HC Deb 20 March 1967 vol 743 cc1339-53

6.13 a.m.

Mr. David Webster (Weston-super-Mare)

Coming from a dairying part of the world, I must say that I was much depressed by the speech we have just had from the Government Front Bench. Switching to something else that is happening in my part of the world, where we have nuclear power stations being built, we have to accept at present that it is almost a truism to say that we are in a state of constant reappraisal of fuel policies.

With nuclear energy, we have the changes from the first stage of the Magnox type of reactor to the second stage of the advanced gas-cooled reactor, and the different problems there. At the same time, making life very much more complicated, we have the advent of natural gas as a commercial proposition, and we cannot as yet be absolutely certain what effect this will have. With nuclear power stations it will not be a very lasting effect, because we are talking of something that will supply the base load for power raising. We are talking of something with a 50-year-plus consideration.

We assume that our experience with natural gas will be the same as Holland's, where one would give it 30–40 years of life. There is the dilemma. If one goes shorter, one has the risk of exploring it and using it too quickly, and if one spins it out too long it might become redundant. This is the tremendous problem in fixing prices for natural gas, and one can see the difficulties the Minister has in this connection. But we are already having as we change from the Magnox to the advanced gas-cooled reactor a situation in which these larger power stations, with the economy scale which they possess, producing power at 10–15 per cent. more cheaply than does the orthodox type of power station using coal.

As we appreciate, the Magnox type, which is based on Calder Hall, will, when we get to the end of the programme, be producing 5,000 megawatts. With the advanced gas cooled reactor we are having what is in effect an engineering extension to the Magnox type, and in this programme we have 8,000 megawatts being produced. I think this is a minimum, and I hope the Minister will say that there will be approval very shortly to bring it up to 10,000 or 12,000 megawatts, which is probably what will be necessary for the power production of this country. This is a case of graphite core with a carbon dioxide coolant and slightly enriched uranium in stainless steel cans. This produces higher fuel ratings.

In the case of Magnox we are having a considerable change from 280 megawatts at Berkeley to 1,200 megawatts at Wylfa, with the tremendous improvement derived from this. Each is different in design, and in each case I think it is right to say that we are not having a repeated design and the economy of duplication because it has been a different design and it has been advancing progressively. I think that is the case with every power station designed and put into action and every power station that is on the drawing board at the present time; the argument regarding economy of design duplication has not so far been one which is practicable in the history of nuclear power raising in this country.

The only snag with the A.G.R. has been regarding the way in which the carbon dioxide oxidises the graphite at high temperature, which has been a very great difficulty. But as one comes from the A.G.R. to the type that we are having at Dounreay, the fast breeder reactor, we are having—and this is looking about 15 years ahead—a capital cost that is no higher and a running cost that is the same.

Then one hears of the Heysham power station of 2,500 megawatts, which we hope will come in in 1977–79. The exciting thing is that for the first time it will be near a population centre, where there is no strong objection being made on the ground of amenity.

When we come to Seaton Carew and Immingham, and the problems of Heysham, which are very particular, there was a difficulty I know about siting. But sea water will, I think, be used for the first time for cooling, and one of the byproducts according to the A.E.A. is desalination.

The Magnox type of reactors are all twin reactors and range from Bradwell and Berkeley, in 1962, to Hinckley A and Dungeness A, both of which are to be duplicated by the A.G.R., and Transffwydd, coming on the Oldbury at 600 megawatts and Wylfa at well over 1,000, bringing the total to 4,500 megawatts that Magnox has produced.

Magnox uses natural uranium in magnesium alloy cans with a carbon dioxide coolant. It is interesting to note that at Calder Hall and Chapel Cross the system is being operated at 98 per cent. load factor. This gain will be relevant when I come to talk about what, I hope, will be the guidelines and ground rules of assessing the cost of by megawatt hours, which is the only thing that matters, providing that all the safety factors are the same.

