TL: "The Economic Failure of Nuclear Power in Britain; Summary, Conclusions & Recommendations". (GP) SO: By Alex Henney. Greenpeace UK. DT: 1990 Keywords: nuclear power problems uk europe greenpeace gp summary / THE DEVELOPMENT AND DEMISE OF BRITISH NUCLEAR TECHNOLOGY Foreword: " This summary was previously submitted, on February 16 1990, as evidence to the House of Commons Select Committee on Energy's investigation into the costs of nuclear power. This document summarises and draws conclusions from the book of the same name. All supporting evidence and references to the Summary are to be found in the book." pg 12 THE DEVELOPMENT AND DEMISE OF BRITISH NUCLEAR TECHNOLOGY 22. In order to understand the failure of British nuclear power, and the reason why it had taken so long for its economic failure to become apparent, it is necessary to understate the history and political framework within which it developed in Britain. Namely, the programme has been moulded by four factors: military requirements, national pride, hope of cheap electricity, and concern about the security of fuel supplies. As will become clear, it has been exempt from normal financial constraints because support has been rooted so deeply in national status and prestige, and so much political face has been committed to it that admissions of failure were painful. The beginnings of British nuclear power - the Magnox programme 23. The military requirement for plutonium, coupled with Britain's limited resources, led the decision that the early reactors should be gas-cooled and graphite-moderated. This in turn led to the development of the Magnox-type reactors and in due course to the advanced gas-cooled reactor (AGR). Military requirements also determined the form organisation for developing nuclear power. The United Kingdom Atomic Energy Authority (AEA) was created as a uniquely powerful statutory organisation that was originally responsible for all R. &.D on military and civil nuclear power, for procuring and processing uranium and plutonium, for making bombs, and for designing and developing prototype civil reactors. The AEA was by statute the government's adviser on all nuclear matters. This autonomous, non-accountable and elitist form of organisation enabled people to undertake a great deal of interesting research, but did not discipline them to develop plants that were easy and economical to construct and operate. (Tbe demise of the AEA from an all powerful organisation, stripped in 1971 of its primary military responsibilities and of its uranium procurement, fuel fabrication and waste handling operations, to Policy wise that of a discredited contract R&D organisation, is a story in its own right). 24. In February 1955, the government announced a 10-year program to build 1,500-2,000 MW of capacity in Magnox power stations. The government claimed that after allowing a credit for the plutonium produced (which amounted to about a third of the cost of generation), the reactors would be economic. In announcing the programme the Minister of Fuel and Power, Mr. Geoffrey Lloyd, proclaimed, "Our nuclear pioneers have now given us a second chance - to lead another industrial revolution in the second half of the twentieth century". 25. The successful opening of Calder Hall (whose purpose was to make bomb-grade plutonium) combined with the Suez crisis (both in October 1956) led to the government tripling the Magnox programme to 5-6,OOOMW before any commercial station had started construction, let alone performed. Subsequently, the value of the plutonium credit disappeared; the cost ofbuilding the early Magnox reactors proved higher than budgeted and was three times the costs of building conventional stations; their construction periods were longer than planned; and several had severe commissioning problems. [end of pg 13] Construction times and costs of Magnox reactors Construction time Cost until synchronisation Budgeted Actual Planned Actual (nominal) (nominal) March 1988 prices (months) (months) # mil # mil Berkeley N/A 65 144 185 Bradwell N/A 66 143 175 Hinkley Point A 57 89 120 154 Trawsfynydd N/A 66 123 158 Dungeness A 44 58 119 119 SizeweH A 47 64 101 106 Oldbury 47 64 108 114 Wylfa 53 81 118 124 In 1969 the reactors were derated by about a fifth to reduce corrosion, and ovet their lifetime they have only achieved 63% of planned output. 