Hitachi's ABWR reactor, intended for Britain, has terrible operational record

The Longmen ABWR plant in Taiwan, built by GE-Hitachi, nearing completion,

Hitachi has agreed to buy the Horizon nuclear company for around £700 million from RWE and E.ON, and begin a programme of building new ABWR reactors in Britain. But the four operational ABWR plants in Japan have a history of being off-line over 40% of the time.

The Japanese company, leading a consortium which contains Canadian engineering and construction group SNC-Lavalin, is to work with two leading British engineering companies, Rolls-Royce and Babcock International, intending to build two or three 1.3GW plants at each of the two sites owned by Horizon: Wylfa on Anglesey and Oldbury in Gloucestershire.

Hiroaki Nakanishi, president of Hitachi, said: “Today starts our 100-year commitment to the UK and its vision to achieve a long-term, secure, low-carbon, and affordable energy supply”.

Between 5,000 and 6,000 jobs are hoped to be created at each site during construction, with 1,000 permanent jobs per side following.

Government ministers welcomed the announcement, which comes after a series of talks at Whitehall with the potential buyers. The other contender was Westinghouse, but Hitachi beat them on price, offering twice what the owners of Horizon were expecting.

Hitachi is to use the Advanced Boiling Water Reactor (ABWR) design, which it has employed on four plants in Japan. Other plants based on this design are being constructed in Taiwan. All have been delivered on time and on budget.

The design has not yet been submitted to the Health and Safety Executive for approval, a process which can take up to four years. The first plant is therefore not expected to be operational until the middle of the 2020s.

However, the four Japanese ABWRs in operation have often shut down due to technical problems. According to the International Atomic Energy Agency, they have an operating factor below 60%, meaning that on average, 41.2% of the time they have not been producing electricity.

The Shika 2 ABWR reactor was unavailable 57.5% of the time; the 46.8 %">Hamaoka-5 reactor 46.8% of the time, the Kashiwazaki Kariwa-7 plant was unavailable 32.4% of the time; and the the Kashiwazaki Kariwa-6 plant 28.1% of the time.

Another ABWR planned to be built in Texas was cancelled in March 2011, and earlier this month almost two-thirds of Lithuanians voted against such a plant being built in their country.

Energy and Climate Change Secretary Edward Davey said: “Hitachi bring with them decades of expertise, and are responsible for building some of the most advanced nuclear reactors on time and on budget, so I welcome their commitment to helping build a low carbon secure energy future for the UK. I particularly welcome Hitachi’s firm commitment to involve the UK supply chain and local workforce."

Around 60% of the value of the first plant is expected to be sourced from within the UK, with more from subsequent plants.

Speaking on Radio 4 this morning, Ed Davey repeatedly denied that there had been any discussion of the price that might be paid for the electricity any of the plans might produce. He insisted that it was purely a commercial arrangement.

EDF Energy is negotiating with the government over the strike price for the electricity it is hoping to generate at Hinkley.

Mr Davey also announced the setting up of a new arms-length body, the Nuclear Industry Council. It will attempt to promote the UK's commitment to new nuclear power abroad and will be chaired jointly by government and industry representatives: Edward Davey (or Energy Minister John Hayes) and Business Minister Michael Fallon, and Lord Hutton, Chairman of the Nuclear Industry Association.

John Hutton said that the council “symbolises the long-term strategic partnership developing between the UK nuclear industry and the Government".

Also today, the Department for Business, Innovation and Skills announced that Sheffield University has been selected to go forward to final contracting and due diligence for a £37 million project involving continuing support for the Nuclear Advanced Manufacturing Research Centre.

This will be responsible for improving the skills base in the nuclear industry in the UK.

ABWRs have a design life of around 60 years, and take four years to construct. Unlike Areva's EPR design, they have a single not a double containment shell. They do not use steam generators.

Greenpeace Energy Campaigner Leila Deen commented on the news that: "It speaks volumes about the UK’s struggling nuclear programme that the Government is promoting a reactor that's years from being granted UK safety approval and is designed by the company that helped build Fukushima.

"Instead of waiting years to find out how much bill payers will end up subsidising this project, the Government should join Japan and Germany, abandon nuclear, and invest instead in clean, renewable energy."

Nuclear power can't happen without subsidy. So it shouldn't happen.

Wylfa nuclear power station on Anglesey/Ynys Mon.

“A new generation of nuclear power stations will only be possible with vast taxpayer subsidies or a rigged market.”

Guess who said that? Well, it was our very own Secretary of State for Energy and Climate Change, Ed Davey, when he was the Liberal Democrat's Shadow Trade and Industry Secretary, on 17th July 2006.

And, on 6th February this year he followed this up with: “new nuclear can go ahead so long as it’s without subsidy".

Put these two statements together, and what do you get?

Quite. Mr. Davey was right in 2006, and he is even more right in 2012: nuclear power can't happen without subsidy.

The decision by Horizon, the consortium run by German energy firms EON and RWE npower to pull out of developing new nuclear power projects in the UK supports this thesis and has brought dismay to the governments in Westminster and Cardiff.

