HC Deb 09 December 1965 vol 722 cc623-8
The Minister of Technology (Mr. Frank Cousins)

With permission, I will make a statement about the reactivation of the Capenhurst plant of the Atomic Energy Authority.

The Government have decided that the Capenhurst plant of the Atomic Energy Authority should be modernised and reactivated so that it may supply enriched uranium for the manufacture of fuel for the second nuclear power programme.

Owing to a decrease in the demand for enriched uranium for military purposes and because, at that time, the civil demand was very small, it was decided in 1962 that production of high-enriched material for military purposes should cease and that of slightly enriched material for civil use be reduced to the minimum level needed to maintain gaseous diffusion technology. This decision was implemented by the end of 1963.

The House will recall that an Advanced gas-cooled reactor of British design has been adopted for the Dungeness "B" station which is the first in the second nuclear power programme of 8000 MW by 1975. A.G.R. fuel is made from slightly enriched uranium oxide. For a programme of the size indicated, the requirement will rise to several hundreds of tons annually worth many millions of pounds.

The alternative to reactivating the Capenhurst plant would be to purchase enriched material for civil use from the United States. Initially, the U.S. price would be lower, owing to the large scale of U.S. production capacity and the low cost of electricity available to its diffusion plants. However, the Atomic Energy Authority has designed modifications to the Capenhurst plant that would greatly improve efficiency of production, and has advised me that the gap between U.S. and Capenhurst prices should narrow progressively during the 1970s.

Other factors had to be taken into account in the examination of the alternatives.

First, since nuclear power is going to meet a steadily increasing proportion of total electricity demand, there are obvious disadvantages in complete dependence on a foreign supplier.

Second, United Kingdom production would save imports of some millions and ultimately some tens of millions of pounds per annum.

Third, closure of Capenhurst would mean that Britain could not maintain its expertise in this important field of technology.

Fourth, manufacture in this country will provide the Authority with opportunities to export slightly enriched uranium fuel.

The Government have approved in principle plans involving capital expenditure of about £13½ million, the first phase of which, to be started immediately, will cost about £7½ million. These plans are expected to meet the initial requirements of the new nuclear power programme. It is envisaged that the plant can be further expanded as requirements increase and decisions will be taken as necessary.

Work will start immediately and the modernised plant will be in operation in sufficient time to supply fuel for the first A.G.R. of the second nuclear power programme, Dungeness "B".

Mr. Hogg

The House will have heard the right hon. Gentleman's announcement with great interest, but perhaps he will furnish us with a little more information about what he is saying. Although one concedes the importance of retaining the capacity for gaseous diffusion plant technology in this country, what are the real economics of what the Minister proposes? Is it not a fact that there is about a 15 per cent. difference between the American price and the cost of production here, due to the cost of electricity generation in the United States being a great deal lower, through factors quite outside our control? If this is so, what is the real opportunity for export referred to in his statement?

If he is hoping for greater efficiency from technical developments inside the Atomic Energy Authority, can he tell us a little more about what they are and whether they will reduce the differential between American costs, which might well shortly include such modifications, and British costs? Can he be sure that the centrifuge plant will not ultimately make the diffusion process rather obsolete? Until one has heard that, it is very difficult to gauge the value of the statement which, on the face of it, ought to be welcomed.

Mr. Cousins

The right hon. and learned Gentleman is quite correct to say that this is a subject on which one wants a little more information. Because of its technical nature one hesitates to give a long technical outline. The real issue at the moment is that the difference between probable British and American prices in the early 1970s should be sufficiently small as to have only a marginal effect on the cost of electricity. The basic difference at the moment is not 15 per cent., but an estimated 10 per cent. But electricity costs in diffusion are likely to go down simply because electricity in this country is becoming cheaper. There is nothing to say that American prices will remain constant. I understand from the Atomic Energy Authority that there is a possibility of costs in America rising and so there would be a narrowing of the gap in costs from both directions.

