If Phil Anschutz built power stations…
- 10 Jul 06, 05:07 PM
The long-awaited Energy Review will be published tomorrow. Nobody I know in the industry claims to have seen it, but there was a selective leak to the Observer Business section which revealed:
- they will build six 1.6mw nuclear power stations
- there will be a hefty bung to the renewables lobby to avoid the charge that renewables will lose out as money is spent on nukes.
The aim, as desired by the generation industry, is to make nuclear “economic” not by subsidising but by raising the price of carbon permits so that it looks cheaper than gas. However there are problems...
...what many in the power industry want is detail, not commitment in principle – they cannot make investment decisions on the basis of a principle. The new carbon pricing arrangements need to be spelled out in detail – but of course they cannot be because they rely on a EU wide carbon emissions trading scheme. Because the UK is committed (see David Miliband last week) to high carbon prices there is a clear signal there, but a) there is no bipartisan commitment and b) the world price of carbon may go down if there is no successor to Kyoto.
Watch tomorrow (Tuesday) for a deft Tory tactic: Alan Duncan (shadow trade and industry secretary) is on record as not being committed to nukes on economic grounds. The cross-party energy committee of MPs said today the review has been done too fast and with too little cross-party involvement. So the Tories can extract maximum political advantage from being seen as open to argument on nukes while Labour’s backbenchers (not even invited to talk about the review over warm white wine and stale parma ham) seethe at the government's newfound certainty.
Oh, and my industry-watching sources say the specificity of the 1.6mw capacity in the Observer leak shows that the chosen model is the Areva (there is a rival Westinghouse design with smaller generating capacity). This is the real meaning of the Blair-Chirac deal last month: Areva is part owned by the French state and, claims my informant, effectively subsidised by it. So even though British taxpayers will not be subsidising new nuclear build, the French taxpayer might be.
A great coup for cross-channel relations: to secure Britain’s energy security, the design and economic performance of our future nuclear generating capacity will be handed to, er, France.
Still the 1.6mw Areva design means there only need to be six new power stations built instead of 10 on the Westinghouse design. After tomorrow, all the government has to do is work out where to site them. As one Docklands resident put it to me: “be thankful that Philip Anschutz does not build nuclear power stations”.