The Grand illusion

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A few days ago, inspectors granted new life to Bradwell, one of the first generation of British nuclear power stations built on the obsessions of the Cold War and lately condemned to the scrapheap. It opens a new chapter in a 40-year saga that has generated a modest amount of subsidised electricity, heavy and continuing costs, a poisonous legacy and growing ill-will. And the price of these follies of authoritarian rule will still be paid for generations to come

ON THE PLATFORM on the top of Reactor 1 at Bradwell, an old nuclear power station rising out of the Blackwater estuary on the Essex coast, there is a machine called the Snake. It is a 35ft remotely handled, articulated probe, which was lowered last month into the reactor pressure vessel and then, painstakingly, man-

oeuvred into place on one of the ducts that takes hot gas out of the reactor. Through the Snake's television camera, the gas duct fairing looks indescribably strange and remote, like an unborn child in its amniotic fluid.

The Snake was built, at a cost of pounds 95m, to make ultrasonic inspections of the welds holding the gas ducts to the wall of the vessel. It is these welds that the British Government's nuclear inspectors want to be sure are not vulnerable to cracking, which might leak radioactive material into the air or even, conceivably, lead to catastrophic failure of the vessel.

Bradwell is one of a group of British nuclear power stations, known as Magnoxes, which were built at speed in the late Fifties and Sixties and given an initial life-span of 30 years, after which they would need new certifications. Essentially prototypes, they were designed with wide margins of error; wandering around them, you keep coming on evidence of designers' caution, such as four-inch-thick steel plates at the top of the pressure vessel, low heat and pressure ratings, redundant pieces of circuitry.

Unfortunately, the Magnoxes were ordered before there was any worthwhile experience of the effects of irradiation on steel. It is clear from the 1960 safety report on Bradwell that the Atomic Energy Authority's engineers knew that neutron activity inside the pressure vessel would make the steel less ductile (or elastic) and more brittle. 'No current inspection gives infallible coverage,' it says, 'and crack initiation is possible during the vessel life.'

The designers had the idea of suspending specimens of steel and weld material in baskets in the reactors, which could then be taken out and tested at intervals. At the end of 1990, tests at Trawsfynydd, a station in North Wales, showed striking signs of embrittlement. The station was shut down and the Nuclear Installations Inspectorate warned that none of the remaining four stations with steel pressure vessels - Bradwell, Dungeness A, Hinkley Point A and Sizewell A - could operate beyond the end of 1991.

Nuclear Electric managed to persuade the inspectors that Trawsfynydd was a special case, and it is now seeking permission to raise the gas temperature in the reactors to increase the ductility of the steel. For Bradwell, the inspectors demanded additional assurances about the state of the vessel if the station was to run beyond its 30th birthday. Nuclear Electric was unable to get the Snake built and in place on time, so the reactors were shut down. But last week Reactor 2 was cleared for restarting.

The Magnoxes are old, low-powered and, by most definitions, fabulously uneconomic: they are relics of the Cold War, pieces of British scientific vanity. The seven remaining stations could be taken off the grid without so much as a light bulb flickering. On a good day, Bradwell lights the towns of Chelmsford, Colchester and Southend-on-Sea. Yet Nuclear Electric is spending pounds 100m to keep them operating. To understand why it is doing this, it is necessary to descend into the dim and aqueous world of British nuclear economics.

THE STORY of Bradwell begins with a bomb, or rather two. Scores of British scientists worked on the Manhattan Project, but in 1946 an Act of Congress excluded foreign nations from further US nuclear research. To build a British bomb - seen as indispensable to Britain's prestige in its dealings with the US - this country was thrown back on its own resources.

The nuclear scientists at Harwell in Oxfordshire devised an experimental technology that produced bomb-grade plutonium in a reactor from natural uranium rods housed in a magnesium alloy ('Magnox') can. If the carbon dioxide gas used to cool the reactor core was passed through a steam boiler, it could generate, as a by-product, a modest output of electrical power.

By 1953, the government was fretting about the prospect of coal shortages and the muscle of the National Union of Mineworkers. That spring, it ordered a dual-purpose - power and plutonium - Magnox reactor for a site at Calder Hall, just across the beck from Windscale on the Cumbria coast, where there had been a TNT factory during the war. In the control room at Calder Hall, among the antique dials and the trademarks of defunct suppliers, there is a scuffed plaque to record this British triumph: On the 17th October, 1956, Her Majesty Queen Elizabeth II graciously opened Calder Hall, the world's first full-scale nuclear power station. In the photograph, the Queen is pretty as a picture. The brilliantined scientists look like cats that have got at the cream.