The economics of the matter are that the effect is likely to be about ¼d. in the pound for the ultimate consumer and in that setting we felt that this was a proposition which we could easily support and commend to the House. In fact, when Capenhurst was closed down in 1962, there was a comment that it might be possible at some time to reactivate it because of the increasing use of this kind of material in the production of electricity in this country.

On export prospects; if we are to provide low enriched uranium and various types of stations are to be built around the world, there is a possibility that we shall be in the market to sell to them. At present, there is only one market for this fuel, but if we do not produce it, we shall not have any export market at all. There is a possibility of supplying tailor-made material to tailor-made stations and this is what the Atomic Energy Authority has in mind.

There is a possibility that centrifuge plant will make present methods obsolete, but, from all the information available to me from the Authority at the moment, none of the experiments taking place has been so successful as to lead the Authority to believe that it need worry about the position for the next ten years. It will therefore be some time in the 1970s, and probably the late 1970s, before centrifuge plant becomes a proposition. The method under discussion now provides an opportunity for us to change over at a later stage if we need to do so.

Mr. Palmer

Can my right hon. Friend say whether the Central Electricity Generating Board, which will have to operate the additional nuclear power programme, has been consulted and whether it is in favour of these proposals? Is it likely that the ultimate charge will fall on the Board?

Mr. Cousins

No. The Board has been consulted and is in favour of doing it. It has made a long-term agreement and it supports the proposals which we are putting forward.

Sir Ian On-Ewing

Will the right hon. Gentleman take the last matter a little further? Has the £13½ million capital expenditure now envisaged been taken into account when working out the economics of the Dungeness and subsequent power stations? Secondly, in roughly what year will the enriched uranium from the reactivated Capenhurst be available for export purposes?

Mr. Cousins

It is a little difficult to give a specific date in answer to the hon. Gentleman's second question. It is hoped that there will be a possibility by the 1970s. The enriched uranium will be available for Dungeness B when it requires it. The costs have been taken into account.

Mr. Woodburn

Can my right hon. Friend say whether the manufacture of enriched uranium requires a constant peak expenditure of electricity? If not, would not the so-called loss be considerably offset if we were able to use electricity in surplus during the night when there is no other use for it?

Mr. Cousins

It is a constant process.

Sir H. Legge-Bourke

Is the right hon. Gentleman aware that in so far as his announcement represents winning the agreement of the Treasury to thinking long-term on these matters he is to be congratulated? Will he be as forthcoming as he was in the case of the Dungeness "B" Station in putting before us as soon as possible in rather more detail the calculations which he has been able to make and on which these decisions have been taken? What would have happened to Capenhurst and to what extent would writing-off have been involved if this had not been done? Finally, is there likely to be any tie-up with Capenhurst and what has been very satisfactorily developed between Wind-scale and the Italian Atomic Energy Authority regarding the reactivation of enriched fuel?

Mr. Cousins

There will be no tie-up for this specific purpose. I think that hon. Gentlemen will now understand why I was a little hesitant about making comments earlier this week. The Treasury has been very helpful. Obviously, it hopes that we shall be making a profit as soon as possible, but it has been helpful. If we had not taken this decision, it would have been necessary to close down Capenhurst.

Mr. Howe

Is the right hon. Gentleman aware that his announcement that Capenhurst is to be reactivated will certainly be welcome in the Wirral peninsula where the future of the station has been causing anxiety to many people? Can he give the House any idea of the prospective increase in employment in the area which is likely to arise in the short term from the construction and capital investment programme which he proposes and in the long term from the reactivation of Capenhurst itself?

Mr. Cousins

The number of people involved in construction is not a matter for my Ministry, but there will be a relatively modest increase in the number of personnel required for the operation of the plant. It is being reactivated to provide fuel for other stations. Non-industrial staff at present number 455 and industrial staff 860 and when operations are in full production there will be an estimated increase of some 200 industrial staff.