Nuclear cuckoo in the renewable nest?
September 2006
The Energy Review has given the go-ahead to new nuclear build - or has it? What the Energy Review has done is to signal that the Government thinks, on balance, nuclear has a part to play in the energy mix over the next forty years. The basic case put forward in the review is that, all things considered, investment in renewables and energy efficiency, important though they will be will not be enough to make up shortfalls in long term supply arising from the closure and retirement of power stations (mainly existing nuclear and coal) over the next twenty years: nuclear has to be 'in the mix'.
Even if you agree with that judgement, the question that remains unanswered is how does new nuclear actually get built, and if it does, who foots the bill? And then, depending on who signs the cheques, what does that leave for other forms of investment? Might a new nuclear programme mean that aspirations on renewable energy and energy efficiency acknowledged to be equally important thereby fall by the wayside?
It is clear that there will be no large Government cheque up front for new nuclear build. The Review is explicit that 'it is for the private sector to initiate, fund, construct and operate new nuclear plants and cover the full cost of decommissioning'. There has, however, been nothing to stop the nuclear industry from doing just that for the last twenty years, and not a single new plant has been built in the UK. The difference might be made, it is suggested, by simplifying the planning and licensing procedures to enable a shorter time between conception and operation to be achieved, but many voices suggest that investment would be unlikely to materialise unless some further guarantees were achieved about the price of electricity sold during the life of the plant. That would seem to be difficult to achieve: the preferred mechanism of benefiting low carbon energy through a price for carbon depends on the successful operation of the next phase of the European Carbon Trading System (EUETS): but by definition, carbon trading cannot fix a price - trading means that the price will fluctuate . The only other way to guarantee a price for nuclear electricity would be simply to fix the energy market - and give nuclear energy a special price within it.
A fixed energy market would, in itself depress investment in other forms of energy: and it would get worse, since an agreed primary part of future energy policy has to be energy efficiency - that is, ensuring that energy producers sell less energy to customers. Other forms of energy can cope with such a development: variability perhaps becomes a virtue. But nuclear cannot switch off or even seriously vary its output: it simply has to produce and sell. Any seriously successful programme of energy efficiency in the context of building a fleet of new nuclear with guaranteed output price would disadvantage renewable investment further: the nuclear cuckoo would crowd other forms of energy out of the nest.
The commitment in the energy review to herald a huge investment programme in renewables and distributed generation is a vital and welcome commitment: but it seems incompatible with the devices that will almost certainly be necessary to entice investment in nuclear. We could indeed, unless the conundrum is solved, end up with little or no investment in renewables over the next few years, and inadequate investment in the nuclear plant that is supposed to make up the long term gap. Under these circumstances, the fall-back safe investment, guaranteed to keep the lights on, albeit at a carbon cost would of course be - gas: the very fuel that our supposed likely dependence on if nothing is done justified the energy review in the first place.