26. Lord Hinton, who was responsible for both military and civil nuclear productiion AEA and became the first chairman of the CEGB in September 1957, is generally, regarded as the "father" of British civil nuclear power. He criticised the expanded Magnox programme as "ludicrous ... not a wise or practical approach", and argued for its curtailment. Henton expressed his views to Sir Percy Mills, the Minister for power and a confidant of Prime Minister Harold Macmillan, and "Mills was furiously angry with me about this". Although the timing of the programme was deferred, the cabinet was keen to keep the changes secret to avoid losing political face. 27. Eventually, in June 1960 the government published a White Paper, "The Nuclear Programme", which accepted that coal and oil supplies were plentiful and admitted that "conventional power costs are about 25 per cent less than nuclear costs in the Kingdom". The government nonetheless persisted with the Magnox program including the last Magnox reactor at Wylfa, which Hinton particularly oppose described it as "a long and sad story. It ought not to have been built at all, but when I [end of pg 14] suggested this to the Permanent Secretary at the Department, he said you have got to build it in order to meet the Government programme". 28. in 1962-63 the Select Committee on Nationalised Industries reported on the electric supply industry. In evidence to the Committee the CEGB estimated that the cost of nuclear power ranged from 0.27p/kWh(4) at Wylfa to 0.51 p/kwh at Berkeley compared with 0.20 p/kWh for Ferrybridge C coal station then under construction, and claims that the additional cost of nuclear power was about 20m [pounds] annually. Witnesses "from both the Ministry and the AEA told your Committee, nuclear power has so far failed to become competitive withconventional power largely on account of the extraordinary improvement in the efficiency of conventional generation". The Ministry of Power estimated that the additional capital cost of providing seven nuclear power stations between 1962 and 1966 rather than building conventional power generators would be 360m [pounds], which is more than 3 [billion pounds] in current prices. (4) For consistency prices are converted to new pence p. and are riot in old pence d. 29. The AEA was not happy with these figures, and said so. For example, in 1962 Sir Leonard Owen, a part time board member of the AEA, claimed that the costing assumptions were unduly conservative. He suggested that a load factor of 90% rather than the figure of 75% which the CEGB used "would not beunduly optimistic", a change which would have reduced the estimated "cost" of Magnox power by about 10%. This unfounded optimism was typical of the way in which figures for nuclear costs were contrived until the end of the 1970s, and is a fundamental reason why many were wrong. Namely, the estimates were based on little - and in some cases, no operating experience. They were based on what people thought, or hoped, would, happen, and too often - indeed almost invariably - the hopes were not realised. [end of pg 15] [Greenbase Inventory May 21, 1990 ] *SOURCE: "The Economic Failure of Nuclear Power in Britain; Summary, Conclusions & Recommendations". By Alex Henney. Greenpeace UK. The AGR [Advanced Gas cooled Reactor] 30. The design aims of the AGR were to reduce capital and operational costs and improve thermal efficiency comparrd with the Magnox reactor. To this end the AEA designed and built a 3OMW pilot plant at Windscale (Sellafield), which first produced in December 1962. The government backed the development. 31. In the late 1950s and early 1960s Britain deluded itself that it had a technological commercial nuclear power. But in December 1963 this complacency was shaken by the announcement in the US that the Jersey Central Power and Light Company was ordering an unsubsidised boiling water reactor (BWR) from US General Electric (GE), which was claimed to be competitive with coal generated electricity. Whitehall was thrown into confusion by the challenge from the US, and the expected announcement of a programme of nuclear power orders for AGRs was delayed. The government got itself off the hook by passing the decision to the CEGB to make on allegedly commercial grounds. 32. In 1964 the CEGB invited tenders by February 1965, to build a 1,200MW nuclear power station at Dungeness B. The CEGB received seven tenders, of which one was for a BWR in association with GE. On 25 May the Minister for Power, Mr. Fred Lee, announced to the House of Commons that Atomic Power Constructions (APC) had won the tender with an AGR and claimed, "I am quite sure we have hit the jackpot this time ... Here we have the greatest breakthrough of all times". 