Letters assumes that the terms of such contracts, once fixed, are fixed for the duration of the contracts. The fact is that for an increasing number of long- term contracts the price is renegotiated every year. Since the price is the most important element in any contract the long-term nature of such contracts ceases to have any meaning. If, for example, the price cannot be agreed in one of the renegotiations would the producers be under any obligation to deliver? If not, where is the 'security' that is implied in the long-term nature of the contract?

Utilities 'captive' mines On the influence of 'captive' mines on the price; most utilities involvements are as minority shareholders (indeed foreign companies are not allowed to take up majority shareholdings in Canada or Australia, as pointed out in a separate section of the article) and though it may allow these participants a

degree of assurance in supply it does not allow them to dictate the price. A survey has indeed shown that utilities pay only $1-2/1b less from 'captive' mines.

Price/cost relationships On the price/cost relationship the article implies that in the long term the price will be closely related to costs. As is so often the case the lessons of the oil shocks have not been learned. Put in a more numerate form these lessons are: though an individual private producer may be satisfied with a 20% rate of return, governments are not; if a commodity is perceived to be a national asset and a finite one at that, the government would want the 'profits' from such a resource to contribute to national development. In the case of Canada, as an example, there are an estimated (RAR and EAR) 838 000 tonnes of U~Os, and in 1977 about 6 800 tonnes U~O8 were produced, of

which about 6 000 tonnes were exported (more were exported from stocks). If the 'profits' were required to contribute to 1% of the country's development budget taken nominally as 20% of GNP, then $400 million would be required or a 'profit ' to the country of $30/1b U308 representing a rate of return of 200% on $15/1b costs. This may explain the floor price of $42/1b imposed by the Atomic Energy Commission of Canada. Such are 'political ' rents (or as the Australians call it a 'resource rent tax') made of, and clearly for a sensitive energy resource such as uranium it must be taken into account.

W.P.S. Tan Nuclear Power Company Ltd

Risley, Cheshire, UK

'C.M. Buckley, G.S. Mackerron and A.J. Surrey, 'The international uranium market', Energy Policy, Vol 8, No 2, June 1980, pp 84-104.

The significance of the domestic sector in low energy strategies for the UK

Most readers of Energy Policy will be familiar with the l IED team's low energy strategy for the UK. ~.2 This study claims that the UK could enjoy considerably higher future levels of G D P without increase in energy use given limited government intervention and the adoption of energy saving measures as they become cost effective.

Very considerable savings in energy use in the domestic sector seem to be required, however, if the overall low energy target is to be reached. Take, for instance, Table 1 reproduced from A Low Energy Strategyforthe UK. The projected reduction in the domestic sector is around 40% of the 1976 actual level and accounts for about 33% of the overall difference between the l IED and UK Department of Energy figures. The projected absolute reduction in energy use in the domestic sector permits increases in use in other sectors without increasing total energy use. Whether it will, in practice, be possible

to achieve such savings is of crucial importance to the feasibility of the strategy.

Most of the energy used in the domestic sector is for space heating and hot water. Therefore the most important assumptions are that there is a considerable tightening up in thermal performance of new dwellings and that, in the existing housing stock (which must comprise at least 70% of the total stock for year 2000), insulation measures are introduced once they become cost-effective.

The l IED team make the following

assumptions about heat loss in dwellings constructed post- 1975. These figures give the fabric heat losses for dwellings constructed in each year as a proport ion compared to those constructed under the 1975 building regulations:

Building regulation standard

1975 1980 1985 1990 and after

1.0 0.7 0.6 0.5

In February 1980 the UK Department of the Environment proposed that new building regulations should be 0.4 W/ m2°K for roofs and 0.6 W/m2°K for walls. These improved standards would appear to reduce heat loss from new dwellings to 0.7-0.8 of the 1975 levels.

Table 1. Comparison of de~ivered energy consumption projections for 2000 (billion therms).

UK Department of Energy lIED study lIED study

Sector Actual 1976 (high case) (high ca~) (-1976 actual)

Iron and steel 5.3 9.9 7.0 +1.7 Other industries 16.5 25.4 21.5 +5.0 Domestic 14.5 15.8 9.0 5.5 Commercial and institutional 7.2 9.0 4.5 -2.7 Transport 12.7 17.0 15.2 +2.5

Total 56.2 77.1 57.2 + 1.0

6 2 E N E R G Y P O L I C Y M a r c h 1 9 8 1

Mottershead et aP reckon that U values of 0.40 W/m2°K for walls, 0.25 for roofs and 0.30 for floors were perfectly feasible. This would suggest that scope for achieving the 1990 target of a 50% cut in fabric heat loss would exist.

