Is the UK's nuclear future in jeopardy?

 
Steam billowing from nuclear power plant reactor Will steam still be billowing from UK nuclear plants in years to come?

The energy minister Charles Hendry admits that the withdrawal of the German energy giants E.ON and RWE from a big nuclear power project in Anglesey is "clearly very disappointing".

He points out however that "the UK's new nuclear programme is far more than one consortia" and that "plans from EDF/Centrica and Nugen are on track".

EDF of France and Centrica are the big players in the development of new nuclear plants, which right now is the government's only serious initiative for filling a substantial looming gap in our generating capacity as old plants die - and which is also supposed to reduce our dependence on imports of energy and on CO2 emitting fossil fuels.

So whether you are a fan of nuclear or not, it is at the heart of energy policy.

And here is the worry.

The exit of E.ON and RWE may have more to do with post-Fukushima increased German wariness of nuclear power than with concerns about the commercial viability of UK nuclear.

But I'm not sure that Mr Hendry is right to be confident that Centrica and EDF are as committed as all that to the many many billions of pounds of investment that he expects from them.

I've spoken to sources at the companies, and they say there is a make-or-break decision to be made towards the end of the year by ministers - which is whether they are prepared to abandon their previous position that there won't be any substantial subsidies for nuclear, either from taxpayers or customers.

The cost of the newfangled plant being developed for the UK is rising, partly because of increased safety precautions deemed necessary after the Japanese debacle, and partly because the de facto prototype plant in Flamanville in France, developed by EDF, is taking longer to build and is much more expensive than had been thought.

The price of electricity that would be generated from new nuclear plants in the UK is looking more and more expensive. Which means that it won't be commercial for Centrica and EDF to provide it, without the kind of market-rigging that has financed the proliferation of wind turbines.

Will the government foist such costs on customers or taxpayers to obtain the greater energy security that nuclear will allegedly provide? I have to say that I don't detect much confidence from the power companies that ministers are anywhere near having made that substantial ideological leap.

 
Robert Peston, economics editor Article written by Robert Peston Robert Peston Economics editor

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  • rate this
    -21

    Comment number 1.

    With energy prices going up and up, there is no need for subsidies. Thankfully the global warming scare is dying away, so maybe there is room for some coal fired power stations, and a few British jobs digging that coal.

  • rate this
    +21

    Comment number 2.

    The Fukushima reactor used ancient technology using active systems to shutdown the reactor (i.e. shutdown requires working systems) rather than the today's designs where reactors require active systems to be on and will shutdown (purelly by gravity) if something fails

    There's even designs that can't have a meltdown (peeble-bed reactors)

    The problem is public perception risk, not technology

  • rate this
    +26

    Comment number 3.

    HM Treasury should issues nuclear bonds to fund the construction and decommissioning. The stations should be state owned and run and remain so.

  • rate this
    +13

    Comment number 4.

    And before the wind power renewables lot start posting about the advantages of wind power vs nuclear

    Just remember that wind power in the UK has just as much subsidies thrown at it as does nuclear
    And if you check the winds over the UK for the past 2 weeks, its very difficult to extract power from nothing, whereas the nuclear stations keep churning out power whatever the weather

  • rate this
    +2

    Comment number 5.

    We are doomed I tell you! Lets restart nuclear energy as a govt. defense/security project and get on with it. Nothing really serious has happened in the last 60 years so why should anything happen in the next 60? Otherwise everything stops when the wind stops! See how you like living at the beck and call of the weather.

 

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