In an age of increasing interest rates, it was of course necessary to increase the rating of the fuel, that is to say the megawatts per tonne. I say this not as a matter of one-upmanship but, as the Parliamentary Secretary knows, this is the European type of ton, .98 of a normal ton of uranium. This is most essential. There is also the raised steam temperature per thermal efficiency. In the case of the Magnox the uranium metal is not allowed to go over 660 degrees centigrade and the Magnox can melts at 650 degrees. So one has 620 degrees at the uranium centre and 500 degree for the can. The outlet gas temperature is no more than 400 degrees centigrade. When we come to the gas-cooled reactor, if one is to have an ad- vantage from this immense capital cost by the use of systematic uranium oxide fuel, the beryllium can is now replaced by stainless steel. The rating has gone up from 3 mw/tonne to 12 mw per tonne, which is a very considerable increase in efficiency. This makes a basis for industrial plants of 500 mw alone and a basic kilowatt at a load of 75 per cent. and a cost of 0.5d. per unit. This brings the matter into competitive tendering and the thermal rating is increased from 33 per cent. to 34 per cent. We are getting four times as much power for the same kind of reactor, and the fuel life has been lengthened by a factor of four.

We have the exciting development of Dungeness B, where we are hoping to have power in the national grid in 1971 and where it is 15 per cent. cheaper than the most advanced type of coal fuel-raising station. One sees ahead in about 15 years' time a fast breeder reactor as at Dounreay, which was in full power in 1963. In these matters, these nuclear power stations are produced by baseload because that fits our requirements in the domestic market, but that is not necessarily the requirement of a nuclear power station in the markets for which we are trying to sell overseas.

A matter which is of the greatest importance is the Dragon experiment at Winfrith, where there has been a great deal of experimenting in high temperature and this efficiency has been improved. We see the difficulty that this is a project of the O.E.C.D. where the budget from Great Britain is £10 million and £25 million from Europe. We have the great problem that as far as I know—I hope that the Parliamentary Secretary can give good news on this subject—the Euratom budget has not been agreed. I hope that the hon. Gentleman will be able to say either that it has been agreed or that he sees real hope on the horizon that it will be. If it is not, I hope he will do what Sir William Penny is begging should be done—guarantee that the British Government will continue to keep this valuable experiment ahead, because this is something on which a great deal of useful work has been done and something which is coming to a commercial proposition which can be very useful.

As I have said, with these higher fuel rating, one has the A.G.R. at Dungerness at 1,200 megawatts, and the Hickley B, where there was a delay, which I regretted, in announcing the contract, with information being trickled out about the 1,500 megawatt contracts. The consortia trying to get this contract have been trying to sell abroad, particularly in Belgium, where they are being told by the potential purchasers that they cannot see much point in buying if the British Government do not show any confidence in it. The delay of about seven months is regrettable and has damaged our export chances. I hope that it is not now too late. The advanced gas-cooled reactor is very cheap, but it must be at base load, because we are competing with the Americans who provide concessions on enriched uranium and apply considerable pressure, which we all understand, as they are a very commercial nation. It is necessary to produce a smaller type of reactor for export, and preparatory work might be done by the Government for the country that is going to have it.

Our nuclear engineers are of a high standard but we are trying to sell something comparable to a Rolls Royce in a market which only wants a Mini. Encouragement should be given to consortia to meet the needs of the market. We are a pioneering scientific country having great difficulty in getting commercial application for what we are doing. This is one of the reasons behind the brain drain. Frequently we are unable to reward scientific and engineering effort either materially or with a feeling of accomplishment. The greatest danger is not the loss of designers but the loss of engineers to put the science into application and for whom there is a great demand from the Americans.

