Why British Nuclear Energy Failed

the story of nuclear power in the united kingdom is one of bad economics and missed opportunities the british were a nuclear pioneer and their government saw civilian nuclear power as a way to diversify the country's energy mix but a series of bad technical decisions took the industry down the wrong path things got nasty in this video we're going to look at why nuclear power melted down economically in the united kingdom but first the asian army patreon early access members get to watch new videos and selected references for them before their release of the public it helps support the videos and i appreciate every pledge thanks and on with the show in october 1952 the united kingdom exploded its first atomic bomb the third country in the world to do it the event was a monumental british achievement having been done largely without american cooperation after the war ended after the detonation success people started thinking about other ways they can harness their nuclear development knowledge for the benefit of mankind it was a time of optimism in contrast to the horrors of the atom bomb scientists felt that civilian nuclear energy had the potential to revolutionize britain's energy industry in those days the country's great oil and natural gas fields offshore in the north sea had yet to be discovered so britain was almost entirely dependent on its indigenous coal mines for power and heating the winters and early 1950s britain were harsh but working the coal mines is hard work and it was getting increasingly difficult to find people to do it in 1953 churchill announced a new public agency to take control of and manage all of the country's nuclear development efforts a year later the uk atomic energy authority or uk aea was established at its creation the aea held monopoly control of all nuclear r d in the united kingdom and was also the de facto source for all nuclear information to the political classes this is in contrast to the united states in which private entities like general electric and westinghouse participated in nuclear r d in order to make a bomb you need radioactive raw materials throughout the late 1940s and early 50s the united kingdom set up several plants to produce enriched uranium and plutonium at large scale these reactors had been built with the military's needs in mind the stated purpose was to produce military-grade plutonium and other radioactive materials they can generate power but with more unfavorable economics and costs in 1954 the aea drafted a plan to build a series of nuclear power stations generating about 1 700 megawatts by 1965. the designs would be based off a nuclear power station right then still being built at calder hall queen elizabeth ii eventually commissioned calder hall in october 1956 saying this new power which has proved itself to be such a terrifying weapon of destruction is harnessed for the first time for the common good of our community at the time the united kingdom saw this development as a great british achievement that same year egypt nationalized the suez canal in late october 1956 the british french and israelis attempted to seize the canal with an invasion triggering the suez canal crisis the whole thing was a diplomatic blunder and a national humiliation best of times worst of times the suez crisis also cast substantial uncertainty on global oil supplies and whether britain can get enough of it spurred on by public opinion the incoming harold macmillan administration emphasized the need for energy independence it was the perfect political environment for the advancement of nuclear power in britain thusly the uk aea expanded their nuclear power program up to five to six thousand megawatts or about 19 stations considering nuclear's overwhelming political support the british electricity industry decided not to oppose the plan despite a few concerns about the economics if all the stations arrived on time in 1965 then they can provide a quarter of the country's energy needs and replace some 18 million tons of burnt coal each year the whole thing was estimated to cost about 750 million british pounds these reactors would use a magnox design magnoc standing for magnesium non-oxidizing before we move on i think we should talk a little about the magnox design reactors are largely classified by the two factors in their construction one the coolant used to carry heat out of the reactor core and two the moderator used to control the energy level of the neutrons in the reactor core at the time there were three types of nuclear reactors out there closest to commercialization light water reactors heavy water reactors and gas graphite reactors the magnox was based on calder hall's gas cooled graphite moderated reactor design with a few additional modifications today we consider it a first generation reactor the manhattan project used a light water reactor to generate plutonium but due to corrosion related safety concerns as well as issues in sourcing enough pure water the british military opted to build air-cooled graphite reactors this decision had far-reaching consequences down the line for the british civilian nuclear power industry while gas cooled and heavy water reactors can potentially be safer than light water reactors the amount of power they output for the space they take up is lower this is measured in something called thermal efficiency the higher the thermal efficiency the hotter the steam going into the turbine is and thus the more electricity generated for a given fuel cost in 1957 the british electricity industry was reorganized creating the central electricity generating board or cegb the cegb would control electricity generation and the national grid in both england and wales for over 40 years it was through the cegb that the british electricity industry first began to push back against the aea's nuclear rollout in its early years the aea had special autonomy and strong political backing so they had the heft to throw their weight around but times had changed the cegb's senior members began pointing out nuclear's economic uncompetitiveness against other energy sources such as coal as it turned