When I am having a bad day on the frontiers of the solar revolution, I try to imagine being the chief finance officer of British Energy, who will probably be having a much worse day, and indeed, vocational, life. He or she is supposed to raise multiple billions for a new generation of nuclear plants, but a few questions need answering by the owners and likely suppliers first. EDF, owners of British Energy, are majority-owned by the French government, like the French reactor-building company, Areva, which is widely expected to build most or all new British reactors (if they are ever built). I imagine an e-mail from CFO to CEO about these questions…...
Could I request a status report on some unresolved issues? It seems to me that some or all of these might hold the potential to embarrass us in our attempts to raise the capital we need for new reactors, and to put investors off.
1. French reactor leaks
As you know, drilling was ordered in July 2008 under all 58 French reactors to sample the groundwater for radioactivity, after a spate of leaks. The Nuclear Safety Authority has accused Areva of "human negligence" and "dysfunctional" processes. Areva insists there is no threat, but the Safety Authority's findings were passed to the prosecutor's office, which may decide a criminal investigation is required. Could this happen? I need hardly add that it would be a major setback if it did so just as we try to raise money.
2. Cracks in French nuclear consensus
Polls showed in September 2008 that although two thirds of the French do not think there should be a reduction of nuclear power, 49% of those under 35 believe the share should be reduced because of the dangers involved. The independent nuclear inspectorate created two years ago now posts all nuclear incidents on its website, and there are 800 a year. An official says: "people are beginning to realise that incidents are frequent." Is this unhelpful trend likely to continue, do you think?
3. French nuclear industry safety professionalism
I ask because the director general of STUK, Finland's radiation and nuclear safety authority, said in a letter that some of Areva's experts have a "lack of professional knowledge" that is slowing the Finnish Olkiluoto 3 plant down. Areva says this won't cause additional delays, but admits the reactor - already 3 years overdue - still has no definite opening date. The Finnish reactor, and the one at Flammanville, are the only two examples we have of next-generation reactors under construction, and it will make fundraising very difficult if they continue to suffer delays and allegations like this. How do we honestly view the ability of the French industry to deliver new reactors safely for us please?
4. UK nuclear industry safety professionalism
In June, a report by the government's chief nuclear inspector to the Health and Safety Executive revealed the tally of UK nuclear leaks and other safety events in the last 5 years. I was devastated to find that it is fully 1,750. About half were serious enough "to have had the potential to challenge a nuclear safety system." Moreover, the Nuclear Installations Inspectorate (NII), charged with overseeing all such problems, has an acute staff shortage. The HSE for its part wants to create "exclusions" in its assessment of new reactor designs, in order to streamline the process. What are these exclusions please? I am not sure it will play well for the industry's regulator to be seen to relax on safety just as we try to raise capital.
5. British nuclear industry terrorism risk
In January this year a radioactive leak, undiscovered for 14 months, was found at Sellafield the day before a visit by the Prime Minister, so Nuclear Management Partners (who run the site) have recently volunteered. A board of enquiry concludes the leak went un-noticed because "managerial controls over the line were insufficient and there was inadequate inspection." Meanwhile, elsewhere on the site two containers of highly radioactive material have gone missing. NMP says it is most likely that "the anomaly lies within the accounting procedures", and the lost containers are still somewhere on site. "Environmental and public safety has not been compromised," they say. What if any guarantees do we have that there are no terrorists working undercover in the accounts department, or indeed anywhere onsite at Sellafield? Or ordinary workers potentially persuadable to traffic nuclear materials?
6. Thorp shutdown, and paying for the existing nuclear clean-up
In May, Sellafield Ltd admitted its £1.8bn nuclear reprocessing plant cannot meet NII orders for operation as a result of continuing technical problems. Two of the plants have been breaking down repeatedly, and the third has been closed after a rise in radiation levels. Work has started on a new £100m evaporator, but it is behind schedule, and probably won't come on stream before 2013. Germany may sue when spent fuel is not returned reprocessed. Closure of the plant would slow decommissioning of British nuclear plants, and remove much of the £70bn needed for that process, which reprocessing at Thorp was supposed to raise a good deal of. Who is going to have to pay for the £70bn now? Obviously, I need it to be the British people, and not the investors I am trying to target to bankroll our new plants. We ideally need the British government to confirm that this is true, and I am concerned that after bailing out the banks the British people might be resistant to this.
7. Waste disposal
The new operators of the Drigg nuclear waste disposal site, LLWR, have found that records are completely inadequate and are looking for workers from the 1960s through 80s who might be able to help them fill in the holes, so to speak, about what was dumped where. Almost incredibly, I have learned they are using adverts in the local press for this purpose. This is clearly a grave embarrassment, when it comes to facing investor questions about how we intend to handle the unresolved questions about waste disposal and its costs. What can be done to improve this part of our story please?
8. Embarrassment by body parts
In April 2007, the UK government announced an independent inquiry into claims that body parts of workers who died in suspicious circumstances at Sellafield and other nuclear plants, were taken without consent, over a period back to the 1960s, for medical examination. BNFL admits this but says the practice stopped in the 1990s. What do we know about this enquiry please? It seems to me that it poses another potentially major embarrassment to our fundraising effort.
9. Playing the game with a straight bat
In June, the NII seconded staff from Bechtel, CH2M Hill, and Amec - companies hoping to build the new generation of nuclear reactors as you know. The NII hopes that the hires will get the review of designs back on schedule for mid 2011, and that any conflicts of interest can be dealt with in secondees' contracts. Technical staff have also been hired from Areva, one of the two companies offering designs for new reactors. The NII says they will not be allowed to work on the Areva designs, but I fear this holds the potential to be another untimely embarrassment in the form of accusations that the nuclear industry is cheating. How can we alleviate this risk please?
10. Timing
Finally, I have one personal concern about the policy story behind our case for fundraising. We major on the need for nuclear to contribute in fighting global warming and building energy security. Yet by our own admission we cannot bring the first new reactor onstream before 2018, if then. Experts are saying we need to be on track for deep cuts in emissions well before then, which rather suggests that renewables and energy efficiency - taking as they do far less time to bring into operation - will have become the emissions-reductions tool of choice. As for energy security, numerous old coal and nuclear plants need to be shut down in the middle of the decade. So we can't help with keeping the lights on either, in the short term. What is the best way to answer this timing conundrum please?
I do have other concerns, but these are my top ten. Can you offer me any comfort on these issues please?
Jeremy Leggett is chairman of Solar Century, solarcentury.com
More material on this subject is available on his site: www.jeremyleggett.net