33. Later that year the CEGB published the appraisal on which its decision was based, and purported to show that the cost of power from the AGR would be about 7% less than power from the BWR. Subsequently in October 1965 the (Labour) government published a White Paper "Fuel Policy" which claimed that a "cautious" estimate of the cost of power from an AGR was 0.195p/kWh compared with about 0.22p/kWh for coal generated power. In reality all of these figures were baseless. They were founded on little more than a sketch scheme together with hope and faith, both of which were misplaced. The assessmentof tenders was not even-handed. The key assumptions underlyingthe comparison had no basis in experience, but were founded on speculations from a year's operating experience of the pilot project, and scaling up by a factor of 20, increasing the operating temperature by more than 1OO[degrees]C, and increasing the circuit pressure by two thirds. It isnoteworthy that the appraisal team included two AEA representatives who played a major part in evaluating the nuclear core; that the design chosen was similar to one that had recently been commissioned the AEA from APC; and that after the award of the contract the Director, Gas Cooled Reactors, of the AEA became the Managing Director of APC. The outcome of the appraisal was that the weakest consortium obtained an enormous job for an enormous job for an under engineered design with a tender which, it was subsequently admitted "was not a tender in depth to the degree that some of the other tenders were". 34. Dungeness B, which commenced construction in January 1966, is the single most disastrous civil engineering project undertaken in the UK. By 1969 it was in deep trouble, and subsequently another consortium took over as the CEGB's managing agent. It took 19 years to commission the first reactor on an interim basis and the second was not commissioned until 1988. The plant has cost more than five times in real terms than budget costing of the order of 4bn [pounds] in current money terms, which ranks it among the most expensive nuclear plant built in the world. Both units, taken out of service in May 1987 for remedial work, and defects discovered in the steam pipework led to an extension of the shutdown. In the year 1987-88 the load factor based on the total design output was 0.4%. 35. In spite of the problems emerging with Dungeness B, between 1967 and 1969 the CEGB let three more AGR contracts, and like Dungeness B, they all overran on time and cost and have subsequently underperformed: Construction time Multiple of cost Capacity until completion overrun in real Design Actual of commission terms (including at Planned Actual interest during 31/11/89 (years) (years) construction) MW MW Dungeness B 5 19-22 5.0 1,200 720 Hinkley B 5.5 9-13 1.6 1,320 1,120 Heysham 1 6 18 3.9 1,320 840 Hartlepool 6 20 2.6 1,320 840 In 1989 the CEGB wrote down the asset values of the AGRs by nearly 2bn [pounds]. ["A megawatt (MW) is 1,000 kilowatts (kW) and a gigawatt (GW) is 1,000,000 kW. [Greenbase Inventory May 21, 1990 ] *SOURCE: "The Economic Failure of Nuclear Power in Britain; Summary, Conclusions & Recommendations". By Alex Henney. Greenpeace UK. Misleading claims for cheap nuclear power 36. From the late 1960s to the early 1980s the AEA and the CEGB chose to forget the costs and difficulties of building the Magnox and AGR reactors, and made statements - or provided information to ministers who made statements in Parliament - that were often evasive and on some occasions deceitful, claiming that the Magnox reactors were producing, and that the AGRs would produce, cheaper power than coal stations. They used misleading accounting practices, and made assumptions that were wrong and on occasions discreditable. Misleading accounting practices 37. The CEGB: - ignored the interest incurred during construction, which would have added about 10% to the cost of power from Magnox reactors, and at least a third to the cost of power from AGRS; - used the conventional straight line method for depreciating assets. This method shifts the burden of capital costs to earlier years, and consequently in late years the capital charge reduces and the economics appear more favourable; - used historic cost accounting, which combines yesterday's capital costs with today's operational costs. In inflationary periods like the 1960s and more so the 1970s this practices further erodes the appparent cost of capital charges over time and appears to advantage projects (like nuclear) which have higher capital costs and supposedly lower running costs5 than those with lower capital costs and higher running costs (like fossil fuel plants). [Footnote] 5 Recent evidence in fact shows that the running costs of nuclear power are similar to or higher than fossil fuel plants, see paras 43 and 58, 59. Officials in the electricity supply industry took advantage of the distortion caused by inflation to justify nuclear power plants. For example, as late as 1980 the then Chairman of the CEGB claimed, "At times of high inflation there is great merit in capital intensive projects because once you have spent the money at the pounds of today you then benefit from low running costs for the rest of the life. This has been very true of the Magnox stations which now look ridiculously cheap today because they were built an appreciable time ago". This contention is economically ignorant. 