out the suez crisis effects on oil prices did not last new oil fields were discovered and larger container ships made it economically possible to sail around africa it became harder to advocate for spending so much money on nuclear when both coal and oil were getting cheaper even when using the cegb's more optimistic estimates nuclear cost up to 25 more than coal in areas where coal was cheap that cost differential went up even higher to 40 percent such pressures from the cegb and the treasury eventually forced the government to dial down the magnocs program a bit and pushed back its deadline a few years in total 26 stations were started up between 1962 and 1971 producing about 4 200 megawatts of power the uk aea's post-suez expansion plan was a bold move to say the least many of the critical early technical decisions behind the magnox rollout had been made by a few core individuals without much thought to economic concerns as a result magnox ended up overrunning its early estimates being about 10 to 20 percent more expensive and taking 40 percent longer than plan this is before taking into account several other significant costs like decommissioning costs higher interest rates and r d costs the united kingdom had rushed the plan into action far too quickly calder hall itself had just started operating less than six months earlier and now they were massively scaling up production of the design builders had not fully understood the design before building the next stations furthermore the uk put together five different consortiums to build the power plants as a result each power station was essentially a snowflake lacking in standardization and thus missing out on any potential efficiencies of scale in contrast consider the semiconductor industry and the 300 millimeter wafer fab transition to smooth out construction the industry got together and standardized virtually every part of the construction down to the wafer carriers cutting time and expense in the build this didn't happen here the design of the berkeley power station was probably the closest to calder hall but changes were made to add on load refueling the ability to refuel while the power station is still operating but berkeley calder and its cohorts had thermal efficiencies substantially lower than what was needed to generate enough power so sizwell and bradwell added more boilers and raised the coolant pressure oldbury for its part added a concrete pressure vessel as an additional measure against catastrophic failure but this in turn required substantial re-engineering to insulate the concrete from the high temperature gas and so on you get the point at the same time interest rates started to rise nuclear power plant construction takes a long time and is very capital intensive which makes them extremely sensitive to interest rate movements the higher rates are the harder it is to make a required rate of return in the late 1950s they assumed a six percent interest rate later raised to 10 percent this was probably too low interest rate estimates over in the united states at the time were about 14 percent capital costs alone added 360 million british pounds to the construction costs of seven nuclear stations between 1962 and 1966. the cegb passed these higher capital and construction costs directly to the consumers electricity generation prices for the aforementioned berkeley and bradwell plants rose from the original 150 pounds per kilowatt to 160 pounds and that was before construction even started and lastly the gas cooled design originated from the british military as i mentioned such reactors were better for making plutonium than economically generating power the uk aea for their part argued that this was a feature not a bug at the time the british military was building up its nuclear arsenal to deter the soviets about 50 to 200 atom bombs these power plants can sell them that plutonium for extra cash back in 1955 this made sense plutonium back then cost hundreds of times its weight in gold but new supplies from canada and the united states crashed the market and you cannot exactly sell this stuff abroad so this tactic didn't work out considering all this stuff that didn't work out a 10 cost and 40 time overrun isn't all that bad overruns happen all the time including with fossil fuel stations most people recognized that the magnox program had strategic and political goals rather than economic ones it established the united kingdom as a nuclear energy pioneer furthermore the actual stations themselves despite being a little underpowered perform well and stayed out of trouble throughout their operating lifetimes so all in all probably worth it as the magnox program started to wind down the uk government launched a second generation nuclear program in april 1964 to replace it in it they proposed another 5 000 megawatts of nuclear plants to be constructed from 1970 to 1976 three consortiums submitted tenders for the first plant in this series an expansion to a magnolic site dungeness bee like the crab using various reactor designs the cegb was given the task of deciding between continuing with the gas cooled magnox style reactor design or adopting an american light water design the uk aea advocated for their gas cooled design however at the start the cegb seemed skeptical their experience with the magnox gave them concerns that there were serious design limitations the issue was that the uk government wanted to eventually export their british native reactor designs abroad but the international community was increasingly coalescing around american style water cool designs why should foreign countries adopt the aea's designs if the country's own domestic power industry won't and for additional background the new labor government was reeling from the british military recently cancelling the british tsr-2 advanced aircraft and instead adopting an american f-111 so while the cegb was supposed to have autonomy in choosing which reactor to use the uk government certainly had its own preference then at the end of 1964 the cegb director sir christopher hinton retired he was known to be a nuclear power skeptic and after his retirement cegb's