There is advantage in the bigger type of nuclear reactor in economy of scale. I would like to draw the attention of the Parliamentary Secretary to a report of the Economic Committee of the Council of Europe for which I have the honour to be rapporteur for this subject. The report, approved by the Assembly last January, recommends in paragraph 5— …the Committee of Ministers to encourage by all possible means, both in the framework of ENEA and elsewhere, the habit of showing generating costs per kilowatt/hour of electricity sent out from nuclear reactors calculated on a number of differing assumptions with regard to the overall rate of interest on the capital outlay, the period of amortization, and the average load factor to be expected during the said period, the assumptions being selected to cover typical practices in this respect both in Europe and in North America. This is extremely important, because if one has a rate at 10 per cent. under base load for 10 years amortisation, one gets an advantage of about 10 per cent. in cost. Amortisation for a conventional power station in this country is generally 30 years and 20 years in the case of a nuclear power station. The Americans, who are competing with us amortise theirs over a period of 30 years. They frequently assume in their costs a higher base load and a lower rate of interest. This gives an added disadvantage if an attempt is being made to assess the costs per kilowatt hour. As well as this pure economic consideration, there is the psychological difference. If it is assumed that the power station will be written off in 20 years, it is also assumed that it has only a 20-year useful life.

Those are two arguments which I hope will enable the Joint Parliamentary Secretary to say that his Ministry will be the first of the European Ministries of Power to follow my recommendation, or the Council of Europe's recommendation. It is good sense to get ourselves in line with American practice. We are competing with the Americans. It is not undiplomatic when many people in Europe think that we are balancing ourselves between American and Europe. It is also good business sense for us to take away an inherent disadvantage in economic terms.

I have mentioned the Dragon reactor. I think that the point has been made. I hope that the Joint Parliamentary Secretary will be able to tell us something more about this. Looking further into the future, there is the fast breeder reactor which will be complementary to the plutonium-producing thermal neutron station. This will be essential in 10 or 15 years' time when there will be a shortage of uranium in the free world. I myself tend not to accept too much the market predictions, because so often in the past estimates of fuel and power requirements and necessities have proved to have been wrong. I also think that, if there is a real shortage of uranium, the price will rise and the marginal producer will come back into production.

My final point is something that worries me and which I confess is difficult and complicated, namely, the future of the nuclear consortia. The A.E.A. has a team of designers. Each of the consortia has teams of designers and engineers. The Central Electricity Generating Board also has teams of designers. The argument on duplication could apply both ways. However, it would be dangerous if the A.E.A., as one assumes from some of the "leaked" or inspired information in the technical Press, is to be allowed to pick and choose as between the consortia. It might then be allowed to freeze out two of the consortia and then pick up the other one at leisure. This would not only be nationalisation by I do not know what type of door, but it would completely abolish any form of competition and I should have thought that it would be very bad indeed for our export chances.

It is frequently said, particularly by the Minister, that there has been a poor export performance by the industry. have showed that one of the difficulties is that very often we cannot compete in America. Where we have competed successfully, both in Japan and at Latina in Italy, it was for the smaller plant, and this is not necessarily the project which we have been most successful at producing, because of the economy of scale. The Belgian contract was one of considerable scale where we might well have had a little more from the Government.

There is also the argument of replication which I have no doubt we shall hear again this morning but which is not necessarily a proven case. We have had an advance in each design of nuclear power station through not having replication. I appreciate that almost £⅓ million can be wasted in competing contracts, but I am not at all sure that this is necessarily money down the drain. The consortia have certainly proved that equity capital has been risk capital, because in the early days of tendering to the Central Electricity Board there was not a great deal of fruit in the cake for them. Many people who thought that nuclear engineering would be a glamorous type of investment have found it not so and not as profitable as they would have wished.

On the question of unification of design effort, it is significant that the consortia were reluctant to agree a statement when the Minister met them to discuss this problem. One cannot tell ex- actly what happened, but I think that the future of the industry is one which should be weighed with very great care. We do not want to dogmatise that necessarily there should be the same number of consortia as there are at present, but I strongly believe that there should not be complete domination by the State but that there should be competition.

I end as I started by saying that this is but one form of advanced skill where we have been right in the forefront. It is essential that we remain so; that we have co-operation, perhaps, along the lines on which the Prime Minister was thinking when he talked of having a European Technological Community. It is essential that we keep in this country the pioneering spirit, for there is plenty of room for that pioneering spirit and for the risk enterprise which we have seen in the past.

6.36 a.m.