The Welsh Assembly Government feels particularly let down because it had only just published its Energy Wales policy document which, for the first time, had committed Wales to support nuclear power and had placed Horizon's anticipated new power station on Anglesey as a key plank of its policy to ‘create a sustainable, low carbon economy for Wales’.

What will it now do to make sure it meets its policy targets? A spokesperson for the Welsh government would add no more to the official line that "there is live and significant interest in the site", and "we are seeking the full support of the UK Government as we work with Horizon to deliver this investment and secure jobs for workers at Wylfa in the future".

Perhaps it hadn't really sunk in that Horizon is no longer interested. And what did he mean by support from the UK Government? It couldn't be the S-word, could it?

Volker Beckers, CEO of RWE npower, told BBC Radio 4's Today programme that the decision has been made purely on strategic grounds, both adding that the recession was a factor.

Westminster is putting a brave face on this major setback to its masterplan. There is interest from other companies, but the undeniable truth is that the capital intensity of constructing and underwriting the costs of nuclear power makes it impossible for any player to enter the market without state support.

This was in effect admitted on Friday morning by Malcolm Grimston, associate fellow at the Energy, Environment and Development programme at Chatham House, when he said that "electricity is too important to be left to the free market and therefore the government has a central role to play".

Existing nuclear subsidies

Of course, subsidies already exist. Here are six of them:

1. Charles Hendry, Minister of State for Energy, has just made nuclear power even more expensive for operators (although this move was widely expected), by announcing on Friday that the operator's liability in the event of a nuclear accident will be raised from £140 million to €1.2bn, or just over £1 billion.

This removes some of what is an effective subsidy from the taxpayer to nuclear operators. However, in the event of a really serious accident, there is no doubt that the cost of reparation would be much higher than £1 billion: £800 billion is the current level of the cleanup bill at Fukushima. And this will be borne by the taxpayer.

2. Under the proposed Electricity Market Reform, the Contracts for Difference Feed in Tariffs will provide a subsidy of between £63 billion and £75 billion to EDF, the only nuclear player left in town, over the next 35 years. That is nearly £2.0 billion a year.

3. Waste disposal costs will also be subsidised since the Government has proposed capping the nuclear industry’s liabilities. Currently, DECC spends £6.93 billion a year, 86% of its budget, on managing nuclear waste and other liabilities from Britain’s current nuclear power programme: over eight times more than it spends on securing our future energy and climate security.

4. The four campaigners calculate that it is likely that new nuclear build in Britain will require the creation of special purpose financing mechanisms to protect the balance sheets of the proposers, even a well-apitalised company like EDF in the form of loan guarantees.

5. Dozens of agencies, offices, quangos and departments support the nuclear industry, costing billions of pounds per year. Similar levels of support do not exist for other low carbon technologies.

6. Finally, it is impossible to have nuclear power without huge security and counter-terrorism costs. Most of this is paid for by the taxpayer, but official secrecy prevents us from knowing how much.

These and other ways in which the taxpayer supports nuclear power and will support new nuclear power stations, are summarised in a briefing prepared for the government this week by antinuclear ex-directors of Friends of the Earth, Tom Burke, Tony Juniper, Jonathon Porritt and Charles Secrett.

It's not just the UK

The same S-word dilemma is occurring everywhere and getting worse. And it's not just woolly eco-freaks saying so.

At a symposium this week on the Future of Nuclear Power hosted by the Dick Thornburgh Forum for Law and Public Policy of the University of Pittsburgh, this extremely authoritative and august body, speaking from the birthplace of nuclear power, admitted the following in a comprehensive report on Nuclear Safety and Nuclear Economics, written by Mark Cooper, Ph.D., Senior Fellow for Economic Analysis, at the Institute for Energy and the Environment:

"The subsidy problem in nuclear reactor construction has actually become much more severe," he writes.

Besides increased liabilities resulting from heightened safety awareness following the Fukushima accident, "The utilities proposing new nuclear reactors have demanded many more and larger direct subsidies".

He continues: "Since construction of nuclear reactors cannot be financed in normal capital markets, federal loan guarantees and partnership with public power that has independent bonding authority appear to be necessary ingredients to move projects forward."

We shouldn't have to point out the ludicrous irony of the Tory part of the coalition, which is the half that actively supports nuclear power, relying on a socialist French government, which supports a nationalised industry, to bring about with British subsidies the nuclear power it wants in the UK.

Why not just abandon nuclear power?

All of this makes absurd the claim that nuclear power is the cheapest form of new generation that is continually made by the Government, most recently in its 2011 update of the costs of new generation capacity.

If even just one of EDF's proposed new nuclear power stations goes ahead (and they still haven't submitted a timetable for construction) there is absolutely no doubt that the country will regret it in the future.

And to those who say we need nuclear newbuild to combat climate change, I say with the billions saved from scrapping all the currents subsidies listed above we could build the equivalent amount of new renewable generation plant and install more energy saving products far quicker and with far better value for money and far more British jobs.