The l IED study also assumes insula- tion measures are adopted once they become cost-effective. Individuals, however, may not act strictly according to economic 'rationality' . Lack of information, shortage of ready cash, the somewhat intangible nature of the investment are all factors which might deter them. Doyle and Pearce 4 suggest that individuals require payback periods of only two to three years for investment in insulation, while Danskin 5 produces convincing evidence that in the absence of addit ional financial incentives the rate of adoption of insulation measures will be slow.

The Homes Insulation Act (1978) was introduced to circumvent the above difficulties. Grants were made available towards basic insulation

measures in the private sector, while a ten year programme for bringing local authority housing up to a basic s tandard of thermal efficiency was to be undertaken. Early in 1980, however, the UK government halved the money available to the private sector while the local authority finance has been assimilated into the block housing grant.

According to EUROSOL-UK 6 these measures have reduced the market for insulation materials by 25%. They claim that a survey of 264 local authority councils showed that 90 had either abandoned or decided not to start their insulation schemes. The other 174 councils were only spending one third as much as in 1979.

The loss of market has had a serious effect on the insulation material manufacturing industry who recently had invested heavily (£80 million) in the light of the government's schemes. There are fears that there may be a permanent reduction in capacity of the industry.

Letters/Book reviews

Unless these changes in government policy are quickly reversed there must now be some doubt as to whether the reduction required in the domestic sector by the low energy strategy can be attained.

Robert Ball University of Stirling

Stirling, Scotland

'G.Leach, C.Lewis, F. Romig, A. van Buren and G. Foley, A Low Energy Strategy for the United Kingdom, International Institute for Environment and Development and Science Reviews Ltd, London, 1979. zC. Lewis, 'A low energy option for the UK', Energy Policy, Vol 7, No 2, June 1979, pp 131-148. 3F.R. Mottershead, G. Jolley, R. Nicoll and D. North, Thermal Insulation of New Housing: A Case for Higher Standards, EUROSOL, UK, 1980. 'G. Doyle and D. Pearce, 'Low energy strategies for the UK- economics and incentives', Energy Policy, Vol 7, No 4, December 1979, pp 346-351. 5H. Danskin, 'SARU's energy-demand model', Futures, Vol 11, No 6, December 1979, 1313 491- 509. "The trade organization representing insulation material manufacturers.

Book reviews Solar Sweden - underestimating the uncertainties

S O L A R V E R S U S NUCLEAR: C h o o s i n g E n e r g y Futures

by M 8 n s L rnn ro th , T h o m a s B. J o h a n s s o n and Pe te r S teen

186 pp, £15.00, $30.00, Pergamon Press, Oxford and New York, 1980

All wings of the energy debate - from Barry Commoner and Amory Lovins to the most ardent supporters of nuclear e n e r g y - take it for granted that the ultimate question is: can the sun replace uranium? (This ignores the possibility of fusion's ever becoming a practical success, a pessimism I believe is justified the better we grasp the

technological obstacles facing fusion). Answers to this question have almost without exception been based on biases rather than on serious analysis: those who, for political or philosophic reasons, like the sun, insist that it can, and indeed will, replace uranium; those who see no political threat in the pre- dominantly electric nuclear society regard that thermonuclear reactor 93 000 000 miles away as a friendly adjunct that can never replace all fission reactors here on earth. The authors have taken a step toward correcting this deficiency by analysing the solar path and the nuclear path in a specific case: Sweden as visualized in 2015. They have summarized their book in a short article in Science. ] My

review is based on both the original book and on the Science article.

Summary of the argument The essence of their argument is contained in two propositions and one conclusion:

• Proposition 1. The economic, social, and environmental costs of both nuclear Sweden and solar Sweden overlap; in any event, they are so uncertain that we cannot responsibly distinguish between the two on grounds of costs.

• Proposition 2. The present Swedish path (the book was written before the referendum that limited nuclear Sweden to 12 reactors by 2000) is heavily biased toward nuclear energy. The path toward nuclear Sweden and the path toward solar Sweden tend to pre-empt each other, at least in the short run, both because of intrinsic incompatibilities between them, and because, in the authors ' view, the State Power Board sets its rates and otherwise

E N E R G Y POLICY March 1981 63