Even before the reactor was generating power, a working party proposed that enough was known from the military programme to justify the building of new reactors optimised for electricity: two in 1957, two in 1959 and eight in the 1960s, for a total capacity of 1,700 megawatts by 1965. The looming fuel shortage, it said, justified 'taking a calculated risk on starting a programme whose later stages might become economic'.

The Treasury White Paper, published in February 1955, shows a typical economy with the truth ('. . . no more dangerous than accidents in many other industries . . . volume of waste will be small . . . valuable export trade . . . experience gained by British industry . . .'). The White Paper accepted that nuclear power would be much more expensive than coal electricity, and to solve the problem it proposed setting against it the income from plutonium created in the Magnoxes - a 'potentially valuable material' for use in weapons or as fuel in a future fast-breeder reactor, which was supposed to be commercially possible from 1965. This 'plutonium credit' brought the cost of Magnox electricity down to just over a halfpenny per unit. Coincidentally, this was the estimated cost of coal-fired power. Nowhere in the White Paper, or in any other document I have seen from this period, is there mentioned provision of any cost in dismantling the stations: let alone that it might equal the cost of building, and might therefore make Magnox power forever uneconomic.

At a press conference on 15 February, 1955, Geoffrey Lloyd, the Minister of Fuel and Power, made clear just what the Magnoxes meant for this generation of men: 'Here is new scope for our traditional genius . . . for mixing a small proportion of imported materials with a large proportion of skill, ingenuity and inventiveness. This was one of the secrets of our success in the nineteenth century. Our nuclear pioneers have now given us a second chance to lead another industrial revolution in the second half of the twentieth century.'

With most of the generating capacity sitting on northern coalfields, sites were sought in the South of England: on estuaries with plenty of water for the steam circuit, and away from large towns. In October 1955, Bradwell in Essex and Berkeley on the Severn were announced as the first sites.

The plutonium dream soon proved an illusion. A portion of the first fuel charges at Berkeley and Bradwell was almost certainly reprocessed into military-grade plutonium for barter with the US, but that was the limit of their Cold War service. The fast-breeder reactor, which was supposed to use plutonium as its fuel, proved elusive. Two prototypes were built at Dounreay and Caithness, but after at least pounds 4bn spent on British research, a commercial station is not in sight.

As generators of power, rather than plutonium, the Magnoxes were inevitably inefficient. The early stations ran at such low gas outlet temperatures that they had to use pre-war turbine technology. Even so, in 1971 it was found that the hot carbon dioxide gas had corroded steel elements supporting the reactor cores, and all the civil Magnox stations but Berkeley were downrated. The present capacity of the Nuclear Electric stations is about 3,200 megawatts, out of a total plant capacity for England and Wales of about 62,400 megawatts.

The Magnoxes could have lived this down. Though Bradwell cost pounds 60m to build, twice its estimate and four times the cost of an equivalent coal station, it might eventually have paid its building cost: the payback period simply had to be extended from the original 15 years. But in the course of its operations, two new problems have arisen: the rising cost of reprocessing the fuel at Sellafield, and the requirement that sites of nuclear stations must eventually be restored to green fields.

In relation to the amount of electricity they generate, the Magnox stations have produced a vast amount of waste. 'The British Magnox programme,' Walter Marshall, a nuclear engineer who was chairman of the Central Electricity Generating Board, said in May 1990, 'has probably produced more nuclear waste than all the rest of the world put together.'

This didn't much matter when the spent fuel could be treated through ex-military factories at Sellafield as part of a secretive and authoritarian government establishment. An accident in 1973, when Magnox fuel rods corroded in a pond at Sellafield and the contaminated water had to be released into the Irish Sea, set in train a series of reforms at British Nuclear Fuels. It had to spend around pounds 2bn, and it sought to recover the cost from the utilities. Between 1980 and 1988, the charge for reprocessing Magnox fuel rose five-fold after the effects of inflation, according to evidence presented to the House of Commons Energy Committee. Exasperated by BNFL's extravagance, the CEGB and the South of Scotland Energy Board negotiated fixed-price reprocessing contracts.

Margaret Thatcher's first government came to power in 1979, glowing with enthusiasm for nuclear power, and blissfully ignorant of it. In December of that year, David Howell, the new Secretary of State for Energy, announced Britain's third nuclear programme: investment of pounds 15bn to install 15,000MW of nuclear electricity, one station a year for 10 years. For recklessness, the Howell programme matched even its two predecessors; but it finally broke with the ill-starred but British gas-cooled technology: the new reactors were to be an off-the-peg US design, using water coolant and known as Pressurised Water Reactors.

