No new nuclear plants likely before 2020

Monday, September 3, 2007

Reuters Mon 20 Aug 2007

A cyclist travels away from Sizewell A and B power stations in Suffolk, Britain May 22, 2007.

No new nuclear plants likely before 2020

By Daniel Fineren

LONDON (Reuters) - No nuclear power plants are likely to be built in Britain before 2020, if they are built at all, which will be too late to fill the country's looming power generation gap, according to a report published on Monday.

The government wants the private sector to build new nuclear power plants to replace the country's ageing reactors and plug a generation shortfall left by the closure of coal-fired power plants under European environment laws.

But the report by Poyry Energy Consulting says the commercial case for building new nuclear plants is shaky and that none will be built without a higher long-term carbon price than that set by the current European Union Emissions Trading Scheme (ETS).

"Despite the rhetoric, it is difficult to see much new nuclear capacity coming into the market before 2020," Poyry director Andrew Nind said.

"Beyond then prospects look better, but the future of nuclear probably depends on the creation of a long-term carbon price guarantee. In its current form, the ETS will not suffice."

The ETS is supposed to encourage investment in cleaner power technologies by making generators pay for rights to emit carbon dioxide from burning fuels like coal, oil and gas.

Because many member states have given away too many rights for free, the cost of spewing the main gas responsible for climate change in to the air has mostly been below 20 euros a tonne over the last year. This is too low to make low-carbon but costly nuclear power worthwhile, the report concludes.

Partly because of high capital investment costs and rising prices for uranium, companies will not spend the huge sums required on nuclear power without a long-term reliable carbon price above 20 euros a tonne, the report says.

The current ETS runs only until 2012 and investors still have no idea what the EU plans to do about the carbon market beyond then.

Environmental regulations could force many of Britain's coal fired power plants to close over the next decade, while all but one of its nuclear power plants are expected to shut by 2020, leaving a gaping hole that new nuclear cannot fill in time.

The government wants atomic energy to play a part in Britain's future energy mix but has refused to pay for it or build the plants with public money.

A spokeswoman for the department responsible for energy said on Monday the government was already trying to work out how the country will cope if no nuclear power plants are built.

The government admitted last week that the current target of getting 20 percent of its power from renewable sources of energy by 2020 is already very challenging, so it may have to become still more dependent on imported gas, while slashing demand.

(c) Reuters 2007.

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