and 2003 there was not an hour, let alone a day or week, with no wind across the UK”
A further note, it is most windy in the UK…. in …..winter. i.e. wind in terms of a yearly power distribution curve is skewed to when it is most needed – winter. Furthermore, as Paatero et al show (Effect of Energy Storage on Variations in Wind Power) the spectrum of wind power has peaks at 1 minute, 12 hours and 100 hours. The latter matches weather fronts. Wind located in windy regions could store energy through power to gas, a tech available…. now.
None of the above fits in with either the narrative that Grimston wants to put forward or the presumed income stream that nuclear would bring to Imp’ College.
In the case of back-up capacity, the UKERC report, again: 20% of wind name plate capacity is what it needed up to 15% wind penetration & a lower amount after that.
In the case of half truths “By contrast nuclear power and renewables are expensive and slower to build”………..Slower? only in the UK where people like Piggles (Sec State for Local Government) makes sure wind farms are rejected – presumably so UK serfs/peasants can pay for expensive nuclear. On-shore wind is only expensive in the UK because it is not treated as a utility asset (and thus eligible for wayleave treatment wrt planning)
Finally, with respect to space heating – mentioned by one of the commenters (& a large consumer of energy in the UK). There is a solution on the market & it will be coming to the UK in volume, next year. It is renewable & it can reduce gas (or oil) consumption by around 80% over the year for a given installation & no, it is not a heat pump.
One item not mentioned is nuclear power extends the life of fossil fuels no matter the outcome of the debate burning fossil fuels produces carbon dioxide that causes catastrophic global warming (climate change). Nuclear plants have lifetimes of 60 years and capacity factors of 0.9. Over its lifetime, a 1100 Megawatt nuclear plant will save the use of 230 million tons of coal or 5 trillion cubic feet of natural gas. In the U. S., five nuclear plants save the annual use of coal or natural gas.
Comparing capital costs of electricity of nuclear plants with solar or wind also show great savings using nuclear plants due to the massive output in kilowatt-hours from a nuclear plant.
James H. Rust, Professor of nuclear engineering (U. S.)
I have a 2 MW Vestas wind turbine near my home. When I look at it and see it spinning I can just count – one kilo of coal, one kilo of coal, one kilo of coal, …
And just for your information, if US citizens would adjust their energy/electricity consumption to cozy EU standards, USA could stop burning coal in power plants forever.