This programme, which was soon cut down to Sizewell B and three more PWRs, had to be squared with a commitment in the election manifesto to denationalisation. The City - or rather the CEGB's investment bankers, Lazard Brothers - was horrified by the open-ended costs of reprocessing fuel and taking down the stations. The fixed-price contracts revealed the full scope of the cost increases at Sellafield: at one point, the CEGB told the Department of Energy that the all-in cost of Magnox electricity was 10.5p a unit, about 40 per cent above the current retail price of electricity.

Amid chaos and recrimination, and fierce rivalry between Lord Marshall and the then Energy Secretary, Cecil Parkinson, for Mrs Thatcher's favour, the entire electricity privatisation project threatened to founder. 'Cecil simply wouldn't go and tell Mrs T the nuclear stations couldn't be done,' said a senior civil servant. In despair, the Magnoxes were taken out of the sale in July - but still the City said no. It wasn't until the autumn, after Parkinson had left the department, that his successor, John Wakeham, told the Prime Minister that the government must retain the nuclear stations, and that the Howell programme (apart from Sizewell B) should be dropped.

To own the unwanted nuclear stations, two new state companies - Nuclear Electric and Scottish Nuclear - were formed. The government wrote off pounds 1.4bn of Scottish Nuclear debt and gave Nuclear Electric the nuclear levy or premium, which was designed to allow it to generate electricity without recourse to the taxpayer. This levy, which provided Nuclear Electric with pounds 1.3bn or more than half its revenue last year, is a tax of about a halfpenny a unit on English and Welsh electricity bills (a London family might pay about pounds 40 a year). Wakeham ordered a wide-ranging review of the industry for 1994, when the general election would be long past, Sizewell B would theoretically be generating, and he would be in retirement.

To crown the whole fiasco, the European Commission balked at the nuclear levy as a distortion of competition and restricted its life to eight years.

THE WHOLESALE price of electricity in Britain is about 2.3p per unit. The Magnoxes generate electricity at about 4.2p a unit, according to Nuclear Electric. The difference is made up by the levy. So running these stations is simply a waste of the public's money.

Nuclear Electric has a subtle response to this. It says it is helpless before the past and the future: it exists in a sort of zero present. The cost of building the stations and taking them down, of reprocessing the fuel and decommissioning the Sellafield factories - all those things that make the Magnox stations so ludicrously expensive - must be paid whether the stations operate or not.

The extra cost of generating power from the stations (mostly wages) is, according to Mike Kirwan, Nuclear Electric's finance director, 1.2p a unit, comfortably below the wholesale price of electricity, which is about 2.3p. On this accounting basis, the Magnox stations generate a cash profit of about pounds 200m a year. The cost of the Snake and the various other safety measures the inspectors have requested is, at most, pounds 100m. John Hall, the works manager for reprocessing at BNFL, put it like this: 'Since you have to meet these huge costs in the future anyway, you might as well generate some electricity and make some money on the way.' The stations that have shut down had peculiar economic handicaps: Berkeley, in Gloucestershire, which closed in 1989, needed to rebuild its fuel crane, while Hunterston A, on the Clyde, had to sell power into a grossly oversupplied Scottish electricity market.

The second reason Nuclear Electric needs Bradwell is that if it had to close, Nuclear Electric would find it hard to justify continuing to run the other steel-vessel stations: the company would be dying from the feet up just when it is trying to persuade the Government that it can operate Sizewell B and should build Sizewell C (or Hinkley Point C or wherever). BNFL, which has staked its future on a vast new factory, costing at least pounds 1.85bn, to treat fuel from advanced gas reactors and water reactors and known as the Thermal Oxide Reprocessing Plant (or 'Thorp'), has a similar problem. 'It is absolutely vital to the company's future,' said Alan Irving, the press office manager at Sellafield, 'that we have the cushion of Magnox reprocessing until we can bring Thorp on.' Magnox reprocessing is by far BNFL's largest source of income, amounting to pounds 397m last year.

If all the steel-vessel stations closed now, it is argued, there simply might not be enough space in the cooling ponds or enough of the reinforced steel railway cars known as flasks to take the downloaded fuel to Sellafield. Simply to take the core out of the Berkeley reactors took from June 1989 to March 1992, and involved the most imaginative juggling of pond space, flask deployment, dose limits to workers, British Rail scheduling, and so on. It certainly would be expensive.

Finally, the stations have to earn the cost of their decommissioning. Originally, under the CEGB, the Magnoxes were to be dismantled and their sites restored to green fields. This was to be in three stages: defuelling, which might take five years; dismantling all the plant outside the concrete shield around the reactor pressure vessel, which might also take five years; and, about 90 years later, the removal of the reactors and all radioactive material. In 1989, the CEGB thought this would cost about pounds 600m for each Magnox station - or roughly what they cost to build in the first place, once adjustments are made for inflation and changing safety requirements.