Mr. Arnold Gregory (Stockport, North)

I am sure that the whole House is indebted, as I am, to the hon. Member for Weston-super-Mare (Mr. Webster) for having introduced this important subject. He has started a debate on the broad basis of nuclear power, and I think there is only this difference between himself and myself and my own interest; for, whereas he has a nuclear power station in his part of the world, nuclear power engineering has secured an important place in the life of my constituency. That difference, perhaps, conditions one's attitude towards this subject, but, speaking broadly, I think we are in a crucial stage so far as the nuclear power industry is concerned. It has become a fascinating story over the last twenty years, and so far as the Minister of Technology is concerned, and his consultations to which the hon. Gentleman has referred, we need not only our domestic programme, but also the considerable export potential, and we await what the Minister has to say about the outcome of that.

We have heard of the concern of the Select Committee of the House which, within its broad terms of reference, is examining the scientific and technological expenditure in both the private and the public sectors. That is so especially in connection with our nuclear power programme at home and overseas. Then, we have Government concern and interest in domestic and overseas costs, and the concern of the House that the right kind of policy is applied.

In this age we have to come to terms with a science and technology which is, basically, a threat to the very existence of mankind, although it is at the same time bound up with the welfare of the human race through what we now know as nuclear energy for peaceful purposes. In its relatively minor aspects, but nevertheless a most important matter for me, nuclear power engineering has secured a significant place in my own constituency. It provides an industry employing many hundreds of people in Stockport and brings some measure of prestige to the town. It is quite clear that the development and expenditure to which we had to be committed during the war created, and in terms of cost cushioned the way ahead for the establishment of nuclear technology as we know it today.

The domestic nuclear engineering industry has been dependent upon the pioneering work and initiative of the scientists, technologists, designers, and engineers in the United Kingdom Atomic Energy Authority, and we now know that the achievements in this new technology led to the prototype reactors at Calder Hall, Windscale and Chapel Cross. There is the advanced gas-cooled reactor, and the heavy water type, all part of this fascinating development. It is a most significant development. I think that I am right in saying that this is the work of one design team, and it underlines the one-design-team system by the United Kingdom Atomic Energy Authority.

Now our thoughts must turn to how these resources can be best used to serve the nation in the production of electrical power by the most efficient and cheapest means. Just before coming to this debate, I read an American magazine which illustrated the size and magnitude of America's exporting industry allied to relatively inferior domestic performance. It asked, "What are we reckoning with?". The magazine made the point that we are dealing with a most elegant furnace to boil water. This is what we are getting to in the service of the human race. We have been wrestling technologically-wise to devise the cheapest way of creating electrical power.

With the adoption of the advanced gas cooled reactor for the Dungeness B station, we were told that this was a winner and that it was a great achievement for British engineering. It was emphasised that it was a major breakthrough for British technology and engineering. If this is so, one could well presume that the advanced gas cooled reactor would be just the thing to be repeated, to be the subject of replication, in basic design and production for a substantial run of three or four successive British stations and to prove their worth in national and international terms. In the first instance, we would create the most up to date, efficient and effective source of electrical power for domestic use and a first class science-based prestige export industry. But, on the face of it, these things do not seem to have happened.

The simple fact is that we in Britain have generated, and still generate, more electricity than the rest of the world put together—three times as much as the United States. By December, 1966, we had generated 67 million megawatt hours compared with 23 million in the United States. We still have the edge on that, but the general belief is that we have still not created a viable and efficient domestic nuclear engineering industry. We are still missing the key to taking full advantage of our opportunities in the field, while the United States—true, with all its advantage in straight commercial terms—has already achieved this objective. The Americans are firmly established and developments through replication policy, with which the hon. Gentleman quibbled, and are working wonders for the domestic nuclear power engineering industry in the United States. The Americans consistently use their own nuclear power at home and repeatedly sell them abroad.

The United States have repeated design on the water system and go on repeating stations on this basis. They have long since achieved a nuclear hardware and size on a standard design basis. I understand that it is their common practice to select design features and then to advance major schemes. I do not think that we should shrink from this successful and workable United States system simply because it is American. We can adopt it here. It means a major nuclear engineering industry for home and overseas use with a central theme of replication for the sake of real economic and commercial success in a highly competitive world situation.

