Cold turkeys: The demise of nuclear power

Jim Green, Mar 12, 2024,  https://reneweconomy.com.au/cold-turkeys-the-demise-of-nuclear-power-in-australias-aukus-partner-countries/

When announcing the AUKUS agreement in 2021, then Prime Minister (and secret energy minister) Scott Morrison said: “Let me be clear: Australia is not seeking to establish … a civil nuclear capability.” He also said that “a civil nuclear energy industry is not a requirement for us to go through the submarine program.”

However, Coalition Senators argued in a report last year that Australia’s “national security” would be put at risk by retaining federal legislation banning nuclear power and that the “decision to purchase nuclear submarines makes it imperative for Australia to drop its ban on nuclear energy.”

So, let’s see how nuclear power is faring in our AUKUS partners, the UK and the US.

This is a story about conventional, large reactors. All that needs to be said about ‘small modular reactors’ in the UK and the US is that none exist and none are under construction.

This is a story about conventional, large reactors. All that needs to be said about ‘small modular reactors’ in the UK and the US is that none exist and none are under construction.

The UK

The last power reactor start-up in the UK was 29 years ago — Sizewell B in 1995.

Over the past decade, several proposed new nuclear power plants have been abandoned (Moorside, Wylfa, Oldbury) and the only project to reach the construction stage is Hinkley Point C, comprising two French-designed EPR reactors.

In the late 2000s, the estimated construction cost for one EPR reactor in the UK was £2 billion (A$3.9 billion). When construction of two EPR reactors at Hinkley Point commenced in 2018 and 2019, the cost estimate for the two reactors was £19.6 billion. 

The current cost estimate for the two reactors has ballooned to £46 billion (A$89 billion) or £23 billion (A$44.5 billion) per reactor. That is 11.5 times higher than the estimate in the late 2000s. Further cost overruns are certain. This is an example of the Golden Rule of Nuclear Economics: Add a Zero to Nuclear Industry Estimates.

The UK National Audit Office estimates that taxpayer subsidies for Hinkley Point — primarily in the form of a guaranteed payment of £92.50 (A$180) per megawatt-hour (2012 prices), indexed for inflation, for 35 years — could amount to £30 billion (A$58 billion) while other credible estimates put the figure as high as £48.3 billion (A$94 billion).

Delays

The delays associated with Hinkley Point have been as shocking as the cost overruns. In 2007, French utility EDF boasted that Britons would be using electricity from an EPR reactor at Hinkley Point to cook their Christmas turkeys in 2017. In 2008, the UK government said the reactors would be complete “well before 2020”. 

But construction of the two reactors didn’t even begin until 2018 and 2019, respectively, at which time completion was expected in 2026. Now, completion is expected in 2030 or 2031. 

Undoubtedly there will be further delays and if the reactors are completed, it will be more than a quarter of a century after the 2007 EDF boast that Britons would finally be using electricity from Hinkley Point to cook their Christmas turkeys.

Construction will take well over 10 years; planning and construction over 25 years. Yet in Australia, the Coalition argues that Australians could be cooking Christmas turkeys with nuclear power 10 years from now.

‘Something of a crisis’

Nuclear industry lobbyist Tim Yeo said in 2017 that the UK’s nuclear power program faced “something of a crisis”. The following year, Toshiba abandoned the planned Moorside nuclear power project near Sellafield despite generous offers of government support — a “crushing blow” according to Yeo. 

Then in 2019, Hitachi abandoned the planned Wylfa reactor project in Wales after the estimated cost of the twin-reactor project had risen by 50 percent.

Hitachi abandoned the project despite an offer from the UK government to take a one-third equity stake in the project; to consider providing all of the required debt financing; and to consider providing a guarantee of a generous minimum payment per unit of electricity.

Long gone was the 2006 assertion from then UK industry secretary Alistair Darling that the private sector would have to “initiate, fund, construct and operate” nuclear power plants.

The UK Nuclear Free Local Authorities noted that Hitachi joined a growing list of companies and utilities backing out of the UK nuclear new-build program:

“Let’s not forget that Hitachi are not the first energy utility to come to the conclusion that new nuclear build in the UK is not a particularly viable prospect. The German utilities RWE Npower and E-on previously tried to develop the site before they sold it on Hitachi in order to protect their own vulnerable energy market share in the UK and Germany.

“British Gas owner Centrica pulled out of supporting Hinkley Point C, as did GDF Suez and Iberdrola at Moorside, before Toshiba almost collapsed after unwise new nuclear investments in the United States forced it to pull out of the Sellafield Moorside development just a couple of months ago.”

Sizewell C

The UK government hopes to progress the Sizewell C project in Suffolk, comprising two EPR reactors, and is once again offering very generous support including taking an equity stake in the project and using a ‘regulated asset base‘ model which foists financial risks onto taxpayers and could result in taxpayers paying billions for failed projects — as it has in the US. 

If recent experience is any guide, the government will struggle to find corporations or utilities willing to invest in Sizewell regardless of generous government support.

(The same could be said for plans for small modular reactors or mid-sized reactors envisaged by Rolls-Royce — it is doubtful whether private finance can be secured despite generous taxpayer subsidies.)

Many reactors have been permanently shut down in the UK: the IAEA lists 36 such reactors. Since the Sizewell B reactor startup in 1995, there have been 24 permanent reactors shut-downs and zero startups. 

Repeat: since the last reactor startup in the UK, there have been 24 shut-downs!

The capacity of the nine remaining reactors (5.9 gigawatts — GW) is less than half of the peak of 13 GW in the late 1990s. Nuclear power’s contribution to electricity supply has fallen from 22 percent in the early 2000s to 14.2 percent. 

