High Costs Make Thatcher Abandon Nuclear Program

THE British government is ending its 34-year-old nuclear power program because nuclear energy has failed to become competitive with alternative sources. It is also canceling plans to sell existing nuclear plants to the private sector because of uneasiness there over future financial liabilities associated with the plants. The announcement to the House of Commons by Energy Secretary John Wakeham Nov. 9 has thrown into confusion plans to privatize the entire electricity industry. The chairman of the Central Electricity Generating Board (CEGB), Lord Marshall, a nuclear scientist, has resigned.

Mrs. Thatcher, a staunch defender of nuclear energy, has had to admit that it cannot compete with coal- and oil-fired power stations.

According to a CEGB source, a key statistic in the decision was the projected price of electricity from the PWRs - three times the cost of power from modern fossil-fuel stations.

Seven elderly Magnox nuclear power stations, five advanced gas-cooled reactors, and one pressurized-water reactor (PWR) under construction will now stay in the public sector. Plans to build three more PWRs are being scrapped.

Meanwhile, the government is being pressed by political opponents and energy experts to rethink its electricity privatization plan. The plan depends on the support of the City of London, as the financial district is known.

Professor Ian Fells, a respected energy expert at Newcastle University, said it had been obvious for months that City interests were unfriendly to the inclusion of nuclear power stations in the privatization plan.

City interests told Mr. Wakeham that they would support the plan only if the Department of Energy paid for the construction, decommissioning, and waste-processing costs associated with nuclear power stations.

Wakeham called this a demand for ``unprecedented guarantees'' which he was not willing to give. ``Back end'' decommissioning costs for nuclear plants promise to be enormous.

ESTIMATES for decommissioning the nuclear fuel reprocessing plant at Sellafield have risen in the past two years from 400 million ($632 million) to 4.6 billion ($7.3 billion), according to Gordon Mackerron of Sussex University. It is estimated that decommissioning the existing Magnox stations will cost a total of 6.6 billion ($10.4 billion).

Under the privatization plan for the overall electric industry, the CEGB was to be divided into two competing corporations. Lord Marshall was to have moved from the chairmanship of the CEGB to a similar post with the larger of the two.

The government intends to stick to the plan, but by taking all nuclear power stations out of the power sell-off it is being forced to create a third body to operate them separately.

The publicly owned nuclear company will be headed by John Collier, chairman of the United Kingdom Atomic Energy Authority.

Professor Fells believes the government should take a new look at the idea of having only two competing companies to operate the electricity industry. Three or four smaller companies would offer more genuine competition, to the benefit of consumers, he believes.

The setback for Mrs. Thatcher's electricity privatization comes as the government is making heavy weather of privatizing the nation's water utilities. Three out of four Britons oppose the water selloff.