Failed Technologies =================== Nuclear Power ------------- The science of atomic radiation, atomic change and nuclear fission was developed from 1895 to 1945; however, between 1939-45, as a result of the outbreak of World War II, development was focused on the atomic bomb. Following the end of the war, from 1945 resaerch and development was focused to harnessing this energy in a controlled fashion for the production of electricity, in addition to naval propulsion. Since the first commercial nuclear power stations started operation in the 1950s, the nuclear power industry has steadily grown and there are now some 440 commercial nuclear reactors in 31 countries worldwide, supplying over 350,000 MWe of total capacity. This translates to 16% of the world's electricity, as base-load power, and the efficiency of such power production is increasing. In addition to reactors found in commercial nuclear power stations, 56 countries operate a total of 284 research reactors, thus providing a source of neutron beams for scientific research and the production of medical and industrial isotopes. The number of nuclear power plants being constructed has slowed considerably in comparison to the development of such power stations during 1970’s and 1980’s; however, due to advances in both knowledge and technology over this period of time, partly as a result of the larger number of research reactors available, the efficiency of such methods of power production has increased. In 2001, nuclear power generated 2544 billion kWh, an increase in production of 4% (97 billion kWh) over the previous year. The increase of 414 billion kWh over the past seven years is equal to the output from 60 large new nuclear plants. However, between 1995 and 2001 there was a net increase of only 3.5% in capacity, which equates to two reactors. This improvement in production is due to the increased efficiency and performance of existing plants. Despite nuclear power accounting for approximately 16% of the world’s energy production, non-renewable fossil fuels are utilised in order to generate 64% of the world’s electricity, as illustrated in the figure below; Pie chart showing the main sources of energy and percentage use for the generation of electricity worldwide In recent years the nuclear power industry in countries across the world has been under increasing scrutiny regarding issues ranging from the potential health risks posed by the waste products produced by the process, to the economic viability of such methods of energy production. The nuclear power industry in the United Kingdom is no exception. There is an ongoing debate regarding the use of nuclear energy to generate electricity and the use of such energy sources remains a contentious issue politically, socially and economically in terms of both ideology and physical facts. Producing electricity utilising any form of primary energy has associated environmental effects, which may occur either directly or indirectly as a result. One waste product of nuclear power plants is depleted uranium, which is not classified as a dangerous substance radiologically, though it is a potential hazard in large quantities. The most common form of depleted uranium U-238 and is a gamma emitter; therefore, even with trace amounts present, the material is difficult and hence costly to handle. Every year in excess of 50,000 tonnes of depleted uranium is added to the already substantial stockpiles in the USA, Europe and Russia, increasing the world stock, which at present is of the order of 1.2 million tonnes. This substance continues to emit low-level gamma radiation, as a result of such depleted uranium having a half-life of 4.5 billion years (the age of the earth). Despite much study and research, the information available regarding the occupational and environmental health effects of nuclear power is very conflicting. As with any subject matter, sources of information concerning nuclear power are written very subjectively with noticeable bias depending on the authors’ point of view on the issue; therefore, as a result of this, the general public form opinions based on ‘subjective’ facts, thus creating a difficult environment in which companies within the nuclear power industry must operate. In addition to this, horrific accidents, such as that which occurred at the Chernobyl nuclear power plant in the Ukraine (former Soviet Union) heighten public awareness of the potentially devastating effects of such methods of power production. The radioactive material released in the explosion at the plant was spread over a very large area of northern Europe by north-westerly winds (as illustrated by the maps shown below). Aerial photos showing the drift of radioactive material from the Chernobyl plant from the date of the blast (26th April 1986) to the 6th May 1986 The effects of this accident are still very apparent today; therefore, due it being such a contentious, highly debated issue, the discussion regarding the nuclear power industry has received a very high level of media interest and coverage. This often results in the operations of companies operating in the nuclear power industry being documented by the world’s media; therefore, creating a very mixed and in some case hostile view of the industry as a whole. Also, the potential for catastrophic accidents to occur within this field, such as that at Chernobyl, has severely reduced public confidence in nuclear power, hence the reputation and credibility of the industry has been damaged. From the first extremely controversial application of nuclear physics, seen when two atomic bombs were developed and detonated in 1945 during the World War II, to present day with the current political tension regarding the reported stockpiles of nuclear weapons in Iraq, the hostile utilisation of nuclear energy is well documented. Hence for more than four decades concern has centred on the possibility that uranium intended for commercial nuclear power might be diverted for use in weapons. Even now with attention being focused on the role of military uranium as a major source of fuel for commercial nuclear power, the association of the nuclear power industry with the production of weapons of mass destruction will remain; therefore, damaging further the nuclear power industry. Since 1987, the USA and countries of the former USSR have signed a series of treaties agreeing to reduce their arsenals of nuclear weapons by 80% by 2003. The surplus nuclear material declared by the military, which is commonly highly enriched uranium (HEU), is being converted into fuel for use in commercial nuclear power stations, by blending it down with other forms of uranium to produce LEU (Low enriched uranium). The HEU created from weapons stockpiles is displacing some 10,000 tonnes of U3O8 production from mines each year, and meets only around 15% of world reactor requirements. This process however, requires the transportation of radioactive material, which is slow and hence costly due to the safety regulations that must be met in accordance with legislation laid down by the International Atomic Energy Agency (IAEA), which acts as the “international inspectorate for the application of nuclear safeguards and verification measures covering civilian nuclear programmes”. Such transportation often results in protest by anti-nuclear campaigners and action groups, particularly when the material crosses international borders; therefore, gaining media coverage and again bringing the contentious debate regarding the viability of the nuclear industry into the public eye. The UK nuclear industry is currently in severe decline. British Energy plc (BE) is the United Kingdom's largest generator, producing one fifth of the country's electricity, with its core business being nuclear generation. At present, BE owns and operates 8 nuclear power stations in the UK with a combined capacity of approximately 9600 MW. The Company was privatised in 1996 and is listed on the London and New York Stock Exchanges. However, since this privatisation, the company and the industry as a whole has been under pressure financially. 2002 2001 2000 1999 1998 (restated) £m £m £m £m £m 1. Balance sheet Net assets 627 1,298 1,313 1,684 1,607 Net current assets 891 854 73 1,042 665 Nuclear liabilities (discounted) 3,719 3,728 3,770 3,762 3,790 Capital expenditure (225) (133) (137) (78) (81) Net (debt)/funds (859) (730) (936) 176 10 2. Ratios Dividends per ordinary share (p/share) 8.0 8.0 8.0 16.0 14.7 Special supplementary dividend (p/share) - - - - 10.0 (Loss)/earnings per share (p/share) (88.5) 1.2 23.2 27.1 26.6 Business performance (loss)/earnings per share (p/share) (8.4) (4.2) 24.9 29.3 18.1 Dividend cover (based on business performance) - - 3.3 1.8 1.2