SUBMISSION FROM NUCLEAR INDUSTRY ASSOCIATION
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1 SUBMISSION FROM NUCLEAR INDUSTRY ASSOCIATION The Nuclear Industry Association (NIA) is the trade association and representative voice of Britain s civil nuclear industry. It represents more than 150 companies, including the operators of the nuclear power stations, those engaged in decommissioning, waste management, nuclear liabilities management and all aspects of the nuclear fuel cycle. It also represents nuclear equipment suppliers, engineering and construction firms, nuclear research organisations, and legal, financial and consultancy companies. The NIA supports a diverse energy mix for the UK including clean coal, gas, renewables and nuclear. NIA members employ some 40,000 nuclear workers. Nuclear energy is a low carbon electricity generating technology and has a significant role to play in assisting the UK to meet its carbon reduction targets. In this submission we have limited our responses to the questions relevant to nuclear power generation. We have not commented on areas which do not fall within our field of expertise, but recognise that transport and efficiency of energy usage have important parts to play. Three primary questions: What type of future is needed in Scotland in terms of the production, distribution and more efficient use of energy, given the issues of price, security of supply and sustainable development? Scotland s electricity generation as with the rest of the UK - will increasingly need to be low carbon, strategically secure and economically competitive. This is key to meeting climate change commitments and guaranteeing a secure supply of stably priced electricity in Scotland. The NIA believes that the only way to meet these commitments is to develop a diverse and balanced mix of all low carbon options that can be considered to be from a secure supply. This must include renewables, nuclear and fossil fuels, with Carbon Capture and Storage (CCS) when that technology becomes available. How can this future be delivered in Scotland and how will we meet all the various targets and obligations? Scotland has great potential for renewables, mainly wind and marine, and investment in the development of these technologies should be encouraged. Significant improvements over current performance and economics should be achievable, but there must also be realistic evaluation of the ultimate capability of these technologies in the terms of intermittency, costs of large scale production and distribution, plus environmental impacts. At present the NIA considers that there are not adequate plans for replacement baseload electricity generation once coal and nuclear stations go off-line, and that this could lead to shortages in capacity and high costs of power delivered to areas requiring large amounts of power.
2 Hence the need for a balanced mix of nuclear, renewables, and clean coal or natural gas, with CCS once that technology becomes available. A secure, large scale low carbon nuclear contribution to Scotland s energy mix can continue to be provided by the private sector. The UK nuclear industry does not expect or seek subsidy from either Westminster or Edinburgh for new nuclear plants, nor for their share of costs for long-term nuclear waste management. What the nuclear industry will require is clarity and confidence on long term policies on the planning process, licensing procedures and the development of a stable carbon pricing mechanism. What decisions need to be taken, by when and by whom to deliver on Scotland s energy future? Given the current schedule of plant closure which will see the closure of Hunterston B in 2016 and Torness in 2023 alongside some of Scotland s coal fired plants in the same timescale - Scotland will need replacement for these large scale generators by Renewable technologies will to be able to deliver such large amounts of electricity reliably or at reasonable costs. This new build must prioritise the development of a low carbon and secure energy mix. Even if all nuclear power generation were to be replaced by low carbon renewables the total carbon emissions would simply stand still. Therefore, the current policy of no new nuclear plants in Scotland would need to be revisited. Decisions would then need to be taken on planning and licensing processes by Scottish Government and Local Authorities. Power utilities would need to decide on investment in Scotland and for which technologies. Following sub-questions: Which energy sectors offer the best prospects for economic growth and reduced carbon emissions, and how should these be secured? All technologies for low carbon power generation offer very good prospects for economic growth and reduced carbon emissions in Scotland. A balanced energy mix including all low-carbon options must be developed to ensure the secure and sustainable energy required for economic growth and to tackle climate change Nuclear has a key role to play in the reduction of carbon emissions, supply of competitively priced electricity and supply of high quality jobs. Nuclear power provides around 80% of the UK s low-carbon electricity, with Scotland s generating stations of Torness and Hunterston contributing significantly to this low-emission generation. An array of studies have concluded that the low carbon nature of nuclear is beyond question, including