But this immense sum can be reduced through an elegant accounting theory known as 'present value'. A debt of pounds 100 10 years from now is the equivalent today (or has a present value) of only about pounds 40, because this pounds 40 lent at interest will grow to pounds 100 over the 10 years. For Nuclear Electric, which employs an interest or discount rate of inflation plus 2 per cent, the discounted cost of dismantling the Magnoxes in 1991 money was pounds 2.1bn, according to Fred Passant, its manager for waste and decommissioning.

Nuclear Electric is now trying to get permission from the Department of Trade and Industry (subsuming the old Department of Energy) to turn this strategy on its head. It now believes that it should defer stage two - dismantling the external plant - until 35 years after the reactor is shut down, during which time the site will need barely more than a dozen security guards and occasional visits by maintenance contractors. At Year 35, reactors and boilers will be sealed in brick and concrete and then left, under the lightest of surveillance, for a further 100 years. At Year 135, the faintly radioactive plant will be entombed in coarse sand dug out of the Blackwater estuary or barged in. Trawsfynydd, being inland, on an artificial lake, may be covered in quarry slate.

This strategy, which is known as Deferred Safestore, is tentative. Among its advantages is that after 135 years, much of the radioactive material will have decayed, leaving only some very long-lived silver and nickel isotopes: human beings will be able to work for quite long periods with the reactor. But the main advantage is, of course, financial. Even at a 2 per cent discount rate, over 135 years the present value of decommissioning a station collapses. At present, Nuclear Electric is putting aside in its accounts the grand sum of just pounds 5m per station per year. If the new strategy, or one similar, is approved, this sum will be even lower. Such is the alchemy of science and the

magic of compound interest.

I'VE DONE my best with this strategy, but it has weaknesses. First, there is no assurance that present or future governments in Britain will permit Nuclear Electric or its successors to litter southern England with lightly radioactive barrows; especially as Bradwell and Dungeness A may well eventually find themselves in the inner suburbs of a British megalopolis. Large sums of money may be required much earlier.

Second, the provisions against decommissioning are not being invested in risk-free securities outside the industry - say, in index-linked government stocks - but in measures to keep the Magnoxes going and fix the AGRs, and in building Sizewell B. The new station may earn some money, but it's worth saying that not a single British nuclear power station has ever been built on time or near its original estimated cost, or generated any profit in any recognisable sense.

Third, it is possible that the Government will allow Nuclear Electric (alone or in a consortium) to build another station in 1994, but it is not very likely. According to the National Grid Company, the country will be saddled with surplus generating capacity of 56 per cent in the winter of 1995-96 if all proposed power stations are built. Obviously it won't come to that, but something has to give and it won't be coal, which the Major Government wants to privatise. 'It's going to be very hard for a government committed to competition to approve massive new investment by a subsidised generator,' a senior Government official said.

All this suggests that our children's children's children will not only be stuck with the radioactive remains of power stations whose electricity they never enjoyed; we won't have left them any money to take them apart or entomb them.

Nuclear Electric faces a serious problem much nearer in time. The levy on electricity users is set to run out in 1998 (and anyway will not cover Sizewell B). Last month, the company vowed it would be operating profitably without the levy by 1995. This requires Nuclear Electric to cut its costs by pounds 780m a year. In order to do this, it is drastically cutting staff (by 3,000) and raising output: not, perhaps, an ideal combination in an industry such as nuclear power generation.

More plausibly, the nuclear industry is going to try to convince the Government that nuclear power deserves favoured status because, unlike coal-fired power stations, it does not generate carbon dioxide, the chief greenhouse gas, seen as the main culprit in global warming. This is a wildly opportunistic argument, but it has merits, and it would be even more convincing if Nuclear Electric stopped generating nuclear waste through the Magnoxes.

According to John Hall of BNFL, there are 9,000 tons of spent or partially spent Magnox fuel backed up in ponds at Sellafield and at the stations, in transit or in the reactor cores. If the Magnox stations go on generating to 2001, this will rise to at least 16,000 tons; and Sellafield will still be treating the stuff five years later. And what will the exercise have produced? An insignificant amount of subsidised electricity, some uranium at many multiples of the world market price, a little worthless plutonium, highly perilous fission products and a vast amount of contaminated metal and sludge,

irradiated buildings, acres of low-level waste and immeasurable suspicion and ill-feeling.

The Cold War is over. The authoritarian state, which created and then protected the Magnoxes, was shattered by Thatcherism. But they continue, cocooned in subsidy and government indifference, old, useless, British.-

(Photograph omitted)

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