Written evidence submitted by Greenpeace UK (FNP 68)

Greenpeace has been for many decades, and continues to be opposed to new nuclear power for reasons of weapons proliferation, risks of nuclear waste management, accident and  terrorist risk. These issues have not disappeared, although UK political system appears to regard them as unproblematic – Greenpeace does not believe they are. The apparent saving virtue of nuclear power was its cost-effective delivery of low-carbon power. However, even if one chooses to ignore these risks, it is now questionable, at the very least, whether even the objective of low carbon power is most effectively delivered via nuclear.

The proposal to build 3 ABWR reactors at Wylfa Newydd is component of the UK Government’s plan for new nuclear power in the UK. This submission will examine the rationale for that choice, the ABWR model, and, as far as is possible, the costs of pursuing a nuclear plant at Wylfa.

Weakening rationale for nuclear

At the time of UK decision to go ahead with new nuclear power, it seemed to be the cheapest form of new low-carbon power. A price of £24/MWh looked a bargain[1]. As we now know things haven’t worked out like that, with a price over 4 times that proposed for Hinkley Point C. It is important to understand that even the Hinkley price contains a significant number of subsidies not available to or not needed by other forms of low-carbon power[2] including loan guarantees, accident insurance, long-term transfer of risk to the taxpayer over nuclear waste management, renegotiation of the strike price and protection against evolution of the power system. The final one is particularly important for nuclear power given the long contract length and long build times. Hinkley is expected to still be on a subsidy contract in 2060, yet the largest private bank in the world, UBS, has said that big centralised stations like Hinkley (and therefore Wylfa) will be ‘not relevant’ for future electricity generation[3] and could even be redundant by the time they are built (if they ever are).

The need for low carbon baseload power is the one that is used by government and nuclear power defenders. However this is now being challenged by people who understand the real situation and practicalities of power systems. According to the chairman of China’s State Grid[4] ‘baseload’ is only a mindset rather than a technical need and that the “fundamental solution [for the future] was to accelerate clean energy”. The outgoing CEO of UK National Grid, Steve Holliday, has echoed these sentiments saying that[5] “The idea of large power stations for baseload is outdated” and that rapid advances in solar and storage technologies mean that they will substantially replace centralised dispatch. Similar sentiments about the dynamics of change have been echoed by the industry trade body Energy UK[6]. Indeed major utilities Eon, RWE, Centrica and Engie are all reorganising their businesses around such technological change.

Which raises the question of what a future UK electricity system might look like. Analysis from Germany by a research partnership called kombikraftwerk shows how a system based on solar and wind can provide secure supplies 24/7[7]. Analysis of the UK power system by Demand Energy Equality for Greenpeace,  using 11 years of real hourly weather data shows that a predominantly renewable system combined with demand response, storage and interconnection can provide full system security by 2030, with substantial electrification of heat and transport,  at comparable cost to other mainstream scenarios[8].

In conclusion, the concept of baseload, and the need for nuclear to provide it, is looking a 20th century  concept. It’s a pity the current government appears to be organising energy policy around it.

The ABWR reactor

The Advanced Boiling Water Reactor (ABWR) is unlike other proposed reactors in UK, in that it has actually been built and operated. However there are other instances of this reactor type being proposed and either not being built or taking a very long time. The ABWR in Lungmen, Taiwan began construction in 1999[9] and has not yet been completed – indeed it may never be. The ABWRs in Japan are very unlikely to be completed now. Although it got design clearance in USA in 1997[10], the certificate has now lapsed without there ever being a buyer.

Hitachi has made no secret[11] of the fact that it is looking to export its ABWR technology because after the Fukushima disaster in Japan there is no market for its reactors in its home country.

There are 4 ABWR reactors built in Japan, but the reliability has been poor. The 2011 accident at Fukushima closed down all Japanese reactors, but according to IAEA the load factor – the proportion of time the reactors were generating power - for those ABWRs in the period between 2007-11 had been below 50%[12]. It is claimed that those 4 operating reactors were built to time and budget, but the extent to which that can be a guide is not clear given that significant modifications will be made to the ABWR design in order to gain clearance for any construction in Europe[13]. Moving a reactor model to other jurisdictions can add considerable cost – a modification of the ABWR proposed for the US, the Economically Simplified Boiling Water Reactor, looks to be even more expensive than Hinkley Point[14]. A cancelled ABWR in US had costs around the same as Hinkley[15].

Delivery of the Wylfa project

Horizon accept that Hitachi cannot finance the Wylfa plant on its own and will need to find other investors[16]. Whilst it has been argued that ABWR is a more attractive model for private investment that the French EPR (destined for Hinkley) on the basis that it has several models up and running[17], the fact that several proposals have started and then effectively been abandoned, and those that have been made to work have relatively poor performance (see above) makes this a questionable claim.

The ongoing debacle around Hinkley Point has started to affect confidence in the Wylfa project[18] as the boss of Hitachi has rather cryptically suggested that a combination of delivery uncertainty, challenging terms and conditions, and the involvement of Chinese money are all making Hitachi less keen on UK nuclear. Whilst not really clear, the comments appear to imply that if UK government wants some kind of guarantee around delivery timetable it will frighten away investment. The UK Nuclear Industry Association has said that failure to build Hinkley Point  "threatens not only the first new nuclear power station for a generation, but potentially all those that will come in its wake".[19] This is a vulnerable place for the Welsh economy to be if it is dependent on a Hitachi investment decision – even EDF’s own management think Hinkley should not proceed for at least another 3 years because of the risks to the company[20]. Whilst calls for abandonment of the project itself have come from  Financial Times, Telegraph and Economist amongst many others.

What would be the cost to consumers of proceeding with the Wylfa development? Assuming 2 reactors of 1.35GW, operating at a load factor of 80% with today’s power price, a contract for difference would add about £900million per year to UK energy bills, over £11.50 per year on the average household bill, with proportionally less if the reactors do not deliver 80% load factor. (The spreadsheet providing this calculation can be supplied if required.) This is in sharp contrast to the additional cost of £1 per household bill that would have likely been sufficient to get solar power installation to be subsidy-free as UK entered the early 2020s, but was stopped by a cut in support that was made in the name of saving consumers money.

Conclusion

Wylfa Newydd is a project based on a concept of nuclear power being essential for UK’s energy future. This is outdated, and many organisations (not Government) see that. The ABWR model, whilst it has been constructed elsewhere in the world, may well struggle to attract private investment to make it viable given poor performance. Any decision to go ahead with the Wylfa project seems tied to the ill-fated Hinkely Point reactor, which faces wide opposition and for which there is a substantial chance will never be built. The rationale for Wylfa will also fall if government starts applying cost criteria consistently across different technologies.

05 March 2016