attitude towards the gas-cooled reactors noticeably shifted like i mentioned three consortiums eventually submitted tenders for dungeon sb the first two english electric and nuclear power group preferred american water-cooled designs these two were backed by solid companies but during the pricing evaluation stage of the tender selection process the uk aea engaged a third consortium for technical consulting atomic power constructions atomic power was experiencing financial difficulties after losing a tender for the last magnoc station basically near bankrupt during this technical consultation job atomic power briefly evaluated the possibility of doubling the rods from the original gas cooled design in an apparent hail mary they threw in a last tender based on this possibility the cegb decided to choose this third tender which surprised some people to back their decision uk aea and cegb explained that under british conditions the gas-cooled dungeness plant would produce energy for seven percent less than competing american water cooled designs and so in may 1965 came the official recommendation to move forward with the advanced gas cooled reactor or agr the other consortiums would have to build agrs too minister for power fred lee told the house of comments i am quite sure we have won the jackpot here we have the greatest breakthrough of all time as it turns out the agr was flatly the wrong choice the models told rosy stories based on unrealistic assumptions atomic power had stretched beyond what it was capable of doing in an effort to secure the tender the consortium collapsed in 1969 leaving the aforementioned english electric to pick up the pieces the uk aea and cegb did not immediately release the work behind their seven percent cheaper argument as it turns out the key term in what they said was british conditions two essential financial model assumptions the first faulty assumption was again the capital costs they were once more way too low compared to contemporary american projects despite using a less proven design the second assumption was that the agr would be able to run for more days than the american designs because they don't have to turn off for refueling on load refueling which i mentioned earlier this assumption was faulty because they had not actually tried to do unload refueling on a fully sized agr it had worked on a little prototype with a capacity of 33 megawatts but that was multiple smaller than the proposed build out when they first tried it on a fully sized agr the reactor started vibrating so much that three fuel elements broke into pieces it would take over 20 years to fully achieve this by 1967 less than two years after approval people started to realize that the agr design was not ready the engineering challenges ahead were found to be immense the reason why the agr was supposed to perform better than his magnoc's predecessor was that it operated at higher temperatures which in turn means a higher thermal efficiency at about 40 percent however engineers discovered that the higher temperatures corroded the previously used magnesium cladding around the fuel over 10 million pounds were spent testing for alternatives first beryllium which was discarded because carbon dioxide corrodes it and then stainless steel steel required further engineering work because of its nuclear properties but that was deemed an unavoidable cost another serious issue had to do with the use of graphite to moderate the nuclear reactor and high enough temperatures and radiation loads the graphite cracks which is a big problem to keep the graphite relatively cool a new coolant circulation system had to be devised engineering difficulties at dungeon sb continued the first reactor finally started generating power in 1983 18 years after work started the power station did not reach full capacity until 2004 38 years after start the dungeon sb debacle would stand as a lasting symbol of the uk's struggling nuclear industry the other agr stations a total of seven were built from 1979 to 1986 went up with far less troubles but still suffered cost and time overruns an estimate published in 1977 by economist pd henderson found that the agr debacle cost the country about 2.1 billion pounds in 1975 currency today that would translate to about 20 billion pounds and remember this was published in 1977. dungeon sb had another six years to go before generating electricity the costs were to go even higher than that at the heart of all these manufacturing issues labor unrest and construction delays was the fact that the agr design at its outset was fundamentally flawed this round of power station construction left the country with a bunch of economically uncompetitive stations the discovery of massive oil and gas fields off the north sea presented new economic challenges to nuclear but the nuclear industry's most formidable challenger was coal coal and nuclear energy are close substitutes the coal industry was already on its way out it would shed 315 000 jobs throughout the 1960s but they weren't going without a fight recognizing the threat to their livelihood the british coal industry and its increasingly militant labor unions became nuclear's biggest critic these criticisms were of course partisan but were also based in economic realism and offered a dissenting voice in a time when almost everyone was taking the uk aea's estimates at face value luckily enough the oil crises of the 1970s the fourth arab israeli war and a series of minor strikes still reminded the british of the dangers of an energy mix without nuclear the agr build-out was a failure but that did not mean nuclear energy itself was the uk government again wanted new stations but what reactor designed to use again another set of endless debates between the agr and the american water cooled reactor designs they eventually chose the latter by now the british public endured years of delays and broken promises it is not surprising that they started to lose their faith and optimism in their nuclear energy industry something had gone wrong somewhere in 1979 margaret thatcher and her conservative government came to power personally she supported nuclear