Who will fund future UK nuclear power?

Nuclear power looks likely to continue to have a role to play in the long-term provision of Britain’s energy, but the scale of future government support remains open to speculation, until the findings of an energy review by the Cabinet Office are published.

This week’s press speculation questioning the future viability of nuclear power in the UK, on the basis that leaked drafts of the report suggested removal of government support for nuclear power, were dismissed by Energy Minister Brian Wilson. Speaking on BBC Radio 4’s Today Programme, he pointed out that the energy review was completed and submitted to the prime minister, Tony Blair before Christmas, and no revisions had been made. He then went on to emphasise the significance of nuclear power’s current 25% contribution to national energy production, and its role in meeting climate change commitments.

Brian Wilson is the chair of the energy review which was commissioned by the government to assess the future provision of energy in the UK over the next 50 years. He is regarded by the anti-nuclear lobby as a pro-nuclear MP due to the presence of the Hunterston nuclear power complex at West Kilbride in his Scottish constituency. Hunterston is a major employer locally and faces an uncertain future until a decision is made over whether a new phase will be commissioned, and how it will be financed. The City has already made it clear that the prospect of costly decommissioning and waste management treatment requirements for nuclear installations in the future will put off many private investors.

The publication of the review is also eagerly awaited by the coal industry, which is hoping to see coal recognised as a strategic resource, and in turn secure increased government support for clean coal technology development. Britain has an estimated 222 million tonnes of coal reserves, according to evidence submitted to the energy review by the Coal Authority. At the current established annual production rate of 30 million tonnes, the industry argues that it is a secure long-term energy resource.

The UK coal industry is also calling for a clean coal obligation, requiring electricity suppliers to purchase specific volumes of electricity generated from coal as a major incentive to persuade generators to invest in clean coal technologies. The European Parliament has already signalled the need to keep coal as an option in Europe’s mix of energy resources. In its response to the EU’s green paper, Towards a European strategy for security of energy supply, the Parliament stated that building new clean coal power plants would be one of the essential elements to secure Europe’s energy supply.

A Cabinet Office spokeswoman told edie that there is still no indication of when the energy review will be released.

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