If we claim a technological superiority, if we have achieved a major breakthrough, the engineering feat of the age, where stands the A.G.R. today? We might ask if Dungeness B has led to the price and efficiency advantages through Hinkley B to Hunterston. What is happening and where stands a replicated A.G.R. station today is the big question. Why have we not managed to sell the A.G.R. system and advance it to the world market? These are questions which I feel deserve an answer, and I am sure that my hon. Friend will deal with them.

Having achieved as much as we have in terms of technology, we should be shaping a nuclear engineering industry that is viable and competitive in world terms. The main ingredients of it are clear: one design team instead of five linked with the U.K.A.E.A. The undertaking is at the moment extremely expensive, and my right hon. Friend the Minister must take that point into account as a cost factor in rearranging the nuclear power industry. We should link this with the U.K.A.E.A., with real powers to create a sensible and efficient domestic industry, and to create clearly identifiable export opportunities, to bring about a single, central consortium of some strength—instead of three—consisting of architectural engineers, and creating a nuclear island, with in-build replication of the A.G.R. system into an overall design scheme. With a system and industrial arrangement of that sort, we shall shape ourselves as a unit capable of exploiting for national good an industrial and scientific system in which we have proven ourselves second to none.

It has been said that our technical lead can and must continue to be maintained—if it is not we do not deserve to survive in nuclear and technological terms. That is a challenge which my hon. Friend and my right hon. Friend are facing, but for exports time is not on our side.

Dr. M. S. Miller (Glasgow, Kelvingrove) rose—

Mr. Speaker

Did the hon. Member wish to speak on this topic?

Mr. Miller

Yes, Mr. Speaker—if I may.

Mr. Speaker

The hon. Gentleman had not informed me.

Dr. Miller

I merely wish to ask my hon. Friend to refer to the possible medical applications of nuclear power, both in research and clinically. I think that the scope of the debate is wide enough to encompass that, and perhaps he could make a valuable reference to it in his reply.

6.47 a.m.

The Joint Parliamentary Secretary to the Ministry of Technology (Dr. Jeremy Bray)

It is a measure of the interest the House has taken in nuclear power over the years that it should be the subject the Select Committee on Science and Technology has chosen for its first inquiry. We had a foretaste of the expertise that that will bring to the benefit of the House in the learned speech of the hon. Member for Weston-super-Mare (Mr. Webster), arising from his experience as rapporteur of the Economic Committee of the Consultative Assembly of the Council of Europe. Reports of that Committee have been of considerable interest, and we much appreciate the work Members have done overseas, not only in sorting out questions of nuclear policy generally, but in making sure the merits of Britain's achievements are widely known.

I could not quite make up my mind whether the hon. Member found the pace of change exciting or depressing, but I think that he ended up by finding it exciting, as I am sure we all do. The hon. Member asked a number of specific questions, which I shall refer to as precisely as I can.

First, there was the question of the Dragon programme. As the hon. Member correctly said, it is not wholly within our control. The delay in extending the programme beyond the end of 1967 is not of our making. We are keen to see an extension and are doing what we can to secure agreement. But Euratom has had some difficulty in deciding its own programme, and until that is resolved it is unlikely that we shall get a decision on the programme. We are doing our best to secure a decision as quickly as possible.

On the question of the effect of the Hinkley B order on the interest taken in A.G.R. systems in Belgium, we have made sure that the Belgians understand that any delay in placing the order had nothing to do with doubts about Hinkley. We have made plain that we have none; it is simply a question of the rate of growth in demand for electricity in this country not having been as fast as we expected, re-phasing the electricity investment programme having been necessary, and therefore the order not having been placed as soon as had been expected. But this certainly will have no effect on the evaluation by the Belgians of the possibilities of their using a British system.

The hon. Gentleman is quite right on the question of the size of the reactor appropriate to the export market. We do not have all our eggs in one basket in this respect. The Atomic Energy Authority has been active, as I know following my visit to Yugoslavia, where it has been exploring the possibilities, although they are not immediate, in promoting the advantages of S.G.H.W. as a possible system for different countries.

