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4 March 2005

Renewed Focus on Nuclear Energy

Ian Hore-Lacy, General Manager, Uranium Information Centre, Melbourne
Director of Public Communications, World Nuclear Association, London

It is timely to be addressing the issue of nuclear power on the one hundredth anniversary of Einstein's most productive year of influence on physics, and to be doing so in New Zealand, since Ernest Rutherford, the father of nuclear physics, hails from here. As one of the most illustrious scientists of all time, he is to the atom what Einstein is to relativity. In 1902 he showed that radioactivity as a spontaneous event emitting a particle from the nucleus created a different element, thereby explaining radioactivity. He went on to develop a fuller understanding of atoms and in 1919 he fired alpha particles into nitrogen and found that nuclear rearrangement was occurring, with formation of oxygen, so was arguably the first to split the atom. New Zealand thus has an impressive pedigree in nuclear power, even if the last 85 years have been quiescent!

World energy demand is rising quite rapidly.

Nuclear power currently provides one sixth of the world's electricity, to meet base-load demand. NZ & Australia are the only two developed countries not using electricity generated by nuclear power.

Currently 439 power reactors are operational (as well as 280 research reactors and around 200 more providing marine propulsion, mostly for submarines and icebreakers).

Nuclear power has been producing electricity for almost 50 years, and the technology is mature and proven, with almost 12,000 reactor-years of civil operational experience (and slightly more than that in naval experience).

Nuclear power plants are operated in 30 countries and more are being built in ten countries because they make economic sense. In addition, for many countries energy security is best served by nuclear power for electricity.

As carbon costs are imposed on fossil fuel power generation, such as through the European Emissions Trading Scheme, nuclear power moves into an even stronger position and could readily become economic in New Zealand.

There are a number of elements leading to or affecting renewed interest in nuclear power worldwide. Let me comment very briefly on 15 of them.

1. Major nuclear power expansion is underway in some countries, eg China and India are quadrupling nuclear capacity by 2020. Japan and South Korea are steadily increasing their nuclear capacity. Finland has four reactors providing a quarter of its electricity and is now building a fifth. There is steady growth elsewhere but the situation is stagnant in some countries, for instance UK, with no coherent policy at all. On the other hand, in Germany, Sweden & Belgium nuclear power is set back by the need to appease and humour minor coalition partners in government. These anti-nuclear policies are unlikely to persist long enough to matter, or to outlast a change of government.

2. Up to date technology: Advanced 3rd generation reactors are now on the market and being built. These have greater standardisation, simpler engineering, expedited approvals in several countries, longer operating life, and are one or two orders of magnitude safer than the well-proven 2nd generation units. They include units from 115 MWe up. Early 3rd generation plants are in operation in Japan.

3. Carbon constraints or costs: It is clear that there will be increasing pressure to limit carbon emissions from burning fossil fuels. In context of Kyoto, we need to factor in at least one US cent per kWh for carbon cost with coal generation, at least half that for gas (on basis of various proposals and EU Emissions Trading Scheme transactions). Nuclear has zero cost for carbon emissions.

4. Nuclear fuel costs are low: doubling the cost of gas increase electricity production cost about 70%. Doubling the cost of ex-mine uranium increases electricity production cost about 5%. This is a major economic factor in choosing new plant, all the more so if coal has to be hauled halfway round the world.

5. Capital costs are high - around US$ 1200-1700 per kilowatt overnight cost - and are major hindrance to new nuclear reactor investment. However, once it is built, the owners are relaxed as fossil fuel prices rise.

6. Overall costs: Even without carbon value, nuclear is competitive in many areas. Finland's decision to build a large new reactor was basically an economic one. Wind power is the main no-carbon alternative, it typically costs much more per kWh generated and so needs government coercion to succeed - both because of cost and intermittent unpredictability, hence further cost of back-up power capacity which is eventually passed on to consumers. This is especially so as the output gets up to about 10% of total share.

7. Energy security is a major factor. There is no problem and relatively little cost in holding a few years' supply of nuclear fuel, either as mined uranium or as fabricated fuel. Being at the end of a gas pipeline from Siberia or Middle East, through a variety of interesting countries, or subject to long distance sea transport, can cause great unease - both civic and economic. Japan and France are two countries which got that message in the 1970s and responded with vigour. France today gets 75% of its electricity from nuclear power and is the world's largest net exporter of electricity. Japan gets about one third of its power from nuclear.