38. There was no excuse for using these techniques. The distorting effects of accounting conventions and of inflation had long been appreciated by the more competent economists and accountants, and indeed the correct principles of costing nuclear power had been used in the 1950s. In 1972 the Department of Trade and Industry, which then included responsibility for energy, presented figures for the cost of Magnox power based on "revaluing all costs at 1972 money values, by using annuities for capital charges in place of those associated with straight line deprectiation...". The figures showed that Magnox power cost 51-64% more than coal generated power. Eventually in its Annual Report and Accounts for 1978-79, the CEGB admitted that "Previously the figures[on costs] were subject to distortion by inflation, whilst the method of straight line depreciation made comparison between different types of station difficult. The former problem should be resolved when current cost accounting is introduced. This [latter difficulty] could be remedied by expressing capital charges as annuities". [Greenbase Inventory May 21, 1990 ] *SOURCE: "The Economic Failure of Nuclear Power in Britain; Summary, Conclusions & Recommendations". By Alex Henney. Greenpeace UK. Incorrect and misleading assumptions 39. The economics of nuclear power from Magnox, AGR and latterly PWR stations was bolstered by incorrect and/or misleading assumptions on: - research and development costs; - building and operation costs; - the future price of coal; - the discount rate; - reprocessing costs; - decommissioning costs. 40. R & D costs. The Magnox figures never included the cost for research and development of the Magnox reactors, which has never been revealed. (The original intention was that the AEA would recoup R&D costs by means of a levy on output, but because of the high costs of Magnox power the agreement was voided in 1967.) Likewise until the CEGB had to pay for the AEA's research, none of the 1 1/4bn [pounds] in current money terms spent on AGR research was recorded as a cost. In its Annual Report and Accounts for 1979-80, the CEGB commented under an assessment of the cost of future nuclear stationsthat R&D was not significant "assuming substantial programmes of similarly designed stations". In fact the R&D spent on Sizewell B is of the order os 1/4bn [pounds], see para 68. 41. Building and operating costs. The most obviously incorrect assumptions that the CEGB made were in taking a rosy view not only of the costs that it would incur in building stations (as became clear at the Hinkley Inquiry, Sizewell B has repeated the historic CEGB pattern of cost increases compared with budget, (see para 67), but also of the operations and maintenance costs. These costs were variously assumed to be equal or at most about 20% higher than for a coal station, compared with the 200% experienced in the US, see para 59. 42. Fuel costs. In the late 1970s and early 1980s, in presenting forecasts of the benefit o nuclear power stations, the CEGB (and AEA) not only forecast ever increasing real costs of coal and oil which had no basis in the cost realities of the coal mining or oil businesses, but it contrived a presentational device which should have been below the standards of the most important nationalised industry in the country. Namely, the CEGB's assumptions stated that there would be a "2% per annum estimated average [real increase in the price of coal] for the whole period from 1980 to the end of the century". This increase (which totals 48.6% over the two decades) actually incorporated a 36% real increase in coal prices between 1979 and 1985 (a compound rate of 5% over that period) followed by a compound rate of growth of about 0.6% over the remaining 14 years. Under the discounting approach the "front end" loading of the increase seriously disbenefited the coal stations and benefited nuclear. 43. Discount rate. The discount rate is crucial in evaluating the economics of a capital intensive project - a change from 5% to 8% in real terms can increase the "cost" of nuclear generation by a third or more. In 1967, when the government first advocate the use of discounting techniques in appraising public sector projects, the discount r was set at 8% for low risk projects. Subsequently it was increased to 10% in 1969 was then reduced to 5% by the 1978 White Paper "The Nationalised Industries". This document referred to the discount rate as the "opportunity cost of capital", and its level was supposed to be based mainly on "the pretax real returns which have been achieved by private companies and the likely trend in the return on