Opinion - First person

Simon Harrison, IET Energy Sector Panel and Mark Venables, power editor, offer their views on current issues.

If you ask me

Nuclear visions

Could the UK become a major world nuclear player through a build programme vastly in excess of old plant replacement? That was the vision set out in a recent speech by business and enterprise secretary John Hutton which, coupled with the agreement between Prime Minister Gordon Brown and President Sarkozy of France on sharing nuclear regulatory experience, throws an interesting light on the role of the government in new nuclear.

Long gone are the days when government caused new designs to be produced, approved them as safe and financed and ran the stations. Today, the UK competes for the attentions of four global reactor vendors, and commitments to build are made by commercial investors, in many cases considering pan-European programmes.

The government's contribution is essentially twofold: first to encourage investment, and secondly to regulate safety through the Nuclear Installations Inspectorate (NII). The NII is currently assessing four generic designs proposed by reactor vendors for pre-licensing. Site-specific license applications will be assessed in due course once pre-licensing has been achieved.

The NII has delivered a strong safety record over decades, but its requirements for nuclear safety cases have typically resulted in major design developments that have added years to schedules and millions to costs.

Now, things have changed. The vendors hold market power globally, and the UK is a modest market. New nuclear projects are announced almost weekly, and there is little vendor interest in producing one-off design development for the UK. Either we take and approve their standard design or the vendor looks elsewhere for sales. Owners and financiers too would baulk at the cost and performance risk of special designs, and arguably a one-off is less safe than a series produced units, where experience can be gained and lessons learned. Going this way would most likely result in long delays in any build programme.

This poses new challenges for design licensing, implying a much more yes/no approach to design assessment rather than iterations of development. Safety documentation developed for different regulatory systems will have to form the basis for assessment. The proposed exchange of French and British regulatory staff can only help here, but we must not forget that American and Canadian regulation will have underpinned three of the available designs.

A real challenge then, but also an opportunity to develop a truly global approach to nuclear safety assessment and to create a leading edge regulatory environment that might be something the world wants to emulate. The UK has a vast track record in financial and economic regulatory innovation. One has to be more cautious in innovating in safety regulation as losses can be more than economic, but this could be a big step on the road to Hutton's vision.

Simon Harrison is director, energy at Mott MacDonald and chair of the IET's Energy Sector Panel

Rocky road to sustainability

Climate change is something that everyone on this planet will have to live with, like it or not. Whether you believe that our time is running out unless immediate action is taken to reduce our carbon footprint, or you remain among the dwindling hardcore of unconvinced, it cannot be avoided.

From the build up of greenhouse gases to growing water shortages and natural resource management issues, it is apparent that the road to a sustainable economy is full of potholes.

But the portents from businesses and consumers give rise for cautious confidence. Major companies such as General Electric, where CEO Jeff Immelt has put environmental issues front and centre of the company's corporate strategy with his 'ecomagination' campaign, Dow, where CEO Andrew Liveris is championing innovation towards a world of sustainable chemical solutions, and Toyota, who are putting fuel economy environmental sensitivity at the heart of everything they do, are leading the way for big business.

Consumers have also seen the light with mounting pressure for more efficient, environmentally friendly devices that could help reduce the domestic carbon footprint. It is a trend that is having a growing influence on the uptake of new technologies.

Homes are on a par with industry for carbon emissions, due in part to the continuing rise of inefficient traditional appliances such as washing machines, dishwashers and air conditioners, and the emergence of new products such as computers, DVD players, set-top boxes and broadband equipment. Many homes also have several TVs and some have more than one fridge.

The demand for environmentally friendly products has been on the rise for a number of years, but has accelerated over the last few years.

But can we rely on the traditional market structure to deliver the platform for a sustainable future? In his report on the economics of climate change, Sir Nicholas Stern called this "the greatest and widest ranging market failure ever seen". In a physically restrained world the economic rules must evolve or economists' reputations will perish as fast as the polar ice caps.

The way forward looks to be private sector investment guided by carefully structured, market-based incentives. The burden must inevitably fall on the business community, driven by consumer pressure, where there is a vast pool of capital available. Venture capitalists will not baulk at a 90 per cent failure rate, but that is something that governments, with their quite natural aversion to risk, cannot countenance.

We need to retreat from the highly regulated model where governments set the standards as well as the method of compliance. In an economic incentive-based system where businesses and individuals pay the cost for the environmental harm they cause a strong incentive is in place to remedy this malaise.

It is easy to be pessimistic when we are deluged by the potential catastrophic consequences, but the growing enlightenment among companies and the prodigious rate of green innovation brings out the optimist in me. But there is no room for the slightest hint of complacency; the spotlight must hold firm on the environment.

Mark Venables, power editor

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