8. Public opinion: Many years of fearmongering by assorted activist groups with ideological opposition to nuclear power is wearing thin and losing credibility. Much folklore and misrepresentation find their way into credulous media. But there has been a significant change in Australia and New Zealand over the last year, and positive, well-researched newspaper articles are now seen. In every country where it is measured, public support for nuclear power is strengthening, and - at over 80% positive - it is strongest in countries like Sweden which have had to face up to prospects of phasing it out.

9. Safety: The industry safety record is excellent - almost 12,000 reactor-years of operation with only one accident causing public harm, and that was of very little relevance to any reactor that is licensable in the west - or anywhere today. There has never been any public harm from any such reactor and as with most technologies, operations today have generally much enhanced safety margins compared with decades ago. If NZ wants to be reassured about the safety of nuclear power re earthquakes, go ask the Japanese - they have 54 nuclear power reactors in their shaky isles!

10. Wastes: In Europe for instance, radioactive wastes comprise about one percent of all toxic industrial wastes.

There have been no problems from storage, handling and transport of civil nuclear wastes in 50 years, and none are likely. A petrol tanker on Auckland's roads is more of a public safety hazard than any nuclear waste in transit anywhere in the world. Cost is internalised at about one fortieth of generation cost. Technically, storage and disposal are straightforward. Decommissioning costs are also met from current production. Political problems regarding sites for geological disposal do hamper the industry though - NIMBY etc.

11. Alternatives: For base-load power - continuous, reliable supply on a large scale, there are generally no carbon-free alternatives to nuclear power. New Zealand has depended heavily on hydro for many years, but scope for expansion is limited and even the reliability of present capacity depends on capricious rainfall. I note that hydro output has not increased over the last 15 years, and that growth in demand since 1990 has been mostly met by gas-fired plant, at least until the state-owned Huntley plant shifted to using coal for 80% of its energy, with some negative implications for moving the fuel.

Non-hydro renewables have an important role, especially if coupled with hydro, but they are not alternatives (any more than base-load plant and peaking capacity are alternatives). They are only intermittently available, so require full back-up from conventional sources. As Roy Hemingway said yesterday: "how much wind can we put into the system without creating instability?"

12. Opportunity costs: Uranium has no other uses than concentrated energy production. Natural gas is touted as a CO2-reduction strategy relative to coal, but do you really want to squander Maui and Pohokura for base-load generation? It is most unlikely that our grandchildren will thank us for profligate use of it in large-scale power generation. Gas is also a valuable chemical feedstock.

13. External costs (those actually incurred in relation to health and the environment and quantifiable but not built into the cost of the electricity to the consumer and therefore which are borne by society at large): The European ExternE report shows that in clear cash terms nuclear energy incurs about one tenth of the costs of coal. Nuclear energy averages under 0.4 euro cents/kWh (0.2-0.7), less than hydro, coal is over 4.0 cents (2-10 cent averages in different countries), and gas ranges 1-4 cents. The EU cost of electricity generation without these external costs averages about 4 cents/kWh. If these external costs were in fact included, the EU price of electricity from coal would double and that from gas would increase around 30%.

14. The resource base for long-term use of nuclear power is good. With one well-proven but currently uneconomic technological step one can get about 60 times as much energy out of the raw uranium as we do today. Uranium itself is fairly abundant, and thorium is also a potential fuel.

15. Further out: nuclear power is very likely to be used to make hydrogen for transport fuel, initially by high-temperature electrolysis, then by thermochemical process using high-temperature reactors.

Some people are concerned that nuclear power presents an unacceptable risk, though the record of nuclear energy production in Western countries speaks for itself in this regard. As the debate about greenhouse effects and how to respond strongly reminds us, no course of action or inaction is without some risk.

I am hopeful that the present NZ government is open to properly considering nuclear power prospects - though as we heard yesterday, there are some present misconceptions. A policy of increased dependence on fossil fuels raises questions about environmental responsibility - a priority, according to the Minister yesterday. No base-load option is more environmentally benign - clean, green, and sustainable - than nuclear power. Therefore a nuclear plus renewables mix as the centrepiece would seem a most appropriate way forward for NZ.

Not used in speech:

For the sake of future generations, if New Zealand wants carbon-free base-load power, and there are constraints on expansion of hydro capacity, nuclear power deserves close consideration. It is a well-proven way of maintaining a clean and green image if you can get past the ideological hang-ups.

The point is, if we are considering what generating plant is suitable to be operating in 30-40 years, there is a strong argument for diversifying and including nuclear power in the mix.

I applaud the Energy Minister's sponsorship of the Sustainable Energy Workshops next week focusing on electricity supply, and trust that he will ensure that those processing the output are professionally informed.
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