private investment". The figure was set at a time when comercial returns in Britain had dropped from 10 - 11 % during the 1960s to an all-time low of around 4-5%. While there might just have [pg 21] been a case for using 5% during the late 1970s, there was no case for using it from 1983-84 by which time the economy was recovering and corporate profitability began to climb to the more normal level achieved in the 1960s. Yet not only did the CEGE use 5%, it even presented figures based on the completely untenable figure 2%, presumably in an attempt to give credibility to the figure of 5%. [Greenbase Inventory May 21, 1990 ] *SOURCE: "The Economic Failure of Nuclear Power in Britain; Summary, Conclusions & Recommendations". By Alex Henney. Greenpeace UK. 45. Decommissioning costs. Until 1976 the CEGB made no allowance for decommissioning, and then when it did make allowances its figures were based on significant underestimates of the cost. According to the CEGB's Annual Report and Accounts 1988-89, the early closure of Berkeley nuclear power station resulted in additional costs of 78 million [pounds]; and the detailed review of the decommissioning that was undertaken with the closure of Berkeley resulted in the provision for decommissioning being increased from 551m [pounds] at 31 March 1988 to 1,396m [pounds] a year later. (The comparable figure for the AGR was an increase of 178m [pounds] from March 1988 to March 1989 and, in addition, there was an increaseprovision of O.6 [billion pounds] for reprocessing and waste storage and disposal.) It assumed that the reactors would bedecommissioned over a period of 100 years, which is a dubious assumption, see para 68 (iv). It further assumed that the way to finance decommissioning was to put aside sufficient funds so that when they were invested at 5% real, they would over the decadesgrow to such an extent that the resulting sum would cover the cost of decommissioning. Since 1 [pound] at a 5% compound ratio of interest over 80 years becomes 49.5 [pounds], the amount required to be set aside was trivial, namely 2p for every 1 [pound] of estimated cost. Thus decommissioning was discounted to negligible proportions. 46. It is not only of dubious theoretical validity from an economics view point to provide for uncertain liabilities so far in the future by discounting, but the number 5% was wrong. The correct number (if any) should have been derived by imagining that the money for decommissioning would be put into a trust fund which would be invested in [end of pg 23] risk free bonds i.e. gilts, which have achieved a real retum of slightly more than 2% over the last 70 years. A decommissioning allowance should be based on assuming a real return of 2% is a more tenable figure, and what the CEGB assumed for the Hinkley Point C Inquiry. 47. But perhaps more importantly, the discounting approach is dubious on ethical grounds. As the Committee observed in 1987: "...the relevance of the [discounting] method over more than 50 years is highly questionable. It is essentially an accounting exercise which pays no regard to questions of moral responsibility to future generations." 48. In the late 1970s and early 1980s the CEGB's figures were subject to increasing criticism. The Monopolies and Mergers Commission criticised the Board's investment appraisal methods as "seriously defective and liable to mislead .. against the pubhc interest" and the Select Committee on Energy commented in 1981 that: "A number of the assumptions in the figures produced by the CEGB and the Govermnent in support of their case are, in our view, questionable. Moreover the methodology employed is in many ways unsatisfactory. For example the figures for past expenditure ... are based on historic costs. This distorts the effect of inflation on capital costs thus rendering the resultant figures highly misleading as a guide to past investment decisions and entirely useless for appraising future ones". While some of the cost figures could not have been criticised at the time, there is no question that others could - and should -have been exposed as at best baseless and at worst misleading, if not deceitful. The consequences of the gradual adoption of more appropriate costing techniques and of more rustic assessments of the costs of operating Magnox stations and less fanciful estimates of future coal prices, was that between 1976and 1988 the reported cost of Magnox power to that of coal generated power increased from 0.64 to 1.4. Subsequently, with the revelation of the much higher reprocessing costs and higher decommissioning cost estimates in 1989, the ratio will be much higher. Likewise it is a long time since the CEGB has claimed that its [end of pg 24] AGR stations were economic. [Greenbase Inventory May 21, 1990 ] *SOURCE: "The