Published inĀ The Guardian, on 2nd March 2005.

The nuclear industry has grasped at climate change like a drowning man clutching a passing log. Its latest piece of flailing around involved persuading some journalists that the prime minister is just waiting for the general election to be over to put out a white paper setting out the case for 10 new nuclear reactors. This was as much news to No 10 as it was to the public. But no doubt it accurately reflects the aspirations of the diminishing band of nuclear advocates.

In reality, as energy minister Michael O’Brien has pointed out on several recent occasions, the government would happily consider an application for one or 10 or any number of nuclear power stations right now from anyone who wants to build them. Unfortunately, no one is offering.

The brutal truth is that no one has yet managed to work out a way of getting nuclear reactors to burn uranium as effectively as they burn money – though extraordinary creativity has gone into concealing this from public view. Nor has anyone yet discovered how to make atoms work for peace without making them available for war.
For all their enthusiasm, not one of those arguing the case for more nuclear power plants wants to use their own money to build them. The clamour for taxpayers’ money is, however, loud.

Those hoping for a post election new nuclear dawn are pinning their hopes on a reshuffle that would remove Patricia Hewitt and Margaret Beckett – the perceived opponents of nuclear power in the Cabinet. But they have the wrong target. Tony Blair can have all the nuclear power he can persuade chancellor Gordon Brown to pay for.

As energy markets everywhere have liberalised, investors have fled nuclear. No new nuclear power station has been started in the UK for 15 years or for 10 years in OECD Europe or the US. For all its bullish pro-nuclear noises, the current US administration’s best estimate recently was that there might be one new nuclear reactor in the US in the coming decade.

It is not hard to understand investors’ reluctance. There is nothing very attractive about an investment that produces no revenues for seven years at a minimum, and more probably a dozen. The economics make sense only if you order 10 reactors at a time – hence the number in the supposed white paper – but this is hardly a strong selling point to the capital markets.

Furthermore, investors would be betting that governments will remain willing over very long periods to add to the already gargantuan bill that would fall on the taxpayer for the back end of the nuclear fuel cycle. They would also be betting that the taxpayer will go on underwriting the insurance costs of the nuclear industry indefinitely – one of the most egregious of the hidden subsidies that so distort the economics of nuclear power.

And they would be hoping that no one anywhere else in the world, through misfortune or malice, lost control of a reactor. Little wonder they can find better uses for their money.
It is often stated how difficult it would be to introduce enough renewables in time to make a difference to the climate. Less is heard about the same difficulty that would face nuclear power stations. One authoritative estimate puts the earliest operational opening of a new nuclear power station in Britain at about 15 years.

Since it really would be new – no one is suggesting we repeat existing designs, which are now several decades old – this may well be an underestimate. There are large cost and engineering uncertainties associated with new projects of this complexity. This argues for at least a few years’ operating experience before ordering begins (the advanced gas-cooled reactor experience is lamented but not forgotten).

Twenty years is thus a more realistic time before a new nuclear method could make any significant contribution to electricity generation in Britain. That is if we started today, which we will not, and if we could overcome arguments about sites, radioactive wastes and terrorists.

The reason climate change is so important to the nuclear industry is that it provides the only possible justification for not only reversing the two decades of effort to liberalise British energy markets, but also for large amounts of public expenditure. But if public money is to be spent to drive carbon out of the economy, then it is right to ask what will provide the biggest carbon bang for one’s buck.

On this count, nuclear power fares badly. Investment in energy efficiency typically displaces five to seven times the amount of carbon dioxide as investment in nuclear power. Furthermore, the other options have many more attractions for investors.

For the most part, the other options have shorter planning and construction cycles, thus allowing revenues to flow earlier and driving down the cost of capital. The shorter cycle times, combined with a more competitive suppliers market, drives rapid technical progress and lower costs.

Maintaining a stable climate while meeting energy needs is perhaps the sternest test of the 21st century. It will require great innovation and investment. Nostalgia for an unrealised dream is no substitute for a clear-eyed look at the future. Nuclear power does have a part to play in meeting the climate challenge, but it is unlikely to be very much greater than the part it is currently playing.