On the question of picking the system which is most suited to the needs of the third country, I am sure that we have a great deal to do to help such countries. It is a matter of fitting in the appropriate type of generating system, be it reactor or coal-fired power station, to the load distribution, the existing inventory of generating capacity in that country. The mere fact that we operate the biggest network in the world and apply some of the most sophisticated techniques to this investment planning means that we are able to give advice to countries considering investment in nuclear power on what is available to them long before they get to the stage of inviting tenders for any particular reactor system.

The hon. Gentleman referred to the importance of rewarding and stimulating scientists and engineers in this vital field and giving them a continuing load of work, the continuing stimulus of seeing their work put into application. I think that they have had this. He mentioned the fact that we have not been able to achieve the benefits of replication because of the steady technical advance which has made the advantages of a more efficient design for the next station more than outweigh the advantages of replicating the previous one. This process has only come from the great work in the consortia, the Atomic Energy Authority and the Central Electricity Generating Board as well. The size of the future programme is a matter which has to be dealt with in the context of the fuel policy review, to which my right hon. Friend the Minister of Power is giving a great deal of attention at present.

On the question of comparison of costs of alternative reactor systems, in which I know the hon. Gentleman has taken great interest—in, I suspect, trying to establish entirely objectively that A.G.R. in the right context is easily the best reactor system available—there are real technical difficulties in establishing simply the table which will show the generating costs under different circumstances.

I think we have gone a very long way—further than anyone else—in producing an objective comparison in the Dungeness assessment. It would be very much to the advantage of third countries if assessments as thorough as this were published with some of the American proposals which are claiming fantastically—in fact, absurdly—low costs by any standards of operating criteria which would be required in third countries.

The number of factors involved relate not simply to the interest rate, the load factor and the depreciation period but also to the engineering costs in different countries—which are different for civil, mechanical and electrical engineering—to the amount of equipment which is supplied in the third country rather than exported from the supplying country and also to the existing stock of generating capacity, because the way that is used is changed when a more efficient station comes in underneath it, taking the base load. For all these reasons, the evaluation of any particular proposals has to be a matter of hard salesmanship and detailed study in the export market. This has been organised through B.N.X. and the activities of the Atomic Energy Authority overseas. One of the most important considerations in the review of the structure of the nuclear engineering industry is to make sure that we are able to compete effectively in overseas markets in the preparation of the ground as well as going up to the point of tendering and the actual construction operations.

It is true to say that the British nuclear industry has a very high reputation overseas. Wherever Atomic Energy Authority, B.N.X. or consortia representatives go, they command a great deal of respect, because we have more experience of the operation of nuclear stations than anyone else in the world.

My hon. Friend the Member for Stockport, North (Mr. Gregory) takes pride in coming from a constituency which produces nuclear power stations. I share his pride, because we on Tees-side are equally concerned with the industry. We are generally aware that one cannot separate nuclear engineering, when it comes to fabrication and design, from general plant engineering. It is very much a matter of concern that plant engineering costs in this country generally—not specifically with reference to nuclear stations—have been uncomfortably high not only in comparison with America but with some of the costs which we are having to face in deliveries from Italy and Japan. There is a need for rationalisation, and for better organisation in the heavy plant construction industry generally. That is a matter at which my right hon. Friend the Minister of Technology is looking, with the help of the Industrial Reorganisation Corporation.

On the actual organisation of the nuclear consortia, the number of design teams, and so on, as the House knows, my right hon. Friend and the Minister of Power have had talks with the chairmen of the consortia. Those talks are continuing, but at the request of the consortia, no statements are being made until the talks have progressed somewhat further. I am grateful to hon. Members for the points which they have made about considerations which should be borne in mind, and I will pass those on to my right hon. Friend.

My hon. Friend the Member for Glasgow, Kelvingrove (Dr. Miller) asked about the importance of medical research. The nuclear industry is concerned mainly with safety and health as a result of nuclear operations. The use of radio isotopes for treatment and the application of nuclear physics in medicine probably is outside the scope of this debate. As there are many other subjects awaiting debate, I hope that my hon. Friend will forgive me if I do not launch into this sphere of discussion tonight.