Meanwhile, the UK government reports that renewable power sources accounted for 44.5 percent of total UK generation in the third quarter of 2023, a higher share than fossil fuels and around three times more than nuclear’s share.

What to make of the conservative UK government’s goal of quadrupling nuclear capacity to 24 GW by 2050? It is deeply implausible. The facts speak for themselves. Two dozen reactor shutdowns and zero startups since 1995.

The Hinkley Point project has been extremely slow and extremely expensive. The Sizewell C project is uncertain. Other proposals — including proposals for small modular reactors — are even more uncertain and distant.

Unsurprisingly, the extraordinary cost overruns and delays associated with Hinkley Point have complicated plans to advance the proposed Sizewell C project.

In 2010, the UK government announced that Sizewell was one of the locations slated for new reactors. Fourteen years later, construction is some years away and it remains uncertain if the project will reach the construction stage. EDF and the UK government are seeking to raise a further £20 billion from new investors. All reasonable offers considered.

France

The Sizewell C project is equally complicated across the channel due to EDF’s massive debts and its plan to replace the EPR design with an EPR2 design, about which little is known except that safety will be sacrificed on the altar of economics. EDF’s debt as of early 2023 was €64.5 billion (A$107 billion) and it was fully nationalised later in 2023 due to its crushing debts. 

In addition to its adventures across the channel, EDF has a “colossal maintenance and investment programme to fund” in France as the Financial Times noted in October 2021.

As in the UK, there has not been a single reactor startup in France since the last millennium. The only current reactor construction project is one EPR reactor under construction at Flamanville. The current cost estimate of €19.1 billion (A$31.6 billion) is nearly six times higher than the original estimate of €3.3 billion (A$5.5 billion). 

Construction of the Flamanville reactor began in 2007 and it remains incomplete 17 years later. Planning plus construction have taken over a quarter of a century. Yet the Coalition argues that Australians could be cooking Christmas turkeys with nuclear power 10 years from now.

France’s nuclear industry was in its “worst situation ever“, a former EDF director said in 2016 — and the situation has worsened since then. Another former EDF director said in early 2024 that the French nuclear industry is “on a slow descent to hell” and he has “fierce doubts about EDF’s ability to build more reactors.”

The US

The V.C. Summer project in South Carolina (two AP1000 reactors) was abandoned in 2017 after the expenditure of around US$9 billion (A$13.6 billion). Construction began in 2013 and the project was abandoned in 2017.

The project was initially estimated to cost US$11.5 billion; when it was abandoned, the estimate was US$25 billion (A$38 billion). 

Largely as a result of the V.C. Summer disaster, Westinghouse filed for bankruptcy in 2017 and its parent company Toshiba only avoided bankruptcy by selling its most profitable assets. Both companies decided that they would no longer take on the huge risks associated with reactor construction projects. A year earlier, Westinghouse said its goal was to win overseas orders for at least 45 AP1000 reactors by 2030. 

Criminal investigations and prosecutions related to the V.C. Summer project are ongoing: the fiasco is known as the ‘nukegate’ scandal.

Vogtle

With the abandonment of the V.C. Summer project in South Carolina, the only remaining reactor construction project in the US was the Vogtle project in Georgia (two AP1000 reactors).

Construction of the Vogtle reactors began in 2013 and the expected completion dates of 2016 and 2017 were pushed back seven years to 2023 and 2024. In 2014, Westinghouse claimed a three-year construction schedule for AP1000 reactors but the Vogtle reactors took 10 and 11 years to complete. 

The first licence application for the Vogtle project was submitted in 2006 so planning and construction took 17 years in addition to the time spent before the 2006 application.

The latest cost estimate for the Vogtle project is $34 billion (A$51 billion), more than twice the estimate when construction began (US$14–15.5 billion). The project only survived because of multi-billion-dollar taxpayer bailouts.

In 2006, Westinghouse said it could build an AP1000 reactor for as little as US$1.4 billion (A$2.1 billion) — 12 times lower than the latest Vogtle estimate of US$17 billion (A$25.5 billion) per reactor. Another example of the Golden Rule of Nuclear Economics: Add a Zero to Nuclear Industry Estimates.

Corruption scandals

In 2005, the US Nuclear Energy Institute claimed that Westinghouse’s estimate of US$1,365 per kilowatt “has a solid analytical basis, has been peer-reviewed, and reflects a rigorous design, engineering and constructability assessment.”

In fact, the estimate was out by an order of magnitude and the Institute’s involvement in a raft of corruption scandals has been exposed. No doubt the Dutton Coalition would happily parrot whatever lies the Institute chose to feed them, and no doubt the Murdoch/Sky/AFR echo-chamber would happily amplify those lies.

During the ill-fated ‘nuclear renaissance’, the US Nuclear Regulatory Commission received applications to build 31 reactors, but only the Vogtle and V.C. Summer projects reached the construction stage and only the twin-reactor Vogtle project was completed. Two out of 31 ain’t bad. Well it is, actually.

Thirteen reactors have been permanently shut down since 2013 with many more closures in the pipeline. The US has one of the oldest reactor fleets in the world with a mean age of 42.1 years. The mean age of the 29 reactors closed worldwide from 2018‒2022 was 43.5 years.

Around 20 unprofitable, ageing reactors have been saved by nuclear bailout funding but their future is precarious. In addition to the V.C. Summer corruption scandal, nuclear bailout programs are mired in corruption scandals (see here, here, here and here and if you’re still not convinced see here, here, and here).

Dr. Jim Green is the national nuclear campaigner with Friends of the Earth Australia and a member of the Nuclear Consulting Group.

March 12, 2024 Posted by Christina Macpherson | France, politics international, Reference, UK, USA | Leave a comment