| Series Title | The Economist |
|---|---|
| Series Details | No.8474, 22.4.06 |
| Publication Date | 22/04/2006 |
| ISSN | 0013-0613 |
| Content Type | Journal | Series | Blog, News |
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Critics of Tony Blair's plans for a nuclear revival make their case AFTER 25 years in the political wilderness, nuclear power is back in favour in Britain. A combination of dwindling fossil-fuel stocks in the North Sea, rising greenhouse-gas emissions and a high oil price pushed Tony Blair into launching an energy review last year to re-examine an issue that his government last looked at as recently as 2003. Most observers think the review is designed merely to rubber-stamp a nuclear revival that the prime minister has already decided on in private. Support is far from universal. In the past month, two influential bodies have produced reports arguing against a renewal of nuclear power. Last month it was the Sustainable Development Commission, an independent outfit created to advise the government on greenery. Over the Easter weekend, the Environmental Audit Committee (EAC), a parliamentary body, weighed in with its own criticisms. The committee's first worry is the time it takes to build nuclear-power generators. Around a quarter of Britain's generating capacity is due to disappear over the next ten years, as elderly nuclear plants are decommissioned and new environmental rules make coal stations more expensive to run. The MPs argue that, given the long lead time on new nuclear plants, they could not begin to make a contribution until 2019. That would be too late to bridge the likely generation gap. Their next worry is that support for atom-splitting might, in the meantime, mean less help for other low-carbon technologies like wind and wave power, or carbon capture and storage. That could leave Britain dangerously reliant on imported gas for much of its electricity supply. Such crowding-out is inevitable, say the MPs, because nuclear power would require big subsidies to make it attractive to investors. That is because nuclear power plants--which have high initial capital costs and take a long time to start up and shut down--are risky in Britain's volatile, privatised electricity markets, which favour cheaper, nimbler technology (such as gas generation) better able to meet rapid changes in demand. A long period of cheap power could cripple a nuclear operator, as British Energy (which owns Britain's newer nuclear plants) found when the government was forced to bail it out in 2003. The EAC cites a study by Oxera, an economics consultancy, which estimated that at least pounds 1.6 billion ($2.9 billion) of public money might be needed to ensure 8GW of new investment and replace the losses from decommissioning old reactors. The costs of nuclear power extend far beyond a reactor's operating life, too. The Nuclear Decommissioning Authority, set up last year to dismantle Britain's nuclear power stations, now reckons that the total cost to the taxpayer of running down, decommissioning and cleaning up Britain's civil nuclear sites will be around pounds 70 billion over the next century--up from its initial guess of pounds 56 billion. But not everyone agrees that atomic energy requires public money. Ministers say they remain committed to liberalised markets and insist that new reactors will have to be privately financed. William Vereker of Lehman Brothers, an investment bank, argues that financial markets will take the risk of building, running and decommissioning new nuclear plants so long as the state provides non-monetary support in a few areas--such as expediting planning applications (the planning process for Sizewell B, Britain's last nuclear plant, lasted six years) and deciding what to do with nuclear waste. A few companies--notably E.ON, a German electricity generator--have expressed tentative interest in building reactors in Britain. Atom aficionados point out that the market is currently rigged in favour of renewable energy sources, since the Renewables Obligation, the government's main subsidy for carbon-free power, does not apply to nuclear energy. Changing that, they argue, would improve the finances of the nuclear option. Mr Blair might also take heart from polling evidence that suggests the public is warming to a nuclear revival. A MORI poll for the Nuclear Industry Association published in December 2005 found 41% in favour of building more reactors to replace existing ones, up from 35% a year before. |
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| Countries / Regions | United Kingdom |