Economic Failure of Nuclear Power in Britain; Summary, Conclusions & Recommendations". By Alex Henney. Greenpeace UK. Indecision and confusion 49. The problems of building the AGRs threw the British nuclear programme into disarray, and the 1970s were a period of claim, counterclaim, indecision, confusion and ultimately the demise of British nuclear technology. The Department of Trade and industry set up a secret committee (including the chairmen of the AEA and CEGB) under Mr. F.R.P. Vintner, a deputysecretary, to review the choice of reactor systems. The AEA supported the Steam Generating Heavy Water Reactor (SGHWR), which it hadbeen developing, and which in 1967 it claimed was "well beyond the development stage". In 1969 the chairman of the CEGB stated the Board could see no economic advantage in a light water reactor, but the SGHWR was "in all important respectsdeveloped to the degree which would be required by a power utility" and that it might be ordered for commissioning in 1974. TheVintner Committee's choice was reported as being "extremely finely balanced", and the government sat on the fence. 50. By the summer of 1972, however, the Chairman of the CEGB considered that the SGHWR was "out of date technology" and shifted support to US Pressurised Water Reactors (PWRS)because of "their competitive generation costs and advanced state of development". This set the battle lines for an argument that would continue through the decade between the CEGB whichwanted to build PWRS, and the AEA which fought for its own designs. The most notable feature of this debate was the chaotic, acrimonious, partisan, superficial and ignorant manner inwhich technological claims and specious cost and demand estimates were presented. 51. In December 1973 before the Select Committee on Science and Technology the CEGB claimed that the Board needed to order 18 twin PWR reactor stations over the decade from 1974, to which the Chairman of the AEA responded by claiming that the SGHWR [end of pg 25] was a "Proven reactor" and that it could start constructionthe next year. After three years of indecision and two secret committees, the government eventually announced in July 1974 that there would be a modest programme of building SGHWRS. Mr. Eric Varley, then Secretary of State for Energy, stated that "the period of uncertainty is over" and that the decisionwould "provide a boost for British technology". Two years later the AEA lost confidence in the SGHWR, and recommended "theprogmmme be replaced by AGRs or PWRS", which its deputy chairman Mr. Oater Sir, subsequently Lord) Walter Marshall personally backed. The govemment stopped research on the SGHWR, which had cost some 1 [billion pounds] on current prices. 52. The argument on reactor choice - British versus American - opened up yet again. The new Secretary of State for Energy, Mr. Tony Benn, had two reports prepared on the topic; thefirst advocated the PWR, the second the AGR. He was not empowered to make a decision, and eventually in January 1978 the issue was decided by the Cabinet. The CEGB and the South of Scotland Electricity Board were each told to order an AGR, but the govemment "endorsed" the electricity supply industry's "wish to establish the PWR as a valid option". This decision was the Indian summer of the AGR, which has cost the nation about 1 1/4 [billion pounds] in R&D and 15 [bn pounds] in capital,with an unknown liability for decommissioning, and all for no remotely economic output. 53. With the support of the CEGB, the retum of the Conservative government in 1979, and the appointment of Marshall, first as chairman of the AEA and then in 1982 as Chairman of the CEGB, the PWR became the only runner. Thirty five years of British effort to develop thermal nuclear technology came to an end, and the scene was set for the PWR fiasco. But before moving to this unfortunate episode, it is helpful to understandsomething about the PWR in the US both because we have imported American technology for Sizewell B, and because the US is the only source of reliable publicly available data on the performance of nuclear power stations. [[Greenbase Inventory May 21, 1990 ] RE: NUCLEAR POWER : UK THE COST OF GENERATION FROM SIZEWELL B AND THE SAVING FROM CANCELLING IT Source: Greenpeace Report, Henny, UK. 75. An estimate of the (real levelised) cost of generating power from Sizewell B is as follows. The real cost of capital will be taken as 8%, and the project will be assumed to have a life of 35 years. The CEGB's latest estimate of the construction cost of Sizewell B (net of initial fuel charge) is 2.20bn [pounds] in current prices. In view of the effective cancellation of Hinkley Point C and the other two proposed PWRS, this cost is likely to be exceeded because the CEGB had allocated some of its design and