3 the analysis contained in the UK Government s recent White Paper on nuclear power (January 2008). In terms of Megawatt production, nuclear power is by far Scotland s biggest producer of low-carbon electricity the issue of installed capacity should not be confused with actual generation. That is, the theoretical capacity of a technology is not the same as the electricity it consistently produces. The actual generation of wind power for example averages around one third of installed capacity and for coal this is closer to 65%; whereas for new nuclear this will be nearer 90%. Nuclear is capable of providing 24/7 baseload electricity generation vital to powering an advanced industrial society. Renewables have a vital role to play as an indigenous source of low-carbon electricity, but they cannot replace large-scale constant generation capacity; reduction in nuclear will inevitably lead to replacement with high carbon emitting fossil fuels. In terms of economic growth, the civil nuclear industry directly provides 40,000 jobs in the UK and supports another 40,000 indirectly, a significant proportion of which are based within Scotland. These jobs range across engineering, professional services and many other sectors providing high quality employment across Scotland. The contribution of the nuclear industry to the Scottish economy and to regional and local economies is significant and should not be underestimated. What are the hindrances to determining and developing Scotland s energy future? A hindrance would be the prioritisation of any goal above the reduction of carbon emissions and the assurance of energy supplies. What is needed in the short and medium-term, particularly from the Scottish Parliament and the Scottish, UK and other governments (such as the EU), to deliver Scotland s energy future? The Scottish Government s policy of opposing new nuclear development in Scotland could well prove to be detrimental to Scotland s energy and economic future. All possible steps to allow the development of a range of low carbon options would be of great benefit. Opposition to nuclear could also be detrimental to the Scottish economy, as a secure and reliable supply of stably priced electricity (which nuclear can provide) is essential in maintaining Scotland as an attractive place for economic investment. How can demand for energy be reduced in Scotland? If Scotland is aiming for long term sustainable growth it will require modern and significant industrial growth which inevitably will require more power. An increased use of electricity is also likely as part of any decarbonisation of the transport sector. To electrically power cars, low carbon baseload electricity is needed, whilst to run vehicles on Hydrogen power, large scale low carbon electricity is needed for the production of hydrogen through electrolysis.
4 As the only proven large scale generator of low carbon electricity, nuclear will have a key role in any such development. What is required is improved efficiency in the use of energy in all sectors such as industry, transport, space heating and lighting. Most such schemes have not delivered on their possibilities because of public attitudes. Hence, legislation or incentives are required in all of these sectors. How can the energy sector deliver the kind of reductions in greenhouse gas emissions that the Scottish Government wants to see? As stated above, through the implementation of a range of low carbon technologies. Renewables have a vital role to play, and Scotland s ample natural resources put it in a prime position to be at the heart of UK renewables development. Ongoing development of Carbon Capture and Storage (CCS) to reduce emissions from fossil fuelled generation will also become increasingly important in providing low carbon electricity. Energy efficiency will help facilitate the reductions that the Scottish government seeks, as will moves towards the decarbonisation of the transport sector. What is clear however is that this range of options cannot replace nuclear. Civil nuclear power in the UK prevents the release of over 30 million tonnes of carbon dioxide in the UK every year 8.3million tonnes per annum in Scotland alone. Unless this capacity of low carbon baseload is replaced, Scotland s carbon emissions from the electricity sector are near certain to rise over coming years. How can energy supplies be secured at a price which is affordable? Nuclear power provides some of the most stable and competitively priced electricity currently available on the UK market. The price of electricity generated by burning fossil fuels is heavily affected by fluctuations in the price of fuel. This is because the fuel bill represents in the region of 70% of the overall cost of generation; however for nuclear this figure is nearer 12% (Ref: The role of nuclear power in a low carbon UK economy, BERR, May 2007) - so any significant rise in the price of uranium has a very limited effect on the overall costs of generation. Thus nuclear will create a generating capacity that is insulated from sudden and significant fluctuations in price such as those seen in the fossil fuels market over the past year. Though nuclear entails significant up-front capital costs, all following costs including those of clean up and decommissioning of a modern nuclear plant - are well understood and can be budgeted for over the lifetime of the station. How can economic benefits from Scotland's energy industries and the development of clean technologies be maximised?
5 As stated above, the civil nuclear industry provides significant employment in Scotland; many of Britain s most successful and high profile nuclear companies including British Energy and Doosan Babcock are based in Scotland. Nuclear power stations also provide jobs over a long period, with 2000 jobs created in the construction of a station, around 600 for operation and an additional more contractors employed during outages. Whilst there are clear economic benefits available to Scotland through other low carbon industries, the socio-economic contribution of nuclear must not be overlooked. What are examples of best practice in Scotland and elsewhere, particularly focussing on low carbon solutions and covering electricity, heat and transport? Whilst this is not within the remit of the NIA s expertise, it must be noted that many potential carbon cutting measures, including any move to decarbonise the transport sector through the use of electrically or hydrogen powered vehicles, will be dependent upon the supply of large quantities of low carbon electricity. To electrically power cars, low carbon baseload electricity is needed, whilst to run vehicles on Hydrogen power, large scale low carbon electricity is needed for the production of hydrogen through electrolysis. As the only proven large scale generator of low carbon electricity, nuclear will have a key role in any such development. Nuclear Industry Association August 2008
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