energy she liked that it didn't emit greenhouse gases and that it provided a hedge against the coal industry also as a scientist she personally admired the technology behind it so it is a little ironic that her policies would have such lasting effects on the country's nuclear industry as energy security concerns faded going into the 1980s her government sought to reduce its involvement in energy policy at the start her administration believed that nuclear generated electricity more cheaply than any other method out there something her officials have said more than a few times so it would have no problem with this new market liberalization right in the early 1980s the government announced new build plans for a series of pressurized water reactors carrying on the technical decision made by the previous labor government the first of these stations size well b was started with four more ahead of it thatcher won office in 1979 promising only to privatize state enterprises like british steel but after two terms the biggest thing left to privatize was the 37 billion electricity supply industry thusly in 1987 thatcher won her third straight term promising to privatize the electricity supply industry while also securing its nuclear future the problem with that promise was that the uk's 11 completed nuclear plants 9 magnoxes and two agrs and six other ongoing construction projects were not economically competitive the 1980 saw massive changes to the market environment oil prices had greatly fallen from their peaks in the 1970s the government had broken the back of the coal workers and the united kingdom had started to use gas-fired power stations considering the market competition the size will be nuclear power plant would never have passed an investment review at british gas or british coal even before those two companies were privatized worse yet the nine first generation magnox reactors were nearing the end of their operating life with that would come immense decommissioning and waste disposal costs about 600 million pounds for each magnox analysts argued that the nuclear power stations had to remain under public control as the government began breaking up the venerable cegb it realized the same thing no private shareholder would take on these liabilities in late 1989 the entire nuclear portfolio was withdrawn from privatization two new companies were created to hold and manage the stations nuclear electric owned the english and welsh nuclear power stations with scottish nuclear limited owning the scotland stations work on size well b continued halting it would have been a loss of face for thatcher but the three other water-cooled reactors on the plan were taken off thatcher wanted them believing that nuclear was a critical tool in the fight against global warming but the treasury refused to go along the withdrawal from privatization was a national humiliation for the british nuclear industry an admission that decades of favorable costs estimates and statements by various energy officials was false but the night is darkest just before the dawn over the next few years the two companies improved their agr reactors and successfully introduced new management practices the two companies also shut down their oldest reactors negotiating fixed prices with the government-owned company british nuclear fuels limited for the cost of disposal this removed a lot of uncertainty about the company's future liabilities the industry's reputation and financial performance improved by 1995 scottish nuclear turned a 182 million pound operating profit nuclear energy had an operating loss of 33 million pounds but that was due to a one-off pension cost thusly in 1995 the government finally privatized the two companies combining seven of their newer agr nuclear power stations into a single company british energy the magnoxis would be hived off into another company for future decommissioning however it was not a complete victory scottish nuclear and nuclear energy had hoped that it would be able to complete some of the other water cool plants to come after size well b but the uk government made it clear that it would not support and subsidize such a decision this essentially marks the end of the indigenous nuclear power industry in the united kingdom in part due to bad financial management and rough market conditions british energy later suffered financial troubles in 2002 and required a 650 million pound bailout by the british government it was later acquired by a french power company and renamed to edf energy looking back at it the british should never have stuck with the gas cooled route perhaps overvaluing its indigenous origin and britishness it wasted a time of nuclear optimism and crippled an industry for decades the french by contrast abandoned their gas cooled reactor designs and have since developed the thriving export business that the british government so desperately wanted as of this writing size well b remains the last completed nuclear power station in the united kingdom but after a long hiatus the uk is looking to get back into it in 2010 the government announced a series of new third generation nuclear power stations the chinese state-owned enterprise china general nuclear power group is contributing funding and technology these reactors will use a third generation epr design used for the taishan nuclear power plant in guantong the first of these stations hinckley point c is slated to be completed in 2027 at a total cost of 25 billion pounds 50 percent higher than the original 2016 budget despite that good for them nuclear should have its place in the energy portfolio but part of the reason why the united kingdom's nuclear energy industry collapsed in the first place was its structural inability to compete with gas-fired and coal plants on the open market hopefully new policies and technologies can be introduced to ameliorate this alright everyone that's it for tonight thanks for watching subscribe to the channel sign up for the newsletter and i'll see you guys next time

Channel: Asianometry

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Length: 27min 46sec (1666 seconds)

Published: Thu Oct 27 2022