procurement costs (estimated at about 440m [pounds] in current prices) across the four stations, and the prices in some of the equipment contracts are based on repeat ordering. Without repeats, they will be increased. No account will be taken of these factors, which might well add a further 10-15% to the cost of Sizewll B. Time will tell whether these additional costs may be offset against the contingency allowance of about 280m [pounds] and savings if the scheme is built in less time than allowed for here. 76. For the 90 month programme of building the plant which the CEGB proposed for Sizewell B, and the pattern of cash flow which it assumed, then the interest during construction on the planet will total 0.88bn [pounds] at an 8% interest rate. Adding this sum to the construction costs results in a total development cost of 3.0bn [pounds] to which 1.1bn [pounds] of capitalised R & D costs should be added to srrive at a total of 4.1bn [pounds]. Assuming Sizewell B has a net output of 1,200MW, and that its average annual availability is 64%, which was the CEGB's central estimate, it will generate 6.7 X 10**9 kWh annually. Then the capital charge for power will be as follows: - p/kWh Construction cost 3.8 Capitalised R&D cost 1.4 Total 5.2 [end of page 40] 77. The operating costs are estimated as follows:- -Operations and maintenance costs based on US costs equal to 0.8p/kWh; -Post-operational capital additions cost based on US costs of approximately 10.5 [pounds]/kW, which is equivalent to 0.19p/kWh; -Nuclear fuel cycle cost of 0.75p/kWh, which was the CEGB's figure; -Decommissioning cost of 0.1p/kwh, which is probably low; -R & D continues at 20m [pounds] annually after commissioning, which is equivalent to 0.14p/kWh. The operating costs thus total about 2.0p/kWh, and the total cost is as follows:- p/kWh Excluding capitalised R & D 5.8 Including capitalised R & D 7.2 These figures compare with a reasonable estimate of the levelised cost of generating electricity from a large coal fired station as 2.8p/kWh. The saving from cancelling Sizewell B 78.Firm data on the amount that has been spent to date on Sizewell B [footnote 6], and the cost of breaking the contracts is not known. But an assumption that these two costs total 1.2bn [pounds] in current prices is not unreasonable. On this assumption then construction expenditure of 1bn [pounds] over 6 years could be avoided by cancelling Sizewell. [footnote 6]The CEGB spent O.7bn [pounds] on Sizewell B. The CEGB Annual Report and Accounts, however, state that 671m [pounds] had been spent by 31 March 1989, which would imply a higher figure spent by the end of the year. [end of page 41] 79.For simplicity, suppose that the expenditure were spread equally over the years at 167m [pounds] annually, and in addition that R&D averaging 28m [pounds] annually over the six years would be saved. Then the capitalised interest on future development at 8% would be 320m [pounds], and thus the future, capital cost of Sizewell B would amount to 1.49bn [pounds], say 1.5bn [pounds]. Using the same assumptions on the reactor's output as above, then this is equivalent to a cost of 1.9p/kWh. Thus the all-in future avoidable costs of generation from Sizewell B would equal this figure plus the 2.0p/kWh of operating costs to total 3.9p/kWh. As noted above, this is about 1.1p/kwh more than the cost of conventional coal generation (and perhaps 1.3p/kWh more than gas generation). For the annual output assumed of 6.7 x 10**9 kWh, this difference represents about 75m [pounds] annually for the next three decades on our electricity bills. 80.This figure could be a conservative estimate of the saving from cancelling Sizewell B. The reactor will commence being expensive to operate, and then as it ages it will become very expensive to operate. In 15 years time many of its one-off components will have to be replaced, but by then they will no longer be manufactured, and some of them will be very expensive to recreate. In addition:- it will be difficult to recruit staff of sufficient quality to operate it. In the 1950s and early 1960s the nuclear industry attracted some of the best technological brains. That long ago ceased to be the case, and in human quality terms the industry is in decline. We already have enough of a problem as to who will wish to work in the outdated Magnox nuclear reactors and the unique Advanced Gas Cooled reactors without adding to the Problem with the need to man yet another type of reactor, it will add to clean up problems in the mid 21st century. Contrary to government claims, there is no point in "retaining a PWR option". PWR technology is both immature and obsolete, expensive and possibly dangerous - it is a technological cul-de-sac. [end of page 42] END [Greenbase Inventory June 18, 1990 ]