London, 10 April: Insurer Aon Corporation has warned that the UK's plan for a nuclear power renaissance must take into account risks of interruptions to the supply of uranium fuel.
The UK government is easing planning restrictions, in a bid to encourage private companies to build a new generation of nuclear power plants to help replace the existing, aging fleet of reactors. At a speech on 26 March, UK Business Secretary John Hutton called this new push for nuclear "the most significant opportunity for our energy economy since the exploitation of North Sea oil and gas".
But Hamish Roberts, London-based managing director of Aon's natural resources team, warned that the UK must face up to risks associated with the supply of uranium, which is mostly imported over great distances from Australia, as well as from Africa.
"Hutton's plans for nuclear expansion are achievable but only if the government thinks beyond just the risks of safety to the threat of fuel security. Coupled with battles over water shortages, fuel supply will be the biggest challenge of our generation," he said.
Although Australia and the UK currently maintain good relations, Roberts said: "Who knows in 50 years' time how a friendly country becomes a foe." In addition, there is a risk that terrorists could target ships transporting uranium to the UK.
Roberts stressed that although concerns about the supply of natural gas is one of the reasons behind the UK's push for nuclear power, the energy source would "still have fuel security issues, they just might be different".
Other risks must be addressed by the UK government, companies hoping to build new reactors and insurers, he said: "In terms of building new sites, these will be the most complex projects seen for years, bearing in mind the last UK nuclear plant was built in 1982. Nuclear construction poses the same complex risks as building any other power plant - that is until the fuel is introduced.
"In addition, the government must address the existing problems of nuclear waste disposal. Since the first UK nuclear plant in 1953, it is estimated that the industry has only produced the equivalent of three double-decker buses' worth of highly radioactive waste . There
is no perfect solution to long-term storage so engineers must work towards a revised strategy as to when the next phase of plants are introduced."
"We can see that insurers need to work harder" to take into account the risks associated with nuclear power, he added.